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| What should I do if a borrower is late on a monthly payment? |
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Don't panic just yet. Sometimes people are just late. Prosper sends
frequent emails to overdue borrowers and their group leaders (if they
are members of a group), prompting them to pay their monthly payment as
soon as possible.
Once the borrower is more than 15 days late, the borrower will be charged a late fee, which depends on the state lending limits in the borrower's state of residence. The late fee is divided up pro-rata among the borrower's lenders.
Once the loan is one month past due, it is turned over to a
collection agency to pursue collection from the borrower. If the
collection agency cannot collect payment from the borrower after a
reasonable period of time (within 3 months), the loan will be
considered uncollectable, and written off as a loss. The status of the
loan will change to "Written off." See below for more on the next
steps. The borrower will not be able to borrow ever again from Prosper,
and since we report delinquencies to credit reporting agencies, this
default will adversely affect their credit report.
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