So my loan on Prosper closed at a final rate of 9%. What was my social capital worth? Did being a known quantity in the Prosper community help?
To start with I decided to try and measure the average loan rate and standard deviation…
I used the ProProsper Loan Rate Analyzer to look at loans on Prosper in the last 120 days with AA credit grade, DTI from 0%-33%, and amounts from 15K to 25K.
| # Loans | AVG Amt | WTAVG Dti | WTAVG Rate | WTAVG – ST DEV | STDEV Rate |
|---|---|---|---|---|---|
| 104 | $20,900 | 19.7% | 11.51% | 8.99% | 2.53% |
So if the final loan rates are evenly distributed my loan was within 1 standard deviation. Which would mean that my social capital did not effect the final rate more than normal…
However, I think the final loan rate is not distributed on a standard bell cure. In stead I choose to claim that my social capital was worth 2.5% or the difference between the weighted average and my rate…
What do you think?
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8 comments ↓
9% is pretty good for a 20k AA.
Personally I don’t like them AAs much. Too many of them pay off early.
Personally I don’t like them non-AAs much. Too many of them don’t pay.
It was certainly worth something. The blog posts drove some traffic to your loan which other borrowers don’t have. I wouldn’t have noticed your loan without the blog posts, for example.
[...] RateLadder attmepts to Measur[e] Social Capital [...]
Dear Friends,
A group of researchers at University of Nevada, Las Vegas, are investigating effects of Weblogs on “Social Capital”. Therefore, they have designed an online survey. By participating in this survey you will help researches in “Management Information Systems” and “Sociology”. You must be at least 18 years old to participate in this survey. It will take 5 to 12 minutes of your time.
Your participation is greatly appreciated. You will find the survey at the following link. http://faculty.unlv.edu/rtorkzadeh/survey/
This group has already done another study on Weblogs effects on “Social Interactions” and “Trust”. To obtain a copy of the previous study brief report of findings you can email Reza Vaezi at reza.vaezi@yahoo.com.
I think having a website with more than a year of history is worth a lot of social capital. It’s a bonus that the website is about lending, but really a reputable blog in any niche would get my respect.
I think all those fishing trips in the sun have cooked your brains! haha.
j/k
[...] great confidence in getting a return on their money. When he examined his loan, he realized that his social capital shaved about 2.5% off the average interest rate. These are examples of very real [...]
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