Nov 6, 2007 3:42 pm US/Pacific
Save With Dave: Saving With Prosper.com
SACRAMENTO (CBS13) ―
It's an old idea with a new twist. Don't borrow from the bank, or from your peers, only here, your peers can be complete strangers. Tonight, I'll show you how both borrowers and lenders can save and make money.
El Dorado Hills resident Theresa Miller and her family recently moved from Denver.
"We had tough times when we had to buy groceries on the credit card, I know you're not supposed to buy disposable goods on the plastic but sometimes you just had to," says Theresa.
Their credit card debt was up to $12,000. One day, she heard about Prosper.com on the radio.
"Prosper is a person lending marketplace and we're really trying to be an EBay for eloans," explains Chris Larsen, CEO and Co-founder of Prosper.com.
"This is a low-risk loan, and I'm a low risk borrower," says Theresa.
Here's how it works. If you want to borrow money, you create a profile. You can post pictures of your family and explain why you need the money, or you can remain anonymous.
Prosper does a credit check on you, then based on your credit score, they determine the starting rate for your loan. Lenders bid on your loan like an EBay auction, you then pick the ones with the best rate.
"We signed up for a five day auction, if you will, and with three days, we were 100% funded," Theresa says.
Theresa borrowed $15,000 at a rate if 10.75% for three years.
"Borrowers can save between three and five percent compared to what they can get at credit card or bank given their credit score," says Chris.
With her credit card rate of 25%, Theresa would end up paying more than $21,000 over three years. With Prosper, that total would be almost $4,000 less.
"The thought of being debt free is too exciting to think about," Theresa says.
(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)
