If you're a young professional carrying around some consumer debt, you're certainly not alone. Learn how Prosper is helping consumers like you get ahead financially, one loan at a time.
Ten years ago, at the age of 26, I was in debt to the tune of $80,000.
My mid-20s should've been carefree years. Instead, they were anxious ones. When I wasn't lying awake at night worrying about money, I was working two, often three, jobs to chip away at my debt.
Although I used several resources to knock out all $80,000 of my debt before turning 30, one product -- Prospect Loans -- stands out to this day. (Note: I was an actual Prosper customer and the following is based on my experience. Today, Prosper is an affiliate of Greatvest Tools, meaning we may receive a commission if you use our link to get a loan. If you choose to support us in this way, thanks!)
Can a lender really be one of the good guys?
I know what you're thinking -- borrowing money was my problem. Trying to solve it by borrowing more money is like robbing Peter to pay Paul.
In my case, it worked out very differently.
Six months before I learned that a Prosper debt consolidation was an option for me, I had seriously committed to paying off my debt at any cost. I busted my butt at work and asked for a raise. I started working nights and weekends at Starbucks. And, I moved from a comfortable apartment to a tiny rented bedroom.
And yet, the interest rates on my credit card debt were making it very hard to get ahead. Now, while it's better not to carry debt at all, there's a big difference between having a loan at between 0 and 15 percent and having a credit card at over 20 percent. The higher the interest rate, the more of your payment goes toward interest, and the more you have to pay each month if you want to start paying down principal quickly.
With my cards between 18 and 20 percent APR, I wasn't making progress as quickly as I'd like. I was also struggling with consistency. When I might pay an extra $500 or $800 toward my debt on month, the next month some unexpected expenses would have me paying nothing extra or, worse, using a credit card again. This was before I learned the vital importance of having a Bank Account Buffer to ensure you can maintain momentum on debt or saving goals.
Enter Prosper debt consolidation loans
At the time Prosper Loans was very new. Here was this company that few people had heard of offering to make personal loans at reasonable rates with no bank involved. Unlike a bank, Prosper debt consolidation loans were comprised of money collected from a pool of individual investors. As a result, Prosper can take a more holistic approach to deciding whom to lend to and, in many cases, issue loans that banks cannot.
Which is exactly what I needed. Although I still had a decent credit score, a bank would've have approved for new credit. I simply had too much debt and not enough income.
With Prosper, however, I was able to get a debt consolidation loan at a lower APR than my credit cards. I used it to pay off the highest interest cards and made regular payments on the three-year loan.
I cannot overstate the psychological value of making payments toward a fixed loan as opposed to a credit card. By closing the credit card accounts I had paid off with the consolidation loan from Prosper, I couldn't backpedal into debt. Every month I sent my payment off to Prosper and my balance went down. Ultimately, I paid off the loan a few months early with no pre-payment penalty.
Although my Prosper loan consolidated just a portion of my debt, it's responsible for launching my payoff strategy. Shortly after I made my last Prosper payment in 2009, I had paid off every penny of my debt.
A lot has happened in the 11 years since I took out that Prosper loan. Prosper has grown and makes more loans than ever. I haven't needed to borrow money again, but I credit my Prosper Loan with helping me arrive at this place in life.
I'm not the only one Prosper has helped
One borrower, Veronica, said:
I was able to put myself through school with no debt, but staying out of debt after school while trying to earn a decent living was hard. I took out a loan with Prosper to try to get more on top of my finances/some credit debt I had built up. Now, I am achieving my career dreams...I'm able to work for the life I want in the career I love because Prosper helped me get there. I'm not nearly as stressed or worried about finances, because of the loan I took out with Prosper.
Another customer, Derek, said:
Prosper has helped me consolidate my bills and lower monthly payments, so I don't have to worry about enjoying family functions. I was able to get a newer wheel chair and use it at our Halloween Multiple Sclerosis fundraiser! I have some health problems. It's nice that I don't have to worry about multiple payments every month on top of that.
Is Prosper for you?
Prosper Loans makes personal loans for any reason, not just debt consolidation.
Maybe you don't need to consolidate debt, but have the opportunity to take the trip of a lifetime. Or, you're selling your home and need to fund a few projects before you put it on the market.
You have more choices among personal loan lenders today that when I first took out a loan from Prosper in 2006. Still, you should strongly consider adding Prosper to your list of lenders to shop.
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