I set up a Prosper loan to fund a new air conditioning a couple of days ago. I got this note from Tom, who writes the Prosper Lending Review blog:

I just checked out your loan. I’m a Prosper lender (and blogger). It’s too bad you live in VA which has a rate cap on loans. The average interest rate for C borrowers for a loan under $5K is 16.6%. Even though you are a “clean C” I think it will be tough to get funded at that rate. I hope it works for you. Good luck!

To see said loan, check it out here:

Okay, so this process killed me. I went to all the trouble to setup a Prosper account - verify this - authorize that - certify those - then spent sometime crafting a request for a loan. I can’t remember exactly where in the process this question is asked, but they finally ask what interest rate you would like to shoot for. I had about 20% in my mind, because I figured I am sitting here sweating like a pig and want to get a new air conditioning ASAP. I had researched and saw that 16% was the average for those with a C credit rating - I figured 20% would be a NO BRAINER, right? Well, guess what - I live in Virginia and Virginia has decided that (to protect me from MYSELF) I cannot get a loan with an interest rate greater than 11%. Eleven percent. You have got to be kidding me. Well, by that time I had invested enough time that creating the loan request was costing me absolutely nothing additional in time nor money.

That was about 3 days ago. So, on a $5000 loan I have 2 bidders for $50 each. Yes, a total of $100 has been committed to my loan. Not because I won’t accept a 20% rate, but because Virginia won’t allow me to accept a 20% rate. Thank goodness Virginia is here to save me from this predator known as Prosper. Instead, I sit here without a loan still sweating at 9:00 PM with an 80% humidity and 85 degrees in the house. Again - thank you Virginia.

Fund my loan and make a sweet 11% on your money!