Prosper, one of the largest peer-to-peer lending marketplaces in the United States, provides customers who have good credit with a fast way to borrow money at low fixed interest rates. The company is based in San Francisco, California, has more than 2.2 million members and has furnished over $2 billion in loans.
How Does It Work?
As a peer-to-peer lending platform, it uses crowdsourcing to connect borrowers with individual investors who have access to the credit scores, ratings and histories of borrowers. Investors may also decide who to lend money to based on the profile descriptions of borrowers, community affiliations and endorsements from friends.
What Are The Interest Rates and Fees?
The P2P business model reduces transaction costs and interest rates, as well as allowing loans to get processed at speeds traditional banks can't even begin to match. Prosper generates income by charging borrowers a one-time fee for every loan and an annual loan fee to investors.
What About Documents & Process?
Prosper loans do not require any type of collateral and you can use the money for practically any purpose: including debt consolidation, an auto loan or a short term bridge loan. There are no prepayment penalties so the sooner you pay off the loan the less interest you will pay. If you provide all the required information and documentation you can expect to receive a reply to your application within two to four days.
What Are The Eligibility Criteria?
If your credit score is above 640, you can apply for loans ranging from $2,000 to $35,000. However, borrowers with lower credit scores may only qualify for smaller loans and will pay higher interest rates. Borrowers may request loan terms of up to 5 years, but the longer the loan terms the higher interest.
Prosper as an Investment
If you are interested in becoming a peer-to-peer lender, Prosper is a particularly good choice. Depending on your risk tolerance, you can make anything from 5% to 10% interest on your savings, which is considerably higher than the 4% to 5% offered by Lending Club.
Is Prosper Personal Loans Better Than Others?
Prosper provides borrowers with an attractive alternative to conventional banks and credit cards. The interest rates are competitive, the approval rates are fast and the money is directly deposited in your account. Interest is based on the current loan balance, so there is no penalty for paying the loan early.