Unexpected Prosper Funds

I have money invested with Prosper and Lending Club- two peer-to-peer lending sites. The loans I've funded at both sites have been successful so far, which is great. Until recently though Prosper had a minimum withdrawal of $25 or $50. So even though I was earning money I couldn't access it.

So imagine my surprise when I logged into Prosper to get an idea of how much was hanging out there and realized that the withdrawal minimum had been lifted. As I'm sure you've already guessed that those funds ($19.76) are on their way to my bank for a brief layover before going towards debt. An additional $5.33 was at Lending Club, so next week we'll be 25.09 closer to our goals.

Prosper is going through a quiet period, so they're not taking any new lenders. Lending Club is taking new lenders. They have a nice referral program where new referred lenders receive $50. If you're interested leave a comment and I'll send a referral.

Debt Payoff Milestone

This week I hit my first major debt payoff milestone and I'm so excited! The loan on the car has moved from the 5 to the 4 figures. I felt like I was hanging around in the $10,000 area forever and an happy to have moved down into the $9,000's.

I'm going to have a little milestone party, maybe with a free DVD from Redbox, and get back to earning extra money!

Small Quarterly Update

This morning I started wondering how much I've paid towards my debt this year. To be honest when I updated my sidebars the other day I was a little bummed. So this morning I did a little math and learned something that made me really proud.

In the first 3 months this year $3339.29 has gone to my student and car loan companies. Of that, $2,039.65 was in overpayment. That makes me so excited I don't really konw what to say. It gives me the motivation to keep moving forward with my saving and spending plans, despite what the progress bars say.

$500 Phone call

Earlier today I was catching up with other blogs and came across this post at Paid Twice. She's thinking about starting an automated savings account and asked readers about their experience with auto savings/debits. A commenter mentioned a rate reduction on student loans and I started thinking about my student loans. I did ask if there was any way to reduce my rate a few months ago. They said no, not even with auto debit.

Instead of thinking well that didn't work with my loan I decided to give it another try. I called my loan folks and asked if auto debiting would reduce my interest rate. She though for a moment, did some typing, and found me a great nice answer.* Auto-debiting my monthly minimums will drop my rate .25%. Now a quarter of a percent on $1000 wouldn't get me that excited. But the student loan, despite my efforts so far this year, weighs in at just over $26K. I immediately pulled up a debt calculator do see what what the difference would be.

	Interest Rate	Months	Interest Repayment	Total Repayment
Original	6.8	111	9,113.85	35,118.79
New Rate	6.55	109	8,614.19	34,619.13

The difference? $499.66, which we'll round up for the sake of a nice title.

Now the plan isn't to take that long to pay the account. This year I've paid more than $1,900 and my first due date** is a week away. I've been thinking about different ways to attack my debt but plan on this loan biting the dust in 2012.

Not bad for 5 minutes of work.

*After a little thought it would need to be at least 1% for me to give it great. 2% would be amazing and I don't even know what adjectives I'd come up with for anything more than 2%.

**Well it was. My student loans pay down the balance and forwards the due date. My next due dates are in June and September.

Gift Dilema

I effectively moved out of the house when I went away to college. Since then, at any gift giving venture, my mom tends to transfer money into my bank account for presents. Usually it's accompanied with something like "I put X in your account. Use X for your birthday present and X for you to get you hair/nails done. Use the rest to take Gameboy out to dinner." She uses this method because we live across the country from each other. She'd prefer that I get money she would have used to ship things. When it comes to technical items she knows she doesn't know much and would rather I get something that meets my specifications.

Within 8 months this happened three times for graduation, Christmas, and birthday. I've used the money for my hair to get it done. The nail money goes towards debts. And some of the rest goes to lunch or dinner out. The problem is the actual present money. Before my birthday she asked what I wanted and I let her know it was a digital camera. Photography is a hobby of mine and I've been thinking about a digital camera for a while now. The amount of birthday money was appropriate for a nice mid range camera.

Here's the dilemma. While paying down debt it feels frivolous to spend a couple hundred on a camera. But it also feels wrong to use money she (or anyone for that matter) wanted me to spend on a specific item. The end result? Almost 1K sitting in a 'Sara's Funds' sub account on ING because I can't make a decision.

What do you think I should do?

Student Loan Check-in

One of my financial goals for the year was to pay $3000 worth of principal in addition to my monthly payments (starting in April). I'm happy to say that January went well and I'm more than 1/5th of the way to my goal for the year. Mystery shopping payment that had accumulated in PayPal, some Xmas money, a few other mystery shopping checks, and snowflaking helped get me there. Seeing the numbers go down after each payment was seriously addictive.

What is even better is the amount of interest I paid off at the same time. Until Tuesday my account was in a grace period. All payments made during this time were applied first to interest and then principal. So in order to get to pay off $632.42 in principal I had to pay off all of the accrued interest. In January I made a total of 1435.02 in payments.

The part of this I'm loving the most is that my bill has dropped $15/month. I'm still going to pay the original amount I was quoted. It's built into my budget and will help me get a little closer to my goal each month. The only thing I regret was not getting some of that money in before the New Year. Student loan interest is tax deductable so any bit that I'd paid last year would reduce my 2007 tax liability. But you live and learn and I'll take what I've done so far.

Between now and December the remaining goal is 2367.58. I'll post another update next month.