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
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.
- 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
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
- 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.
- APR: 5.99% – 16.24%
- 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 $50,000.
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?Here are the top personal loan lenders of 2019!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
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 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. 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 the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. 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. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.
†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com
**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* 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
** 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.
|5.75% – 16.24%1||$5,000 - $100,000|
|7.46% – 35.99%||$1,000 - $50,000|
|7.99% – 35.89%*||$1,000 - $50,000|
|5.99% – 24.99%2||$5,000 - $35,000|
|5.99% – 29.99%3||$7,500 - $40,000|
|6.79% – 20.89%4||$5,000 - $50,000|
|9.99% – 35.99%5||$2,000 - $25,000|
|6.95% – 35.89%6||$1,000 - $40,000|
|6.99% – 18.24%7||$5,000 - $75,000|
|9.95% – 35.99%8||$2,000 - $35,000|