Prosper.com, a company which offers a peer to peer lending marketplace, allows borrowers to take out unsecured loans from other members of the website using a reverse Dutch auction. As a borrower, you post how much money you want to borrow and the maximum interest rate you are willing to borrow at. From there, other members on the site bid-down the interest rate and the investors that bid the lowest interest rates fund your loan.
In order to get the lowest interest rate available, you need to make sure that your loan listing is appealing to investors look for. Investors want to get the maximum interest rate they can earn while taking the least amount of risk. You can minimize the perceived risk that an investor sees in your loan listing in a number of ways:.
You want to make sure that your credit report is in check. If there are any bad debts or errors on your credit report, get them taken care of immediately.
Although there’s no real evidence to support that lenders are more willing to invest in users that post a picture, it’s definitely worth doing to establish a human connection. If you have a professional picture of yourself, even better.
Make sure to provide timely answers to investors that ask questions on your loan listing and answer them publicly as well. If one investor has a question about your loan, chances are several others do as well.
If you have a decent credit rating and a reasonably well written description, your loan will probably be funded. However, if you can give investors additional reason to believe that you will repay the loan, you could potentially end up getting a lower interest rate.