Borrower Rate Guidance
With the latest Prosper site update, they added a borrower rate guidance. This feature helps borrowers pick an interest rate that will be successful in the auction process. Previously, Prosper would suggest rates based on where loans had funded at. Experience had shown, however, that listings that started with a relatively high interest rate would get bids and would eventually be bid down while those that started with lower interest rates would languish. Prosper added this feature to help more first listings be successful.
A screen shot, posted by big-al on prospers.org forums (reg required), is below:
2 comments:
And it looks like this feature is causing interest rates to rise...
http://www.rateladder.com/2007/12/12/prosper-interest-rates-on-the-rise/
I think the rate rise you're showing is related to the lender guidance. I think the borrower guidance will have less direct a correlation because I think that, paradoxically, the rise in initial interest rate should result in a lower final rate for loans that fund.
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