United Will Give You Miles if You Borrow Money to Fund Your Vacation, Because That’s a Good Idea..

Chase used to be offer tons of miles for mortgages, people used to refinance or take out seconds on their home and immediately pay them off. They might earn 100,000 miles at a cost of under $200 and a whole lot of time on paperwork.

But unsecured loans probably aren’t something you should do for the miles no matter what marketing emails you receive in your inbox.

Prosper offers affiliate links, they’d happily pay referral fees to any blogger that wanted to advocate you borrow money from them. I do not have links from them, because I think this is a Very. Bad. Idea.

And it’s not any better of an idea when you get United miles for doing so.

Look, I’m a defender of the payday loan industry because I think that people do need to borrow money sometimes to fix their cars to be able to go to work, or to cover emergency health care bills for their kids. People still need to borrow the money, and if you foreclose one option they’ll have to choose what would otherwise have been the next worse option. And I believe that people ought to be permitted to make their own choices.

And I think The Onion makes the point better than I ever could about high interest financial products actually providing a service to people even though of course if that’s the road you’re going down the mileage game is not for you.

So if you want to borrow money, and you want to borrow money from Prosper by all means go ahead. But don’t let MileagePlus convince you do to do!

(HT: Joel G.)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Hi Gary,

    Quick question: I entered the Al Maha giveaway, however, it seems that all the comments from yesterday have been removed. Just wanted to make sure my entry is still valid. Please let me know.

    Thanks in advance.

  2. Any way to game the loan? Like take the loan, get the miles, pay off loan in full after paying only a small amount of interest?

  3. I looked at doing this and then paying it off right away, but the origination fees are in the low four digits! Hardly a good deal for the miles…

  4. Yeah, I’m guessing the first month fees + interest alone would be equal to buying 35k miles outright from United. Plus it’s a hard inquiry on your CR.

  5. I used to be a lender on Prosper like 10 years ago (wow, time flies.) As a lender, I’d be pretty pissed at borrowers who pay back right away — I wouldn’t mind so much if lenders kept the origination fee, but Prosper does.

    With the origination fees you have to pay, *at best* you’d be buying miles for 2 cpm.

  6. @Gary – If you’re going to get the Prosper loan anyway, getting the miles certainly doesn’t hurt! However, Lending Club generally has better rates (presumably b/c they don’t offer the same referral rates). And for some borrowers other lenders can offer even better terms (LendingTree is great for comparing offers).

    Also worth noting that Spirit has had a similar offer for the last year or two, at a minimum. The only thing new here is UA catching up to a LCC on their somewhat sleazy offers.

  7. Prosper isn’t as bad as many other loan outlets but they do charge a lot up front for the loan so it wouldn’t be worth it normally.

  8. The loan doesn’t have to be for a vacation – most peer-to-peer loans from Prosper or LendingClub are for debt consolidation, paying off credit cards, etc – which is actually a good thing and cheaper than credit card interest or a regular bank loan. Comparing p2p with the payday loan sharks is unwarranted!
    I wouldn’t recommend to take out a loan for the points – but if you want to pay off your credit card debt and your rate from Prosper isn’t worse than LendingClub, you might as well get some points in the process!

  9. @Rupert, good point, but no one reading THIS blog should be running any debt other than their mortgage (and maybe a car note). This game is for people that are basically debt-free. It makes no sense at all if you are going to carry a balance on a cc.

  10. @mbh, completely agreed – you shouldn’t “play the points game” if you carry a balance.
    Not every UA MileagePlus member is playing the game though – and I’m sure plenty of UA travelers have credit card debt, making them a target audience for this offer!
    Consolidating your credit card debt and paying it off completely would be the right step before starting the mileage game – so I’d encourage people to use P2P lenders to pay off credit card debt, rather than dismissing it as something akin to a payday loan!.

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