The credit bureaus have alerting systems that many of the big banks, mortgage brokers, and finance companies subscribe to in an attempt to get leads on people applying for a loan. 

Here’s how it works.  When you fill out a loan application, the lender pulls a credit report to see your payment history and other financial information.  Interestingly, the credit bureaus offer a service to alert subscribing lenders that a certain type of inquiry just occurred and the provide these companies your financial information.

Guess what happens next – you got it, your mail box fills up with offers and your phone rings off the hook!!  If you were asked, I am certain that most of you wouldn’t consent to this sharing of your information. 

What can you do?  For starters you can contact each of the credit bureaus asking them to place you on their “do not market” list.  Be specific that you want to be on both the “do not mail” and “do not call” lists.  Include your current and previous address and full name.  Here are the contact details for each bureau:

Credit Bureau Main Opt-Out Line  (888) 567-8688

1. Join our group – group membership is the biggest factor impacting the chances that your loan will be funded.
2. Create a personal budget (and business budget if you are seeking a business loan).  Our excel templates will help you create your budget.  Score.org has some other great templates for small business here.
3. Review our factors in getting funded.  Make sure to follow the tips on what to do and avoid those we say not to do.  These will drive whether or not your loan is funded.
4. Complete your loan listing using our borrower template.
5. Check out the borrower rates and make sure you post a rate that is likely to get funded.  Sometimes the best rate can be obtained by posting a good rate that lenders bid down. 
6. Review the prosper.com borrower guidance and complete your loan request.
7. Let us know when your loan is complete via a message from your account on prosper.  We’ll get on the site and look at your listing, make suggestions and endorse your loan.
8. Sign up for automatic payments.
9. Stick to your budget.

Do’s

1. Join a group and ask for leader endorsement of your loan.  Getting an endorsement is the most important factor in getting funded.
2. Have prosper verify your bank account.  This provides lenders with reassurance that you have a bank account and you are not attempting to defraud them.
3. Offer a good rate to lenders – let prosper determine your credit grade and look at the rates page and see what is getting funded.  Offer a rate slightly higher to be sure you get funded (for example offer 10.25% if the average is at 10%).
4. List for 5-10 days.  Longer listings are more likely to get funded.  It also appears listings that end on Thursday have a better chance of being funded.
5. Create a great listing.  Taking the time to do it right makes a big difference.  Include a budget, explain what the loan is for, and include a picture.  Like school, neatness and accuracy counts – be sure to spell check and use simple formatting to make the listing easy to read.
6. Answer questions promptly.  Many lenders will have a question or two to decide on making a loan.  Asking a question indicates they are interested in lending you money.  Answer promptly and honestly, but how much you disclose is up to you.
7. Use the forums.  Prosper forums are a great way to continue to market your loan.  Get out there regularly to make sure you are getting your loan in front of a wide audience.

Don’t

1. Don’t select flash funding – it is a signal that you are desparate.
2. don’t create a super long profile.  Your listing is more important.
3. Set a below average interest rate – lenders are here to make money and will select similar loans with higher rates.
4. Provide false information – while it may improve your chances, this group does not support misleading lenders.  We will remove our endorsement if any part of your listing is found to be false.

Find new and used cars up to 90% off retail value! 

Let’s do the math.  Say you are looking at two cars, a two year old Accord with leather and 20,000 miles and a brand new Infinity G35.  The G35 will probably cost $15,000 more in total.  Assuming you put $3,500 down on both and got a 7% interest rate over 5 years, you’d end up paying $18,000 more for the G35. 

Your comparison probably won’t be as extreme.  The dealer counts on the fact that they can talk to you in terms of payments and you won’t do the math.  Paying $50 per month more over 5 years will result in an additional $3,000 more over the life of the loan.  I’d rather have the $3,000 and have a little less ego in my car.

Before you buy, you need to do your homework in three areas:

1. know what the car is really selling for so you can negotiate the best price
2. figure out what you really need versus what you want (I.e. Honda vs Infiniti)
3. See what interest rate you qualify for so the dealer will try to beat it

In the end, as long as you go with a quality car and realize that the new car thrill won’t last as long as the payment, you’ll be happy.  I’ve provided a payment estimator on our Excel Template Page for a4 year and a 5 year loan.  Find where the interest rate intersects with the loan amount (don’t forget taxes) and you’ll get an approximate payment.  Print out the sheet and take it with you next time you buy a car.

