Mapgirl’s Fiscal Challenge

HA HA! I just bid sniped someone! (But, I’ll get to that later.)

I forgot to tell you about Prosper and how that’s going. I don’t even include it in my net worth calculations since it’s a $100.00 experiment, more of an expense right now than a receiveable in my mind, i.e. it’s gone on the balance sheet and it’s only an income statement as an expense item because it’s unaudited and extremely conservative accounting, but I digress before I even get started.

As of mid-December, I had one $50.00 loan out for about 10.40% . The credit grade is B. They have a debt/income ratio of 25%. They are interested in consolidating high interest credit card debt. It’s really a guy, but I say ‘they’ since his photo has a happy-looking couple in it. Could be a ruse. Who knows?

Right now, he’s made two payments. One for December, and a second which should clear in early January. My loan’s value right now is $50.17 cents. I’m not sure, but when I mouseover the amount, it has a dotted line and tells me the amount to the 6th sig-fig. I wonder why it does that. (Is it an Office Space ruse to deal with the fractional pennies?) The loan service fees are penny since my loan amount is so small. I’m not 100% sure yet how I feel about those service fees, etc, but we’ll see in the end when the experiment plays itself out. (Well sooner than the 3 year repayment schedule, I hope.)

The remaining $50.00 I just didn’t have time to sit around for the bids to win. I finally figured out how to beat being sniped at the last minute. I changed my bidding to win the first loan, which was to bid a few percentage points lower on the interest rate. That is how I was ‘buying’ the loan. Once I understood how the bids were being done, i.e. not like a live auction where it falls in fixed increments that are visible to all bidders, but hidden and revealed as lower and lower bids are received, sort of like a dutch auction, I got it. (Dutch auctions are weird business, which is why I wouldn’t participate in an IPO like that. And during the dot-com heyday, that’s where I learned such a term.)

So recently, I bid sniped. I looked at the soon-ending auctions and I bid on one that had about 20 minutes to go on a Friday night. I put a ridiculously low bid on it, but better than I could do with a 3-year CD, which for all intents and purposes, these are. And I won a second bid. We’ll see if all the paperwork, etc goes through, but it did pique my curiosity again about using Prosper to consolidate my stupid credit card debts. After all, this is kind of like my credit union visit 5 years ago to consolidate my credit cards.

I’ll give this a few more months before putting it onto the net worth/balance sheet as an asset. We’ll see what this is really about before I dive into it either with more money as a lender or put up a loan as a borrower.

ps - I wrote this over the weekend. As of today, Thursday, the loan paperwork has not completed for this second loan.