2006 December | | P2P Lending, Peer to Peer Lending, People to People Lending P2P Lending News, Information, Borrowing and Lending Strategy

Of my 46 loans. 1 is now late (less than 15 days).

Below is the schedule that Prosper follows in the event of a borrower missing a payment due to insufficient funds (NSF). At any point in this process, if your outstanding payment is paid in full, your account will be returned to “Current” status.

One week before payment is due

  • You will receive an email from Prosper indicating the date and amount of your upcoming payment.

Day 0: First payment attempt

  • On the day your payment is due, Prosper will attempt to withdraw payment from your bank account.

Day 1-5: First failed payment

  • You will be charged a failed payment fee of up to $5, depending on your state lending limits. Failed payment fees are collected by Prosper.
  • You will receive an email from Prosper indicating the amount due, fees accrued, and notifying you about upcoming payment attempts.

Day 8: Failed payment notification

  • You will receive another email from Prosper indicating the amount due, fees accrued, and notifying you about upcoming payment attempts.

Day 10: Second payment attempt

  • Prosper will attempt to withdraw payment from your bank account a second time.

Day 16: Second failed payment notification; late fee assessed

  • You will be charged a second failed payment fee of up to $5, depending on your state lending limits. Failed payment fees are collected by Prosper.
  • You will be charged a late payment fee for being more than 15 days late on your monthly payment. Late fees are the greater of $15 or 5% of the unpaid installment amount, depending on your state lending limits. Late fees are passed on to lenders; Prosper does not profit from late fees.
  • You will receive an email from Prosper indicating the amount due, fees accrued, and notifying you about upcoming payment attempts.
  • If you are a member of a group, your group leader will receive an email from Prosper notifying them about your delinquency and the effect of your delinquency on the group’s reputation.

Day 22: Third payment attempt

  • Prosper will attempt to withdraw payment from your bank account a third time.

Day 26: Third failed payment notification

  • You will be charged a third failed payment fee of up to $5, depending on your state lending limits. Failed payment fees are collected by Prosper.
  • You will receive an email from Prosper indicating the amount due, fees accrued, and notifying you that your loan will be turned over to an outside collection agency for collections.
  • If you are a member of a group, your group leader will receive a second email from Prosper notifying them about your delinquency and the effect of your delinquency on the group’s reputation.

Month 1: Late fee assessed; loan sent to collections

  • You will be charged a late payment fee at 46 days past due for being late on the next month of monthly payments. Late fees are the greater of $15 or 5% of the unpaid installment amount, depending on your state lending limits. Late fees are passed on to lenders; Prosper does not profit from late fees.
  • Your loan will be sent to the collection agency partner selected by the lenders with the largest participation in your loan. The collection agency will attempt to collect the amount due and any fees accrued. Learn more about Prosper’s collection agency partners.
  • Your delinquency will be reported to Experian, Prosper’s credit reporting agency partner, and will appear in your credit history. Your credit score will be negatively impacted.

Month 2: Late fee assessed; collections continue

  • You will be charged a late payment fee at 76 days past due for being late on the next month of monthly payments. Late fees are the greater of $15 or 5% of the unpaid installment amount, depending on your state lending limits. Late fees are passed on to lenders; Prosper does not profit from late fees.
  • The collection agency assigned to your loan will continue attempting to collect the amount due and any fees accrued.
  • Your delinquency will be reported to Experian, Prosper’s credit reporting agency partner, and will appear in your credit history. Your credit score will be negatively impacted.

Month 3: Late fee assessed; collections continue

  • You will be charged a late payment fee at 106 days past due for being late on the next month of monthly payments. Late fees are the greater of $15 or 5% of the unpaid installment amount, depending on your state lending limits. Late fees are passed on to lenders; Prosper does not profit from late fees.
  • The collection agency assigned to your loan will continue attempting to collect the amount due and any fees accrued.
  • Your delinquency will be reported to Experian, Prosper’s credit reporting agency partner, and will appear in your credit history. Your credit score will be negatively impacted.

Month 4: Loan sold to debt buyer; credit history and credit score impacted

  • After four months of delinquency for any single payment, your loan will be sold to a debt buyer and any proceeds will be distributed to lenders.
  • Your delinquency will be reported to Experian, Prosper’s credit reporting agency partner, and will appear in your credit history. Your credit score will be negatively impacted.
  • Borrowers who have defaulted on a loan at Prosper will not be allowed to borrow again on the Prosper marketplace.

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