It clearly states in Chapter 302 that interest rates for personal loans are limited to a maximum of 10% and rates for business loans are limited to 18%. Chapter 305 addresses penalties and remedies for violations. There are some listed exceptions to the 10% rule but I'm not sure Prosper would fall under any of these.Texas Prosper.com borrowers
I think Prosper is worried they have been violating the law, otherwise why have they changed the interest rate limits to match those listed in Chapter 302?
Chapter 305 states anyone being charged in excess of these rates must write to the lender and request relief before filing the case in court, where triple the damages can result.
Have I misinterpreted the statute, or are we looking at a potentially huge legal mess for Prosper?
Disclaimer: I have an outstanding Prosper loan (current in payments) at 18% and I reside in Texas.
Please contact the Texas Attorney General & prosper.com if you have borrowed money at greater than 10% interest rate.You may get a rate reduction.Hawaii Borrowers take a blow w/new rate cap, Messge from Malama Ohana (Reg required)
I've just been alerted to the impact of the new state rate cap for Hawaii that went into effect in the latest site update.
Hawaii's state cap is still 12% which means that our Borrowers have been able to list rates at 11% max in the past. But going forward, it appears that the state cap is now imposed as a max APR rate.
This means that the max rate we can offer lenders is now less than 11%. Those that are more math inclined can let me know if that rate is affected by the requested loan amount. But for illustrative purposes, a Borrower requesting 25k can only offer a max rate of 10.30% (regardless of credit grade).
Malama Ohana which is primarily a region-based Group of Island Borrowers will be challenged by this latest policy implementation. Thus, we are taking this opportunity to let our supporters be aware of this change.