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Debt Consolidation Using Prosper Loans

Created: On December 16, 2009 @ 5:56 pm In

More people are turning to peer-to-peer (P2P) lending sites to borrow money for [1] debt consolidation. During November, 54% of loans at Prosper were for debt consolidation, according to a release from the P2P lending marketplace.

“This is the second month in a row where the majority of borrowers on Prosper are seeking to knock out their credit card debt at better rates and terms,” said Chris Larsen, chief executive officer and co-founder of Prosper. “Debt consolidation has always been the number one use case on Prosper with business loans being the second most popular.”

Pay Down Credit Card Debt

Many borrowers are using P2P debt consolidation loans to pay off high-interest debt. They are fed up with [2] credit card debt that may get worse because card issuers are hiking interest rates ahead of credit card reform laws going into affect next year.

People with good credit scores may receive loans with interest rates that are much lower than what credit card companies charge. People with mediocre credit can end up with interest rates similar to or higher than credit card interest rates.

Debt Consolidation Loans

You can apply for a three-year [3] debt consolidation loan at Prosper and specify how much interest you are willing to pay. Lenders bid on your loan and decide how much they are willing to lend and at what interest rate. Loan payments are deducted from your bank account each month.

P2P lending is gaining more converts as credit conditions remain weak. If you’ve exhausted your options for borrowing a debt consolidation loan from traditional banks, it may be worth it to check out a P2P lender.

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URL to article: http://www.debthelp.com/blog/2009/12/16/debt-consolidation-using-prosper-loans/

URLs in this post:
[1] debt consolidation: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=2009120800537

[2] credit card debt: http://www.debthelp.com/kc/credit-card-laws-no-debt-reduction-help.html
[3] debt consolidation loan: http://www.prosper.com/