LendingClub vs. Prosper Review: Here’s What You Need to Know

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In recent years, there’s been rising interest in peer-to-peer (P2P) lending. A report from Research and Markets estimates that P2P lending could grow by 53.06% between 2016 and 2020, while Transparency Market Research projects that the global P2P market will be worth $897.85 billion by 2024.

Two well-known players in the P2P lending space are LendingClub and Prosper. How do these two companies compare for borrowers who are looking for personal loans?

Figuring out what works best for you can help you get the best deal. Here’s what you need to know about LendingClub versus Prosper.

How P2P lending works

Here’s how P2P lending works typically:

  • You fill out an application on the lender’s website.
  • Your credit and other information are used to assign you a “grade.”
  • Investors on the site (regular people, or your “peers”) will decide whether to fund your loan, usually in $25 increments.
  • If enough investors commit funds to your loan, and it’s fully funded, you receive the money.

According to Joseph Hogue, a chartered financial analyst and P2P lending expert at financial education website PeerFinance101, the LendingClub-versus-Prosper cage match isn’t a thrilling one.

“In many ways, these companies are a lot alike,” Hogue said. “They both work essentially the same way to get loans to borrowers.”

The process is similar on both websites, though there are slight differences in how you apply for your loan, said Hogue.

“No matter which website you go through, you’ll rely on other people to fund your loan,” said Hogue. “You’ll have a chance to make a statement, so share your story so potential lenders know you’re sincere and likely to repay the loan.”

LendingClub vs. Prosper: What’s different?

The differences between LendingClub and Prosper are in the small details, Hogue said.

See the chart below for a comparison of some details of the unsecured personal loans from the two companies, as of April 19, 2018. For the latest fees and rates, go to LendingClub or Prosper.

Lending Club Prosper
Loan amount $1,000 – $40,000 $2,000 – $35,000
APR range 6.16% – 35.89% 5.99% – 35.99%
Term length 3 – 5 years 3 – 5 years
Origination fees 1% – 6% 1% – 5%
Minimum credit score 640 640
Maximum debt-to-income (DTI) ratio 40% 50%
Good for debt consolidation? Yes Yes
Allows co-borrowers? Yes No

There’s not much difference between the interest rates offered by the two companies. Hogue said that, in his experience, LendingClub personal loans often offer lower rates than Prosper.

“It’s also slightly easier to get a loan with LendingClub,” Hogue said. “Even though the minimum credit scores are similar, in my experience, LendingClub is a little more flexible about credit requirements overall. On the other hand, though, Prosper accepts borrowers with a higher debt-to-income ratio.”

Plus, LendingClub allows you to borrow up to $40,000, while the limit with Prosper is $35,000.

LendingClub lets you have a co-borrower, while Prosper requires you to carry the loan entirely on your own. “If you aren’t sure that you can cut it without someone else’s help, LendingClub can be a good choice,” said Hogue.

Hogue recommended getting a rate quote from both LendingClub and Prosper to compare rates and terms. Since both companies use soft credit pulls to determine your rate, you don’t have to worry about it negatively impacting your credit as you comparison shop.

How to apply for a LendingClub loan

lendingclub vs. prosper rate check

Image credit: LendingClub

LendingClub takes you through a simple, step-by-step process to find a rate quote. You answer questions about the amount you want to borrow, your credit score range, and how you plan to use the money.

You also inform whether you’re borrowing on your own or with a co-borrower. Then you answer basic questions about your:

  • Birthdate
  • Annual income
  • Name
  • Address

Finally, you enter your email address, set up a password, and get your rate. Each item is on its own page, but it gets you through the process quickly. I was able to fill in my information and receive a quote in less than three minutes.

lendingclub vs. prosper application

Image credit: LendingClub

If your credit doesn’t match LendingClub’s requirements, you have the option to find a co-borrower and add that person’s information, thereby increasing your chances of getting a loan.

Once you have a rate quote, you’ll be asked to provide documentation and the terms will be finalized. Then your loan request goes live on the LendingClub website and lenders can decide if they will help fund your loan.

How to apply for a Prosper loan

lendingclub vs prosper rate check

Image credit: Prosper

Like LendingClub, Prosper makes it simple to get a rate check. However, rather than going through multiple pages on Prosper’s website, you fill out all the required information on one page, although Prosper asks for a little more initially than LendingClub.

