Prosper Personal Loan Review

Elizabeth Aldrich

Updated on March 1, 2019

March 1, 2019March 1, 2019Featured1822Elizabeth Aldrich

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

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What is Prosper?

As the first peer-to-peer lending marketplace in the United States, Prosper is a pioneer in the finance arena. Founded in 2005, it has offered more than $14 billion in affordable financing to over 870,000 borrowers while giving investors new ways to earn steady returns. Prosper loans fund a wide range of short-term financing needs, including debt consolidation. It even plans to add home equity lines of credit to its list of products in 2019.

While Prosper’s marketplace helps borrowers connect with investors who are willing to lend them money, its loans are originated by WebBank. Prosper has an A-plus rating with the Better Business Bureau, and WebBank is a Federal Deposit Insurance Corp.-insured financial institution.

In this Prosper review, we’ll cover some of the main features of the peer to peer personal loans offered on Prosper’s website. We also include details for alternative personal loan options so that you can compare lenders and make sure you’re getting the best rates and lowest fees.

Personal loan highlights

Low interest rates: The APR ranges aren’t the lowest out there — 6.95% to 35.99% — but it’s close. The most creditworthy borrowers will qualify for rates that are affordable.
Flexible loans: This marketplace offers a wide range of loan amounts, whether you’re looking to borrow a little or a lot. You can also choose between two different repayment terms according to your needs.
No prepayment fees: You can pay off your loan at any point without penalty. If you do finish paying your loan before your term is up, you’ll save money on interest.
Minimum credit requirement: 640
Terms: 36 or 60 months
Fees: 2.41% - 5.00% origination fee

Personal Loan Details

Terms	Fees and Penalties
Term lengths: 36 or 60 months APR range: 6.95% – 35.99% Loan amounts: $2,000 – $40,000 Time to funding: Within 5 days of accepting a loan offer on average Credit check: Soft Pull	Origination fee: 2.41% - 5.00% Prepayment fee: None Late payment fee: 5% of the amount unpaid or $15, whichever is greater Other fees: The lesser of $5 or 5% for check processing, $15 for insufficient funds

Prosper product details

As a peer-to-peer marketplace lending platform, there are a variety of loan types that are tailored to your individual needs, whether you’re looking to borrow $2,000 or $40,000. Once you list your loan needs on its marketplace, different individual and institutional investors can choose to contribute to your loan until it’s fully funded.

The personal loans can be used for home improvement, baby and adoption expenses, engagement rings and many other short-term needs. There are also consolidation loans for customers who are looking to pay off high interest credit card debt at a lower rate. But you can’t use the loans to pay for any college expenses, which include tuition, books, supplies and room and board.

Prosper highlights loans designed to finance medical procedures through its subsidiary platform, Prosper Healthcare Lending. These loans are available to borrowers with a credit score of at least 640. They range from $2,000 to $40,000 and come with similar rates. If you have a credit score of 740 or above, you can qualify for its “Exceptional” medical loans, which go up to $100,000 and offer lower interest rates. Prosper Healthcare Lending services customers looking to finance cosmetic and plastic surgery, fertility and reproductive treatments, cosmetic dental procedures and bariatric surgery. Keep in mind that health care financing must be applied for through an enrolled provider.

Eligibility requirements

Minimum credit score: 640
Minimum credit history: You must have at least three open trades on your credit report, fewer than five inquiries in the past six months and no bankruptcies filed in the past 12 months
Maximum debt-to-income ratio: 50%

To apply for a loan through Prosper, you must be a U.S. resident who is at least 18 with a bank account and a Social Security number. You don’t have to have perfect credit to qualify for the loans offered through Prosper, but Prosper will pull your credit report from TransUnion and use it in the decision-making process.

More specifically, Prosper looks for applicants who have a regular source of income and a debt-to-income ratio that’s below 50%. It also requires that you have at least three open trades — these can be installment loans or credit cards — on your credit report, fewer than five inquiries in the past six months, and no bankruptcies filed in the past 12 months. Remember that these are the minimum criteria to qualify for the loans offered through Prosper, so meeting them does not guarantee approval.

If you are a repeat borrower, Prosper will also check to make sure that your previous loans with Prosper were never charged off. Finally, you are not eligible if you’ve been declined by Prosper in the past four months due to delinquency or returned payments on your previous Prosper loans.

Applying for a personal loan through Prosper

Check your rates. You can check your rates on Prosper’s website to get a sense of the loans that might be available to you. It won’t impact your credit score.

Create a listing. If you’re satisfied with your potential loan options, you can follow through with your application and create a listing on Prosper’s lending marketplace. Once your listing is live, investors have 14 days to match with you. You can log in to your account to check the status of your application and see what percentage of your requested funds has been met by investors. If your listing ends without being funded, you can always create a new one.

Verify your information. Throughout the listing process, you may be asked to verify some of the information in your Prosper loan application. You might be asked to upload documents that verify your income, and Prosper may call your bank or employer as well. This verification process is usually completed within seven days.

Get your funds. If your loan listing matches with sufficient investors to meet your funding requirements, your loan will be originated. Once this happens, it usually takes one to three business days for the funds to appear in your bank account.

