Wednesday, January 2, 2008

New Type Of Borrower

Prosper has put in a system where the borrower can indicate how they'll use the loan proceeds. Some examples include debt consolidation, home improvement loan, business loan, and so on. If the is correct, they may need to add "Heat the home" to the list:

For perhaps as many as 27 million American adults, keeping warm this winter will mean borrowing money and 20 million will use credit cards to be able to afford their heating bills, according to a poll.

Nearly 12 percent of Americans say they will need to borrow money to pay winter heating bills; 9 percent will need to use credit cards to be able to afford their heating bills. The poll, commissioned by and conducted by GfK Roper Public Affairs & Media, surveyed 1,004 randomly selected American adults by telephone Dec. 7-9, 2007 to gauge their attitudes about energy costs in 2008. A majority say they expect oil and gasoline prices to get worse in 2008.

I have generally avoided anyone who writes a listing requesting money to pay their bills. That is an indicator of trouble to come. I will consider borrowers who are looking to improve the energy efficiency of their home, especially when the payback is easy to understand (like a new high efficiency air conditioner or heater).

1 comment:

j9359 said...

I agree, it is a bad sign when someone requests a Prosper loan to pay for a regularly occurring expense like heat. But I don't think putting things like this on a credit card is always bad. The expenses is uneven and while some folks have utilities that offer an equal payment plan to help smooth out the costs there are probably many folks that don't have such a plan.