Prosper Loan

Obtaining a Prosper loan is a simple process if the correct steps are followed. Here are details on how to get your loan funded through the Prosper website.

Step One – Sign Up:
The first step is to sign up at the Prosper website. This includes a identity verification and a credit screening to determine your credit grade. Do this right away as it will provide the details you need to perform the next steps. Also will provide access to the site so you can reference some of the pages listed below.

Step Two – Pick a Group:
Understand what groups can offer you and determine if using a group is something you would like to do. My suggestion is that you use a group (especially for borrows with a B,C or D credit grade), the reason for this is that by using a group you will most likely receive a lower interest rate then if you try and obtain the Prosper loan without a group. But only consider groups with low group fees, reason for this is that I am not aware of any additional benefits provided by the groups requesting higher group fees. Therefore you pay more but gain little or nothing for it. Therefore look for groups with fees structures like this or lower.

Leader Rewards:
AA, A: 0.25%
B, C, D: 0.5%
E, HR: 1%

The group fees section can be found on the group page by clicking on the group name. For example, here is a link to my group page. In the middle of the page is a section called Leader Rewards. As you can see my group provides the low fees you should look for in a group.

There are several things you should expect from a group. If the group does not do this, do not consider them for your Prosper loan.

Group leader should endorse your Prosper loan listing with a bid.

The group leader should bid on your Prosper loan listing heavily over the first 3 days to make sure your loan is 5% funded after the 3rd day of being listed. That way you can verify your bank account.

If you agree (some people do not based on privacy concerns) your group leader should vet your income by having you email or fax a copy of your pay stub or tax returns. For your protection I recommend crossing off personal information such as social security numbers, bank account numbers, etc. with a black marker before sending. Make sure this information is hidden.

Do not use a group that will not bid on your Prosper loan. And by bid, I mean they should be willing to bid more than a few hundred dollars, you should expect a group leader to bid 5-10% of the loan amount within the first 5 days of the loan listing. Ask them to point out examples of loans they have bid on so you can verify the bidding that took place and that they did bid on the loan. After all, you are paying group fees, you should expect your group leader to provide support to get your loan funded. By starting the bidding on the Prosper loan, this is one, very important, way the group helps the borrower in getting the loan funded and obtaining lower interest rates. Your should also expect your group leader to help you with steps three, four and five below.

Step Three – Determine Prosper Loan Amount:
Understand state rate caps and state loan limits. Also review the interest rate table. Your group leader should be able to assist with this and provide recommendations on the amount of money you can borrow and the expected interest rate range your loan will get funded at. State loan limits can limit the amount you can borrow or the maximum interest rate that you can borrow the money at. Find your state and understand what if any limits are present. One your state loan limits are understood, review the interest rate chart. This shows the interest rate range for various loan amounts, and will provide guidance on what range your loan will get funded at. Now that you have a better understanding of how much money you can borrow and what the interest rate will be to borrow it. Use the loan payment calculator to determine what your monthly payments are going to be so that you can include these payments in your budget. Assuming you have been able to include these payments in your budget and feel comfortable that you can repay the loan you are ready to write your loan listing and profile.

Step Four – Write Your Profile:
This step is fairly simple. You will want to include a picture although it does not have to be of you. If can be anything that is meaningful to you, can be your child, dog, house, etc. Next fill in the description section this is your chance to explain a little about yourself so the lenders can get to know you and gain confidence that you are a good investment for their money. Do not go overboard, limit this to about 5-10 sentences.

Step Five – Write Your Loan Listing:
This is the most important part, but do not worry with the little guidance you will have an excellent loan listing in no time at all. Here is a detailed breakdown of how to assemble your loan listing. Separate each section with a blank line. Since Prosper has a time limit for entering data before you will need to log in again and you will want to spend a little time getting this correct, we recommend doing this in a word processor program and then, once you have it the way you want it, move it to Prosper in Step 6. This also allows the group leader to review before posting to the Prosper loan site.

A few sentences with your reason for requesting the loan. Limit this to less than five sentences.

