Prosper is a Peer to Peer lending site that offers loans to individuals outside the constraints of banks. The loans are unsecured and can be for almost anything. Investors (average joe's like me) buy a percentage, typically in $25 increments, of your loan. These investors might ask you questions about your credit history, job, and purpose of the loan. If enough investors "buy-into" your request, your loan will be funded.
Now onto the offer by United, the message on the earn page doesn't give much information about the offer except that you can earn miles for every $1 borrowed:
"Earn award miles for every dollar you borrower with a personal loan through Prosper - up to 18,000 miles. Prosper offers low fixed rates with no hidden fees or prepayment penalty. Visit Prosper;s and receive your free rate quote today."
The landing page for Prosper isn't any better:
The real details can only be found after you click on the #1 at the bottom of the page.
Who is eligible for this offer?
Anyone who is current United MileagePlus Member.
This depends upon if you get a promotional offer via mail. According to the Terms & Conditions, there are 3 different earning rates: A) 1 pt for $1 B) .514 pt for $1 or C) .343 pt for $1
If you don't get a direct mail piece with a "unique personal offer code," you will automatically get Offer C, or .343 pts for every $1 loan obtained.
When will miles be deposited?
The miles will be deposited into your MileagePlus account within 6 to 8 weeks after the loan proceeds have been disbursed.
What does a loan through Prosper cost?
Let's assume you take out a $10,000 loan for an engagement ring.
If you continue with the application process, Prosper will pull your credit. Proceed cautiously with the application process. I have not gone through the application process; therefore, I can't tell you an exact interest rate.
Moving forward with my fake engagement ring loan, I can assume an interest rate of about 10% or an A rating with a loan term of 3 years.
On a $10,000 loan, I will pay $1,000 yearly in interest or about $83.33 a month. Assuming a minimum of 3 months having the loan, I would pay about $250 in interest payments. In addition, Prosper charges a closing fee as well:
On top of the $250 interest payment, I would have to pay $400 in a closing fee. The closing fee will be deducted from the loan proceeds.
To get my $10,000 loan, I would have to pay $650.
What I would earn from my $10,000?
Since I have not received a promotion offer, I would only earn .343 bonus miles per $1.
$10,000 x .343 bonus miles = 3,430 miles
Is this a Good Offer?
The ultimate question is this a promotion worth doing. After working through the process, the answer is no!
My 3,430 United miles earned would cost me $650 or $0.189 per miles- ouch! You can buy miles from United for cheaper than that.
Now, lets assume that you got targeted for the 1 mile for $1 borrowed offer. You would earn 10,000 mile for $10,000 borrowed and still only pay $650 or $0.065. This is still higher than buying the miles.
Put into prospective, the new Citi American Airlines Executive card has an annual fee of $450, but earns you 100,000 miles, at this moment. If you had $650 to blow on miles, wouldn't it be better to get the new Citi card?
On the other hand, if you need a loan from Prosper anyway; why not earn points for doing it?
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