Every month 1000’s of cars get repossessed through various defaults, seizures, tax and surplus laws. Constant influx of new vehicles and enormous expenses needed to store them cause steep discounts! Go directly through the sources to find your bargain. Bids start as low as 90% off the book value!

1.      Figure out who you owe money to and categorize it into either “Good Debt” or “Bad Debt”.  This is the single most important thing you can do.  “Good Debt” is debt that is secured by an asset that appreciates in value.  An example here would be real estate.  “Bad Debt” is debt that you take on in which there is no tangible evidence of an asset that appreciates in value.  The types of debt that I put into this bucket are credit card debt, auto loan debt, personal loans such as installment loans, debt used to finance education but not technically classified as student debt and any other loan obligation that is not specifically represented as ownership of an asset that does not appreciate in value.  That 52” plasma TV you put on your credit card or that
Kawasaki motorcycle you purchased is not an asset that appreciates in value, therefore it is “bad debt”. 

2.      Once you figure out who you owe, and in which bucket, determine how much you owe.  This is a simple exercise of determining the sum-total of all of your “Good Debt” and your “Bad Debt” obligations.  On average your “Good Debt” should not amount to more then approximately 30 to 35% of your total household income.  Add up the sum total of your “Good Debt” obligations, then add up all of your income (to include rental income on investment properties as well as cash-flow generated from business investments) and divide the two.  The resulting percentage should not be greater than 30 to 35%.  In shifting your attention to the “Bad Debt”, your primary goal should be to get this amount as close to $0 as you would be practically allowed based upon your household income and your lifestyle.  This may not be achievable in the short-term but I am hoping that the advice I provide in this article will allow you to eventually get there.  Believe me, it is a freeing experience once you get there.  In order to get there, you need a plan and then the discipline to stay there.  3.      Once you figure out how much “Bad Debt” you have, you need to evaluate how easy it would be to consolidate all of that debt into one consolidated loan instrument.  Consolidation would make managing your finances much simpler as well as allow you to more proactively manage your budget (which we will get to in a minute).  Additionally, my bet is that once you consolidate all of this “Bad Debt” into one consolidated loan the resulting interest rate you would pay on this consolidated loan would be less than the sum total of all of the different interest rates you are currently paying.  Lower interest rates result in lower monthly expenses which result in a faster path to getting rid of all of your “Bad Debt”.  Many financial institutions offer loan consolidation products.  In fact, if you are interested in consolidating your debt, please visit our Lending Group  to apply for a loan consolidation product. 4.      Once you determine which debt can be consolidated you now need to figure out what your total expenses look like.  This should include all of your income as well as all of your “Good” and “Bad” debt and your day-to-day expenses.  I recommend doing this on a monthly basis.  It is simple, figure out the sum total of all of your income and make an itemized list of these items along with the amount of the income.  Then, sit down to determine all of the places where you make a payment each month along with an estimate of how much it costs.  This should be a very detailed, itemized list and should include everything you spend your money on each month or any services you pay for each month along with an estimate as to how much.  Here is a table to give you a few examples of the types of things you need to be thinking of in each category to get you started. 

5.      Now that you have a list of all of your “Good Debt”, your “Bad debt” and the expenses you incur each month as well as an estimate of your monthly income, you need to set up a budget.  This is the part of the process that requires the most financial discipline.  The reason it requires discipline is because you need to take a hard look at your expenses and determine where you can reduce or eliminate certain expenses.  By consolidating all of your “Bad Debt” under one loan with a lower interest rate, you will be decreasing your expenses.  You need to determine where other opportunities such as these exist in your budget.  You really need to think broadly about this one and consider all alternatives.  Examples include reducing the amount of times you eat out at restaurants or reducing the amount of expensive entertainment you engage in each month.  Make a list of these opportunities, along with the pros and cons of taking action on them and then prioritize the list based upon the biggest savings opportunity and the easiest to carry out.  If anything is a large opportunity and easy to do (i.e. it doesn’t cause you to make a big sacrifice) you should do it immediately.  Other choices will be more difficult to make.  Bottom line here though is that you need to determine how badly you want to reduce your expenses so that you can free up income to pay off that “Bad Debt”. 6.      Once you set up your budget, you need to have the discipline to manage your finances to that budget.  This is the single most difficult thing to do because it will require a radical change in behaviors as well as the discipline to resist impulsive purchases or reverting back to bad habits. 7.      After a few months of living your lifestyle under your new budget, revisit and revise your budget regularly.  A budget is a tool that should be updated and revised as your lifestyle changes.  If you move to an inner city and no longer need a car to get around, sell it and get rid of your automobile insurance.  Then adjust your budget to reflect this lifestyle change.  If you can get your employer to pay for your internet service at home because you work from home, update your budget accordingly.  The closer you can stick to your up-to-date budget, the higher the probability of success in managing your lifestyle against it. If you carry out these recommendations you will be well on your way to financial freedom and reducing your debt load. 