Pros and Cons of a Personal Loan through Prosper

Pros

Cons

Loan types: By going through a peer-to-peer platform, borrowers may have access to loans for a wider range of purposes.
Affordable: The loans offer low rates to the most creditworthy borrowers.
Small and big loans: You can borrow anywhere from $2,000 to $40,000, which allows you to avoid borrowing more than you need while still covering your foreseen expenses.
No prepayment penalty: This means you can repay your loan early to avoid interest without incurring any fees.

Loan fees: Even though Prosper doesn’t charge prepayment penalties, it does charge origination fees, check processing fees and late fees.
Wide APR range: If you’re offered a loan with an APR on the higher end of Prosper’s stated range, it will end up costing you quite a bit in interest. These higher interest loans should be avoided if possible.
Credit history requirements: Borrowers might have better luck with Prosper than with a traditional lender, but Prosper does still require that you keep a debt-to-income ratio below 50% and don’t have any recent bankruptcies or too many recent inquiries.

Who’s the best fit for a personal loan offered through Prosper?

If you’re looking for the best rates on personal loans, you should consider the loans offered through Prosper. Its lowest available rates are very competitive, and there are no prepayment penalties. That being said, Prosper’s origination fee is a little higher than what’s charged by other lenders, so keep that in mind when comparing rates.

Because Prosper is a peer-to-peer lending service that offers a wide variety of loan types, it could be a good fit for all kinds of borrowers. Whether you’re looking to make improvements on your home, finance a major purchase or go on a vacation, the loans offered through Prosper could help you. It even offers loans for certain medical procedures. It’s wise to consider the cost of your loan over time before making a commitment and stick to using personal loans as a last resort, as debt can be expensive even with low interest rates.

If you have existing debt that you’re paying off at high interest rates — particularly credit card debt — Prosper also offers debt consolidation loans that can help you repay your debt faster and save money on interest. When deciding whether to consolidate your debt, you’ll want to compare loan rates along with any fees associated with taking out a loan to repay your existing debt to make sure it’s worth it.

Alternative personal loan options

BestEgg

APR: 5.99% – 29.99%
Credit requirements: 700 minimum credit score
Terms: 36 or 60 months
Origination fee: 0.99% - 5.99%

With BestEgg, you can borrow anywhere from $2,000 to $35,000. It does have a higher credit score requirement than some other lenders, but its loans come with affordable interest rates. The loan process is also extremely fast, with about half of BestEgg loan customers receiving their funds the next day.

SoFi

APR: 5.99% – 16.34%
Credit requirements: 680 minimum credit score
Terms: 24 to 84 months
Origination fee: No origination fee

SoFi offers some of the lowest rates on the market with highly flexible loan terms. Whether you’re looking for short-term loans you can pay off quickly, or for manageable monthly payments stretched out over a longer period, SoFi can help. You can also borrow anywhere from $5,000 to $100,000.

Affinity Federal Credit Union

APR: As low as 9.75%
Credit requirements: 525 minimum credit score
Terms: Up to 60 months
Origination fee: No origination fee

While Affinity Federal Credit Union doesn’t offer the lowest rates on personal loans, its rates are still reasonable. It also offers loan access to a wider range of borrowers given their low credit score requirement. Joining Affinity Federal Credit Union is fairly easy as most people will qualify for membership.

Interested in a personal loan?

Lendingtree allows you to compare rates from multiple lenders by filling out one easy form.

Lender	RATES (APR)	loan amount
	5.75% – 16.24%¹	$5,000 to $100,000
	7.46% – 35.99%	$1,000 to $50,000
	7.99% – 35.89%^*	$1,000 to $50,000
	5.99% – 24.99%³	$5,000 to $35,000
	5.99% – 29.99%⁴	$7,500 to $40,000
	6.79% – 20.89%	$5,000 to $50,000
compare rates on Lendingtree now Disclaimer: Student Loan Hero is a subsidiary of LendingTree
¹ Includes AutoPay discount. Important Disclosures for SoFi. SoFi Disclosures Fixed rates from 5.990% APR to 16.240% APR (with AutoPay). Variable rates from 5.75% APR to 14.60% APR (with AutoPay). SoFi rate ranges are current as of March 18, 2019 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 5.75% APR assumes current 1-month LIBOR rate of 2.50% plus 4.28% 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. 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. 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. If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment. If the loan is co-signed the unemployment protection applies where both the borrower and cosigner lose their job and meet conditions. 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) ³ Includes AutoPay discount. Important Disclosures for Payoff. Payoff Disclosures 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. ⁴ Important Disclosures for FreedomPlus. FreedomPlus Disclosures 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 5.99% 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 5.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $12,000.00, and with a term equal to 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you also qualify for the lowest rate available. ^* 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. Important Disclosures for Citizen. Citizens Bank Disclosures Personal Loan Rate Disclosure: Fixed interest rates from 6.79% – 20.89% (6.79% – 20.89% 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. 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. 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.

Prosper Personal Loan Review

Elizabeth Aldrich

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What is Prosper?