Prosper Personal Loans – 2018 Comprehensive Review for Borrowers

Prosper: It’s a great name for a loan company, because don’t we all strive to prosper? The company itself is certainly prospering. As the first online lending marketplace in the United States, Prosper is disrupting the way lending works, and giving banks a scare in the process.

Prosper is a marketplace lending platform, meaning it matches borrowers with people who want to lend money as an investment. Prosper doesn’t provide the money; it provides the connections and facilitates the servicing of the loans.

So far, Prosper has facilitated over $10 billion in loans. Let’s take a deeper look at the company to see if it’s right for you.

Credit requirements to borrow from Prosper

The minimum FICO score to be approved for a personal loan from Prosper is 640. However, Vice President of Communications Sarah Cain says your FICO score isn’t the final word.

“It is one of many factors that goes into making a credit decision including things like income and debt-to-income ratio,” she explains. “When you apply for a loan through Prosper, we look at your personal credit profile and then assign you a rating, which determines the rate you are offered.”

Prosper is geared toward borrowers with high credit scores. And the better your credit history and score, the better interest rate you’ll receive on your loan.

Loan terms

Cain says the primary appeal of Prosper is that the company offers fixed-rate, fixed-term loans with no pre-payment penalty. This means that, when people take out a loan, they know exactly what the monthly payment will be for the life of the loan and how long it will take to pay it off.

Loan amount: Prosper loans range from $2,000 to $35,000

Interest rates: Your rate will vary depending on your creditworthiness. Check here for current rates.

Fees: Prosper charges an origination fee between 1% and 5% of the total loan amount. The fee is deducted from the loan right at the beginning.

Loan duration: Three to five years.

Funding time: If approved, the loan will be directly deposited into your account in one to three business days.

Ideal for loan consolidation

Cain says, “One of most popular ways people use a loan through Prosper is to consolidate other high-interest debt. Prosper can also offer borrowers access to a lower rate, and having just one bill to pay vs. many often makes finances feel much more manageable.”

If you have a high credit score, decent income, and a strong credit history, you can get a low interest rate on a loan as high as $35,000. The low rate and high loan amount makes Prosper a good place to consolidate loans and pay them off in a set amount of time.

Because there is no prepayment penalty, you are able to pay off your loan as quickly as possible. And the sooner you pay off your loan, the less interest you’ll end up paying.

PROS & CONS

Some of the pros and cons associated with Prosper.

Pros
  • Low interest rates for good credit
  • Both low and high loan amounts available
  • Money is funded quickly and directly into your account
  • Great option for consolidating high interest loans
  • Set term and interest rate offer stability
  • Easy application process
Cons
  • High credit score required to be approved and to get a good interest rate
  • Origination fee can be high: For example, if you borrow $10,000 you could be charged a 5% origination fee of $500.
  • Charged interest on the origination fee: Using the examples above, when your loan is funded, the fee is deducted upfront, making your total loan amount $9,500. However, you’ll be charged interest on the entire $10,000.
  • No flexibility: Unlike some lenders, you aren’t able to adjust the terms of your loan with Prosper.

Prosper vs. Lending Club

LendingClub is the other big peer-to-peer lender on the market. Prosper and LendingClub are similar in many ways, but there are two key differences.

  1. LendingClub offers joint loans: This means you can apply with a co-lender, such as a spouse, to improve your chance of approval. Prosper doesn’t offer this at present.
  2. Prosper’s origination fee is lower: LendingClub’s fee goes up to 6%. The fee for Prosper only goes up to 5%.

Prosper’s application process

  1. Fill in your desired loan amount, purpose, and credit score.

  2. Next, you are asked to create an account and fill in some personal information, including where you live, your income, and employment status.

  3. If you are approved, loan terms are offered. You will see an interest rate and monthly payment.

If you’re not approved, you’re blocked from applying again for 30 days.

No social security number is entered until you see whether or not you have been approved. Once you see the loan’s terms, you are asked for your social security number.

You are not obligated to accept the loan once you get this far. If you do, however, Prosper will then do a hard pull on your credit and you will see an inquiry for this loan on your credit report.

Do your research!

Before signing up for a loan through Prosper, it’s always a good idea to find out what other personal lenders can offer you first.

Check out SuperMoney's personalized loan offer engine to see what rates you qualify for. Then, head over to our personal loan page for detailed reviews and comparisons.

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