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 lesave money on interest.nd 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.

 

 

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

Best Egg

 

With BestEgg, you can borrow anywhere from $3,000 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

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

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.