Author Topic: LOL Prosper / My FICO's are over 800 and even Wells Fargo offered a better rate.  (Read 3039 times)

TheLittleDuke

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Background:  I am a lender on Prosper.  I have nearly zero debt, my house is almost paid off, and I pay off my credit cards in full every month.  My FICO scores are over 800 (including an 850 from Equifax of all places).  I also have a Wells Fargo personal line of credit (PLOC) up to 35K at 7% interest.

Out of curiosity over the weekend, I decided to see what Prosper would offer me for a rate on a small 10K loan....which is less than the maximum I ever had invested with them...

I was STUNNED when Prosper offered me 9.78% as their best rate :P

WTF!?!

How are they offering larger loans to others in the 4-6% range?  It just doesn't pass the sniff test!

I was so incredibly insulted by it (combined with the fact that they are now spamming me to complete the loan) -- that I've decided to idle down any further investment in their platform. 

I also asked them to remove the "score check" which now shows up as an unfinished loan in the user interface but they are refusing to.

I was willing to stick with them given the lack of liquidity since they are ending their Folio note trading relationship, but FFS, this is the last straw.
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Fred

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Perhaps there is a credit-arbitrage opportunity here for you?

Take the 7% 35K from Wells Fargo, and lend it at 9.78% to people like you (FICO > 800) on Prosper?
 

AnilG

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Have you tried to get $10K installment credit, for example signature loan, from Wells Fargo? Prosper is offering installment loan while PLOC is a revolver, not an equitable comparison. Also, small loan amount tend to carry higher interest rate.

I also have a Wells Fargo personal line of credit (PLOC) up to 35K at 7% interest.

I was STUNNED when Prosper offered me 9.78% as their best rate :P

WTF!?!

How are they offering larger loans to others in the 4-6% range?  It just doesn't pass the sniff test!

I was so incredibly insulted by it (combined with the fact that they are now spamming me to complete the loan) -- that I've decided to idle down any further investment in their platform.
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TheLittleDuke

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Perhaps there is a credit-arbitrage opportunity here for you?

Take the 7% 35K from Wells Fargo, and lend it at 9.78% to people like you (FICO > 800) on Prosper?

That was originally my idea but intra Prosper -- hence the passing review to see what they were offering for rates.

Though based on the number of available loans (compared to LC) they might be circling the drain...
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fliphusker

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It is odd what companies offer for their rates.  Just remember that FICO is not the only thing that a lender will look at.  From our notes we all know that while FICO is important it is not the only important thing. 
As Fred points out of taking the 7% 35k and invest it, if you are going to go all crazy with something like that I would do a HELOC at half that rate.  Something I personally think is crazy I am just too conservative to do that.