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Now let me preface this article by saying that there are instances in which canceling a listing is not appropriate, but in others it’s perfectly reasonable to do so, and in fact it benefits lenders as well.

When you are using to try and get a loan, often times you make a fundamental mistake like asking for a loan at too low an interest rate. While this loan may get a few bidders, the vast majority are never funded.

Many Prosper borrowers re-list their loans to correct such mistakes and increase their chances of funding. Why bother waiting until the loan expires? Cancel it. Start again. Get your new loan request up faster and release a lenders funds so that they can either re-bid on your loan again or move on to other loans. An example of this would be a 9 day loan in its 4th day with only 5% funding on $10,000. At this rate, it’s very unlikely the loan will be funded. Trying again at a different interest rate would be a more effect way to move forward rather than indulging in hope when the chances are heavily stacked against you.

Now, when is it not appropriate to cancel a listing? How about when it’s fully funded and with hours to go? Many people start at artificially high interest rates hoping to attract lenders but then get disappointed when their interest rate doesn’t get bid down enough. You should never create a listing at an interest rate you are not comfortable paying. It’s very inappropriate to strand lenders in this way.

So, cancelling a listing should only be done in situations where it benefits both the borrower and lender. If you are looking for a loan, you can check out Prosper’s borrowing details here.


At January 9, 2008 at 8:29 AM zcommodore said...

First, there is no such thing as a "9-day listing" on Prosper. The options are 3, 5, 7 and 10 days.

Second, I've seen numerous instances where borrowers pulled their listing with a day or two to go when they probably would have reached fully funded if they had just sat tight for the last day. Lenders often lend more on the last day than on the first 2, 4, 6, or 9 days of the listing due to the wait time of funds sitting in the account or even availability of funding.

Think about it, if a lender has funds arrive in their account one day and they're looking for loans manually, and they find two loans they like but one ends in 9 days and one ends if a few hours, which is more likely to get a bid?

Personally, I'd advocate shorter listings that end towards the end of the week when bidding activity is greatest than pulling a listing early and restarting the 10-day or 7-day clock.


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