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Old 05-23-2009, 10:07 PM   #41
Thinks s/he gets paid by the post
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Originally Posted by calmloki View Post
That's why i prefer to loan to acquaintances rather than friends or family - don't want bad feelings on either side or embarrassment or weird power position stuff through being a lender - or collection person. Acquaintanceship is close enough to give a good hint about creditworthiness but not close enough to make me worry about bad feelings if things go bad.
Ya. I feel more comfortable gifting if they really need it.
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Old 05-24-2009, 01:14 AM   #42
Give me a museum and I'll fill it. (Picasso)
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Originally Posted by ERD50 View Post
I'm amazed that 60% actually DID pay in full!

So I guess you'd need to charge 50% interest rates or something (would need to know the time frame) to make a profit (but then it would be harder to pay, and the default rates would go up....).

Gee, sounds like the credit card companies are Saints to offer credit at the rates they do!

Well we/they weren't stupid about it. Payments were automatically deducted from checking account once a month, and if you didn't have money in the checking account, you get hit with fee from both Prosper and your bank. So the only way to to stop making payments was to close your checking account.

The Experian data predicted that about 10% of my loans would default. Actually two of my good loans were at some of the highest interest rates 29% (the max allowed) and 27% which they have been paying for almost 3 years.

I went back and doubled checked my figures and misread some info. To my shock my investment in Prosper is better than the markets

Total Deposit $2,500
Withdrawals $2,147

Current loan balance $218

Total loans 37
Paid 13
defaulted 13
Active loans 11
current 6
late 5

So given past history I'll probably collect $.10 on the dollar for the late loans and if folks have been paying for 2.5 years will continue to pay. So I may end up getting all but $200 or $250 back. Beats the S&P which was right about 1300-1400 when I was making the loans.
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Old 05-24-2009, 04:40 AM   #43
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I loaned my brother in law $5000 to help him buy a wedding ring.

Then a few years later, I start to hear from him and his wife an ongoing story about how we shouldn't ask for the money back and that my wife and I should have directly given them even more money to pay for medical school. Because they are in a relatively harder position than us

I wrote it off and learned that as a lesson never to loan money to friends or family. Keep the 2 separate.
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Old 05-24-2009, 06:09 AM   #44
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Not to hijack the thread, but who would go into debt to buy a wedding ring? My god.
Money's just something you need in case you don't die tomorrow.
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Old 05-24-2009, 10:39 AM   #45
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Originally Posted by Maurice View Post
Not to hijack the thread, but who would go into debt to buy a wedding ring? My god.
A LOT of people do, especially the ones that drink the "2-3 months salary" Kool-Aid. How many people in their 20s, for example, even HAVE 2-3 months salary saved up? And if they do, shouldn't they either be saving it in an emergency fund or setting it aside as a down payment on a home (assuming they don't prefer to rent)? And if you're planning on kids, you'd have reason to hold on to the cash even more.

The ring I bought my wife was based on her comments but my selection. She told me her ring size and that she wanted a heart-shaped diamond. The rest, including the size, was up to me. I wound up finding something in about 0.6 carats for a solitaire engagement ring. The cost? About three weeks of my then-current take home pay. And she loved it (and does to this day) -- she's never been one for big, flashy or gaudy jewelry (she usually wears stud earrings, for example) and she says she'd be afraid of wearing anything much larger, both in terms of losing the stone or attracting the criminal element.
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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Old 05-24-2009, 04:16 PM   #46
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My brother needed to borrow about $5K to help cover some medical expenses for his wife who eventually died of cancer- he paid me back when he received the life insurance payment. I had written the money off and was surprised when I got the check- I also didn't have a problem with writing it off because of the circumstances. This isn't the first time I've loaned money to family and so far, it's always been paid back.
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