No, not me!!!
Would you lend money to help someone get into debt?
As I’ve mentioned before, I find exploring Prosper fascinating. I like to see what sorts of things people are using it for. Often, it’s stuff I could get behind–like debt consolidation at a lower rate. Mr. Micah’s credit card was at 29.9% APR, so I can even understand why people would be ok with 25%. So, awesome. You’re helping a fellow human being get out of debt at a rate which eases their pain and simplifies their repayment! (And making a little money.)
Or it’s things like starting/expanding a small business. The person is, theoretically, putting the money into a business which will then grow and produce. Worth a shot.
I ran across a posting a couple days back for a guy who wanted to borrow $5000 at 27% APR to buy an engagement ring. *bug eyes* He’d tried to get the loan funded twice before, but people didn’t bite.
Best case scenario, he’ll have the money paid back in a few months and just doesn’t have the credit to get anything better because…well, maybe he just has no credit history. And he wants to buy the ring now because there’s a special day coming up and he wants to propose then.
Worse (but not worst) case, he spends at least a year paying it back and it costs him another $1000+ in interest. Worst, of course, would be a default.
Maybe he thinks that it’s worth going into debt for the woman he loves. It’s probably not—at least not that much. If she requires that expensive a ring and he can’t afford it, there’s a problem already. He may want to spend it out of his great love for her and desire to make her feel special, that’s sweet but I don’t know if I’d want to enable it.
As a grown man, he has the right to do what he wants with his debt (though I hope the girlfriend is aware of his financial situation–and he of hers–before they get married). He could obviously use a credit card (I guess he has higher interest) or perhaps get a loan from the jewelry store.
As it is, he’s appealing to the goodwill people on Prosper to support his love with their loan. Would you do it?
(Let’s assume a decent case scenario, where he pays it back on or a bit before schedule and there’s no collections agencies involved)
Or do you dislike debt so much that you don’t want to enable someone?
Or do you think it’d be better if he got 27% from Prosper than 30% from somewhere else?
What would be your reasoning?
On a sweet note, my MIL just got an engagement and wedding from from my FIL for Christmas. He hadn’t had the money to buy her one 30 years ago, but he used his jewelry-making set to put something really sweet together for her. It was so cute!
photo is of me and the boy!