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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Listing Review, Prosper.com
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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.
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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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