For more financial advice, person to person loans and general financial information, please visit our web site at: Addventure Capital

What’s Good About Credit Cards? Let’s begin by exploring some of the good aspects of credit cards.  Credit cards are ubiquitous financial instruments.  That is to say that they create a tremendous amount of flexibility and convenience.  They are accepted almost everywhere things can be purchased.  For me, convenience is one of the most appealing attributes of credit cards.  In addition, used wisely there are a plethora of ways credit cardholders can benefit from the utilization of credit cards.  These benefits come in the form of “rewards” that are accumulated in the form of cash-back rebates, airline miles, hotel rewards and points that can be accumulated for merchandise.  Most rewards are accumulated at a rate of approximately $0.01 in cash value for every $1 in credit card spending.  If used correctly, this “reward” will not cost the cardholder anything.  There are additional attributes of credit cards that I consider to be good attributes.  They can be used to make donations to affinity groups.  Some credit card institutions allow cardholders to donate a certain portion of rewards accumulated to a special interest group.  Additionally, credit cards serve as a very reliable source of emergency spending capacity.  In the event of an emergency where some type of financial outlay must be made, credit cards can usually be used to cover that outlay.  Proving particularly valuable for large emergency expenditures where cash is not readily available.  I could continue exploring the good aspects of credit cards but I am confident that I have appropriately made my point. 

Could Credit Cards Really Be That Bad? Let’s now briefly touch upon those attributes of credit cards that one could argue are not-so-good or bad.  If used carelessly, credit cards could create the single greatest source of financial distress.  Unbridled spending leads to a vicious financial cycle.  This cycle involves spending beyond one’s financial means, not being able to pay off the balance of the credit card, accruing interest on the unpaid balance and making the minimum required payment by the credit cards company to keep their account in good standing.  In many instances, the combination of the interest accrued on the balance with the amount of the minimum payment leads to what seems like a lifelong journey of attempting to pay off the balance but never feeling like you are making progress toward this end.  In an even worse scenario some type of fee might accrue and the balance of interest accrued along with the minimum payment being made results in a phenomenon called “negative amortization”.  This term is used to describe the situation where the combination of fees and interest rates accrued, combined with the minimum payment being made results in the overall balance of the credit card account increasing and not decreasing.  Here again, I could continue discussing the ill effects of poor credit card management.  In lieu of this though, my preference would be to move to the real focus of this article. 

Unlocking The Good in Credit Cards I would like to discuss practices that should be adopted by credit card users to unlock all that is good about credit cards.  1.      Only use your card to purchase those things which you have the cash to then payoff.  If you need to use your card for an emergency that you don’t have the cash to pay off the balance, make sue you put yourself on a regimented budget until it is paid off. 

2.      Set up electronic bill pay on your primary checking account.  This will enable you to ensure on-time payments every month.  Additionally, you will save yourself $0.39 per month and you won’t have to worry about the anxiety of writing a check, getting it to the post office and hoping that the US Postal Service will get it to your credit card company on time. 

3.      You only need one credit card.  Yeah, I know it is sexy to open up that wallet and flash that cowhide full of plastic.  I hate to break the bad news to you but the cashier behind the counter at Walmart doesn’t care how many credit cards you have in your wallet.  All that he/she cares about his/her next  break is.  One credit card makes managing your finances easier and minimizes the probability that you will let credit card debt take over your life. 

