Ingenious Car Refinancing – Prosper

prosper ingenious financingThere is nothing that gives me more pleasure than seeing someone take a new technology and use it to their advantage to save money – especially when it is done creatively and produces painless savings. I came across a woman who has done this brilliantly using Prosper.com to lower the amount she was paying on her car loan.

While it’s common to see posts from borrowers trying to consolidate credit card and other debt into a single loan at a lower interest rate or people trying to raise money for a number of different expenses, it’s still rare to come across someone that uses it in an inventive way to reduce their current costs. This is exactly what she did.

It’s common

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7 Responses to Ingenious Car Refinancing – Prosper

  1. Max says:

    I would think long and hard about dropping full coverage on a ~$7,000 car to refinance at loansharking 16% through a brand-spanking-new technology.

    Somebody drove into my wife’s 2002 Ford Focus when it was parked at a grocery store. We had to replace the fender, the hood, coil springs, headlights, and the bumper. The bill was $2,300, but we only paid a $400 deductible.

    Things like “getting driven into in a parkig lot”, or “hitting a deer on the freeway” DO happen. One of the 6,500,000 car accidents a year could involve her even if she’s an expert driver. If this lady can justify saving a grand over three years by dropping to “liability only” insurance, more power to her. I don’t think I’d drop the coverage until my car is worth $3,000 – $4,000.

  2. mapgirl says:

    Prevailing wisdom is to drop a large portion of coverage once a vehicle is over 5 yrs old. I didn’t drop coverage but I did raise my deductible, which essentially halved my car insurance.

    I think this was a great interview with a Propser borrower. Thanks for taking the time to write this post. It definitely makes me less wary of Prosper, and now I know what to look for in a listing. Thanks!

  3. Caladia says:

    Wow, thank you for the clear, well-written article. You got everything right!

    I’m the person who’s paying off my car with Prosper, and in response to Max’s comment, above, he’s right about keeping at least some insurance.

    I want to make clear that I am *not* dropping comprehensive or collision coverage– like Mapgirl, I’m basically just raising the deductibles from $280 to $1000. (I could manage $1000 if anything were to happen.)

    Also, advice to anyone using Prosper, if you have good credit, set the interest rate as high as you are willing to accept. If you have a good listing, there’s a good chance that lenders will bid the rate down. This is my second loan with Prosper. (I paid the first one off early.) It’s a great site. If you haven’t seen it, check it out!

  4. makingourway says:

    Great advice. I think it makes lots of sense. Wonderful article.
    Caladia, good luck – btw, lovely name.
    We too maintain fairly high insurance deductibles. In general, most repairs under $1000 you really wouldn’t want to claim anyway. They happen far too often – think of the shopping cart flying into your car door at the grocery.
    The raised premium and claims history effecting renewals would be far too unpleasant.

    Regards,
    makingourway

  5. Pingback: financial independence » Blog Archive » prosper.com borrowing and lending

  6. Chris S says:

    Caladia’s loan rate has been bid down to just under 9% now. This is because
    A) She posts on the Prosper forums a lot, says reasonable things, so people are somewhat familiar with her
    B) She has an obvious surefire way to pay back her loan. So people aren’t afraid to bid down the interest rate, because they are sure they’ll get paid back.

  7. Aimvest says:

    It takes a lot of effort to work the community at Prosper and get a loan request funded. Though there are many times I question the financial acumen of some borrowers, at the same time, I am thrilled to be able to utilize it in helping friends and family realize some of their dreams. My first loan as a group leader in fact is a good friend who is a truck driver. While his credit grade is terrible, it is his one good avenue to getting a down payment for a truck. As an owner operater he has a good chance of doubling his salary. Without peer-to-peer financing support, this dream could not be realized.

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