You need to enter some basic information:

  • Amount of the loan you’re requesting
  • Name
  • Birthdate
  • Address
  • Monthly housing payment
  • Employment status
  • Income

You’re required to provide an email address and password to set up an account. Again, the whole process of filling the form and getting a rate quote took me less than three minutes.

lendingclub vs prosper application

Image credit: Prosper

If you don’t qualify for a Prosper personal loan offer, the company refers you to AmOne, which specializes in debt consolidation and personal loans for people with fair to poor credit.

When LendingClub might be a good choice for you

A loan from LendingClub might be a better choice if:

  • You have a lower DTI ratio.
  • You need a co-borrower to help you qualify for a loan.
  • You want a business loan.

“Yes, you can use your money from Prosper to fund a small business and do most of the things you can do with LendingClub,” said Hogue. “However, in my experience, LendingClub is better at catering to people who have more diverse needs beyond debt consolidation, like starting a business or refinancing an auto loan.”

LendingClub requires that you have at least three years of credit history. However, if you don’t meet the minimum credit requirements due to a low score or thin credit file, a co-borrower can help. The DTI requirement is slightly more stringent for a loan with a co-borrower — your combined DTI needs to be less than 35%.

When Prosper might be a good choice for you

A loan from Prosper might be a better choice if:

  • You carry a higher debt balance.

Even though Prosper’s borrowing limit is lower than that of LendingClub and the minimum scores required by both companies are the same, you might be able to get a better deal with Prosper if you a higher debt balance, Hogue said.

LendingClub will consider your application if your total debt payments amount to less than 40% of your income, while Prosper will do it as long as your monthly obligations don’t take up more than 50% of your income.

LendingClub vs. Prosper: Shop for the best personal loan

Do your research to see what works best for your situation. Hogue suggested applying on both lender websites to compare rates.

It’s not just about LendingClub versus Prosper when it comes to personal loans. P2P lending can be a great way to find borrowing opportunities not offered by banks, but it’s not the only option. Hogue recommended getting quotes from other personal lenders, as well as from P2P lenders.

“Just like anything else, you’re going to get a better deal when you shop around,” said Hogue. “Check out Prosper, LendingClub, and more traditional lenders to see where you get the lowest rate and the terms that best fit your situation.”

Note: Student Loan Hero has independently collected the above information related to rates and terms for unsecured personal loans. None of the companies mentioned have provided or reviewed the information shared in this review.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderAPR RangeLoan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal Loans: Fixed rates from 6.990% APR to 14.865% APR (with AutoPay). Variable rates from 6.255% APR to 12.555% APR (with AutoPay). SoFi rate ranges are current as of September 1, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.255% APR assumes current index rate derived from the 1-month LIBOR of 2.08% plus 4.425% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

    To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.See Consumer Licenses.
  2. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  3. SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.
  4. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

3 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 4.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 4.99% APR loan, a borrower will need excellent credit on a loan of $15,000 with a term of 24 months, and qualify for at least two of the following discounts: (1) add a co-borrower who has sufficient income; (2) use at least fifty percent of the loan proceeds to directly pay off existing debt; or (3) show proof of having at least forty-thousand dollars in retirement savings – contact FreedomPlus for further details.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

5 Important Disclosures for LendingPoint.

LendingPoint Disclosures

  • Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint’s final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 15.49% APR to a high of 34.49% APR, with terms from 24 to 48 months. The loan offer(s) shown reflect a 28 day payment cycle which is being offered as a courtesy as many of our customers are paid on a biweekly schedule and thus this may better align the loan payment dates with your actual income receipt schedule.

6 Important Disclosures for LendingClub.

LendingClub Disclosures

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.


7 Important Disclosures for Earnest.

Earnest Disclosures

  1. Earnest does not lend in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

8 Important Disclosures for Avant.

Avant Disclosures

* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.

** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33


* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

7.73% – 29.99%$1,000 - $50,000Visit Upstart
6.26% – 14.87%1$5,000 - $100,000Visit SoFi
6.99% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%2$5,000 - $35,000Visit Payoff
4.99% – 29.99%3$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%4$5,000 - $50,000Visit Citizens
15.49% – 34.49%5$2,000 - $25,000Visit LendingPoint
6.16% – 35.89%6$1,000 - $40,000Visit LendingClub
6.99% – 18.24%7$5,000 - $75,000Visit Earnest
9.95% – 35.99%8$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.