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Erase Up To $50,000 In Credit Card Debt With PROSPER. PROSPER Credit Card Debt Consolidation Loan.

Welcome back to The Yukon Project. We’ve analyzed millions of credit reports, hundreds of thousands of people’s financial information, and designed programs to help improve people’s financial lives. Today, we’re going to look at the pros and cons of consolidating credit card debt with a loan from Prosper.

One pro of using Prosper is that they offer APRs ranging from 8.99% to 35.99%.

If you have a strong credit profile, you may be able to secure a rate on the lower end of that spectrum, which could save you money compared to high-interest credit cards. But, even if you only have fair or good credit, you could be approved. The average FICO credit score for Prosper customers is 680, which means they probably lend to some customers as low as 620. 

Another pro is that Prosper offers loans between $2,000 and $50,000 for their credit card debt consolidation loans.

This wide range means they may be a good fit whether you have a small amount of debt to consolidate or a more significant amount. If you have more than $50,000 in credit card debt, I would recommend consulting a certified debt counselor at a non-profit organization. They can help you think through your options. 

Prosper also allows cosigners on their credit card debt consolidation loans.

A cosigner is someone who agrees to take responsibility for the loan if you can’t make payments. If you can get the loan that you need without a cosigner, it’s often better not to entangle a loved one in the process. Not just any cosigner will help though. The best cosigner would be someone with a higher credit score, a lower debt-to-income ratio, and a higher income. If they have one or more of those things, they can improve your chances of being approved, getting a competitive APR, or borrowing a larger loan amount. 

Now, let’s consider some of the potential cons. Prosper charges origination fees between 1% and 8%. The origination fee should be accounted for in your APR, so it’s not in addition to the APR. The other thing you need to know is that the origination fee is deducted from your loan proceeds before you receive the funds. For example, if you borrow $10,000 with a 5% origination fee, you’ll actually receive $9,500 but will still owe $10,000. Origination fees are quite common, but not all companies charge them. If you are offered two loans with the same APR, the one with the lower origination fee is better, especially if you plan on paying the loan off early. 

A Con is Prosper also charges several other fees on their Credit Card Debt Consolidation Loan.

There’s a late fee of $15 or 5% of your unpaid amount if you miss a payment. If you pay by check, there’s a fee of $5 or 5%. And if a payment attempt fails, you’ll be charged $15. Of course, we always hope to never have to worry about these fees, but things happen. Being late on Prosper payments can really add to the cost of borrowing. 

Another potential drawback is that Prosper doesn’t offer direct payoff of your credit cards.

You’ll receive the loan funds and need to pay off your cards yourself. Some people prefer the convenience of having the lender handle this process. But there’s another reason why it’s good that a lender offers this service: it means that they understand that the loan is meant to replace other debt and won’t add to your existing debts. This should make it easier to be approved for a loan. Unfortunately, Prosper doesn’t offer this service. 

Lastly, keep in mind that Prosper can take up to 5 days to make a lending decision and 1 to 3 business days to disburse your funds after you accept the loan. It’s possible the decision can be made in the same day you apply and that you can receive the money the next day, but it isn’t guaranteed. The process could take up to a week. If you need money immediately, be aware of this timeline.

As always, we recommend comparing offers from multiple lenders before making a decision. Every lender has a different algorithm on how to decide who to lend to and at what rate. You should shop around to be sure you’re getting the best deal you can get. At The Yukon Project, we’ve tried to make shopping around easy. On our marketplace page, you can apply to one of our featured lenders and we will check your rate with up to 40 others behind the scenes. They use soft credit pulls, so applying won’t affect your credit score. We will show you all the companies that approve you so you can pick the best lender for you. 

If you found this video helpful, please give it a like and consider subscribing to our channel. We’re committed to providing content that helps you achieve your financial goals. Thanks for watching, and remember, a debt-free life is within reach!

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Jonathan Walker