4.      Don’t ever take a cash advance on your credit card or use those ridiculous checks that they send you in the mail.  When you do either of these things, interest begins to accrue immediately and there is usually some type of fee or surcharge that is automatically accrued to your account balance.  If you need cash, use your ATM.  If you need a check, open up a checking account.  If you don’t have the cash don’t buy it until you do. 

5.      Credit cards want to avoid, at all costs, you from defaulting on your obligation but they like it when you carry a balance and accrue fees.  As such, if your financial situation changes and you need your credit card for day-to-day expenses or you have already used it for day-to-day expenses and are having a hard time making your minimum payment, call them up and negotiate a mutually agreeable solution.  Likewise, if a fee accidentally accrues, call them up and ask them to remove it.  They would rather have you as a customer than not have you as one at all.  Remember that credit card companies incur what is referred to as an origination expense for gaining you as a customer.  They are willing to negotiate on almost anything to ensure that they don’t lose their investment in obtaining you as a customer. 

6.      If you like the idea of earning some type of rewards for your spending frequency, shop around.  There are many, many different types of programs with an innumerable number of product characteristics.  Do your research before opting for a rewards product that you think might meet your needs.  When you do find a rewards product you like, do not apply for it online.  Credit cards originated online are presumed by most credit card companies to be more risky and are priced with a higher interest rate and fee structure accordingly.  Call the credit card company and ask them to put you on their solicitation list for the particular product you are interested in applying for.  It will take some time for them to get you on the list and then for you to apply for the product but the lower pricing will be worth it. 

7.      Don’t ever sign up for any of the products offered as a “cross-sell” by credit card companies.  They are offered via telemarketing, when you call into customer service or even as static offerings on your credit card statement and on the “bang-tail”’ on the envelope you use to mail in your payment (the little piece of paper that hangs off the envelope that usually offers you a clock radio of $29.95.  These products are designed to create additional revenue streams for the credit card company.  The economics of these products heavily favor the credit card company and only provide marginal benefit to the cardholder.  Plus, they are pretty bad products and the  quality of each leaves something to be desired.  If you utilize these practices to help you manage your credit card as a financial instrument, you will not go wrong.  You will come to realize that your credit card can be a tool that you use to more effectively manage your finances.  As such, you will be the beneficiary of all that is good with credit cards and none of what is bad about them. For additional financial information and practical advice or for financial alternatives to credit cards, please visit our Lending Group at: Addventure Capital 

Its tough at first, but it does get easier and it becomes rewarding as you see your debt load shrink and your saving grow.  You need to prioritize and determine what is really a need versus what you just want to have.  A great way to think about budgeting, is to look at everything that wasn’t around when your parents were your age as a “nice to have item”.   For example, our parents didn’t have cell phones or high definition digital cable.  What’s more, these are often expensive items and you pay them every month. 

Look at it this way, going for the high definition digital cable probably costs you $75 a month more than basic cable.  That works out to $900 a year.  How about switching to a less expensive cell phone plan – probably another $250 a year.  Eat out for lunch every day?  At $10-$12 a pop, that can add up to $1,200 a year more than it would cost you to bring your lunch to work.

I’ve attached a link to budget spreadsheet you can use to help see where you can save some money.  Don’t let the size overwhelm you, just start filling in what you know and start tracking what you don’t.  See where you can do with a little less and watch your money grow.

If you find you need a little extra cash, check out the Addventure Capital Group on Prosper.com – we’ll help you get up to $25,000.

Make Sure Your Loan Gets Funded
There are lots of factors that impact the likelihood of your loan getting funded.  Through a careful analysis thousands of loans, we found a handful of factors jump to the top of the list.  By far the most important factor in whether a loan gets funded is a group leader endorsement.  The group leader endorsement was about twice as powerful as any other factor we reviewed.                                      

You’ll Get Our Support
We want to help you get your loan funded.  We will personally endorse your loan request and consider investing in your loan ourselves.  Follow our guidance and you’ll have the best chance of getting your loans funded.  We have clear – mathematically proven – strategies to maximize your chances of getting the money you need.  

Not all prosper.com groups are created equal.  Some groups do a much better job of getting their member’s loan requests funded at the best rate.   Currently on prosper.com, only 32 groups out of 500 with more than 10 loans have an average rate below the average for non-group loans. 

This site is under construction, but keep coming back as we plan on adding a great deal of content to help you navigate a journey towards financial freedom.