A few sentences with details on how you are able to repay the loan. Avoid general items such as that you are a good person. Although you are good person, that does not imply that you will have the finances to repay your loan. Point out things like job stability if you have been at your job a long time or no late payments if you have a good credit history. If you just received a raise or promotion. Whatever you do, do not state things that contradict other items on your loan listing, for example, do not state you always pay your bills on time if you have current or past delinquencies or late payments.

Your monthly income. Provide one line that states monthly net income. If you have a partner or spouse splitting bills with you, suggest you add a separate line for your partners income right below yours.

Your monthly budget. See our Prosper loan listing budget page for details. Basic approach is to list (name - amount) all your monthly expenses then end the listing with a total. Under that place the net income figure and below that a line with the difference between the two. If your loan is a consolidation loan or some other loan that will make a difference in your budget aside from just adding the payment of the prosper loan then, for the items impacted, off to the right include in parenthesis (the new amount with the Prosper loan) then make sure you add up the right hand column and total it at the bottom. Therefore you end up with two totals, one showing your budget without the Prosper loan and one showing your budget with the Prosper loan.

Optional step is to conclude with a few from the heart sentences. Such as thanking the lenders and letting them know you appreciate them considering your loan. This is your chance to show the lenders that you are a real person and will repay the loan. Like other sections in the listing, keep this short and to the point.

That is it, you now have a loan listing! You should have your group leader review it and make any updates if necessary. Here are some example listing templates, your group leader should be able to provide additional templates specifically for the reason of your loan. Loan consolidation

Step Six – Publish Your Prosper Loan Listing:
Almost there, you are now ready to publish your loan listing. When publishing your loan listing, make sure you state income that you will be able verify. I recommend 10 day loan listings. Although there are other options such as auto fund and shorter loan listing durations, my experience shows that 10 day loan listings will provide lower interest rates.

When selecting the interest rate to post your listing at, start with the highest interest rate allowed by your state. I know this seems like just the opposite of what you want to do since you are trying to obtain the lowest interested rate, but this allows the Prosper loan process to work for you. By starting with a higher interest rate you attract more lenders to your loan and the lenders will bid the loan down to the market rate. Think of this similar to eBay where buyers often end up paying more for an item then if they bought it elsewhere. The bidding process sets the market rate, let this work for you.

Including pictures is important. Listings without pictures are often overlooked on a page that contains dozens if not hundreds of other listings. If you want the best interest rate, make sure pictures are included. If you include pictures of dogs, children or anything else that may have an impact on your budget for care, make sure these are shown in your budget or you explain why they are not required. For example if you have children but you do not have child care expenses, in your loan listing, explain that your mother lives with you and watches the children.

Step Seven – Verify Your Bank Account and Approve Endorsement From Group:
Both simple steps, but often overlooked and this is important. When searching for loans, some potential lenders will filter the search on loans with verified bank accounts. You will lose out on potential lenders if your bank account is not verified. Therefore verify your bank account as soon as you can. Usually this happens once your loan listing is at 5%. Therefore make sure your group leader bids enough to get your loan to 5% funded within the first 3 days of the listing.

Your group leader should provide an endorsement for your loan, you will need to review it and approve it before it will be visible to others on the loan listing. Lenders like to see that the group leader is confident in your ability to repay the loan and endorses it by the write up and bidding. Therefore approve the endorsement as soon as you can.

Step Eight – Answer Borrower Questions:
Once the loan listing is posted, potential lenders have the option to ask questions about your loan. Make sure you answer these questions promptly and truthfully. The lenders are looking to gain confidence in your ability to pay them back so provide details that will help them to become confident and they will bid on your loan.

Step Nine – Listing Review:
Almost there, your loan is now funded, however you have a few more things to complete to finalize the process. Once the loan bidding period ends, Prosper will review your loan and may contact you for information to verify your income, etc. Make sure you reply promptly to the Prosper requests, if Prosper does not receive the required information in a timely manner they will cancel your loan listing and you will need to relist your loan. Here are the details about the loan review process.

Step Ten – Make Your Payments:
Congratulations you have now obtained your Prosper loan. Remember that many people have bid their hard earned money on your loan and are counting on you to pay it back. Make your payments on time and once you pay off your debt come back to Prosper as a lender and support other people while making some money for yourself. See our Prosper Lending page for advice on the lending side of Prosper.

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