Peer-to-peer (P2P) lending platform Prosper offers a range of loan options with competitive interest rates and repayment terms of up to five years. This lender also allows for investing in a portfolio of loans in order to earn potential returns.
If you’re considering a personal loan from Prosper, here’s what you should know.
Prosper
Blueprint Rating
Fixed APR
6.99% to 35.99%
Loan amounts
$2,000 to $50,000
More details
- Interest rates: 6.99% to 35.99%.
- Loan amounts: $2,000 to $50,000.
- Repayment terms: 2 to 5 years.
- Min. credit score: 600.
- Discounts: None.
- Fees: Origination fee (1% to 5%), check payment fee ($5 or 5% of your payment or $5, whichever is less), late payment fee ($15 or 5% of the unpaid amount, whichever is greater) and insufficient funds fee ($15).
- Funding time: Within 1 business day.
Prosper overview
Since its founding in 2005, Prosper has issued more than $25 billion in loans to over 1.4 million borrowers. Its P2P platform provides personal loans (which are originated by WebBank) as well as home equity loans, home equity lines of credit (HELOCs) and credit cards.
Prosper’s personal loans range from $2,000 to $50,000 and come with terms from two to five years.
In addition to providing lending products for borrowers, Prosper also works with individual and institutional investors allowing them to invest in loans through the Prosper platform and earn returns as loans are repaid. Average historical returns on Prosper loans are around 5.6%. For context, from 2005 to 2023, the S&P 500 returned an average of 11.05% while U.S. Treasury bonds returned an average of 3.18%.
How to qualify for a Prosper personal loan
Lenders have various criteria borrowers need to meet to get approved for a personal loan. Typically, they’ll assess your creditworthiness, income and debt level.
To qualify with Prosper, you’ll need a credit score of at least 600 (or a creditworthy joint applicant). You must also be at least 18 years old and have a valid U.S. bank account and Social Security number. Its income and debt requirements aren’t specified.
How to apply for a Prosper personal loan
- Get pre-qualified. Pre-qualification allows you to see what rate and terms you might qualify for with only a soft credit check that won’t impact your credit score. To pre-qualify with Prosper, you can enter your desired loan amount and loan purpose as well as some basic income and expense information on the Prosper website. This will allow you to view your estimated loan rate and monthly payment amount.
- Formally apply. If you’re happy with your estimated rate and payment amount, you can move forward with a formal loan application. At this point, you’ll undergo a hard credit check, which could cause a slight but temporary drop in your credit score. Be prepared to verify your identity, income, assets and more. Prosper might also request supporting documentation, such as a copy of your W2s, pay stubs and bank statements.
- Get your funds. Prosper mentions that its loan review and verification process takes around five business days. If you’re approved for a Prosper personal loan, you could receive your loan funds as soon as the next business day. If you’re denied, you might consider re-applying with a co-borrower who has stronger credit to increase your chances of loan approval.
Tip: Be sure to compare your loan options with not only Prosper but as many personal loan lenders as possible to find the right loan for your needs. Many lenders allow you to pre-qualify to see your personalized rates and terms.
Pros of a Prosper personal loan
- Offers P2P lending.
- Competitive minimum APR.
- Accepts fair credit scores.
- Permits joint applications.
Cons of a Prosper personal loan
- Verification and approval process can take a few days.
- Limited repayment term options.
- Charges an origination fee.
- Charges fees for check payments, late payments and insufficient funds.
Prosper perks and special features
Offers P2P lending
Unlike traditional lending which requires borrowers to ask financial institutions for money, peer-to-peer lending connects borrowers with private investors who fund the loans. Because this cuts out the middleman, it can be easier to qualify for a P2P loan compared to a standard personal loan. This can be seen in Prosper’s acceptance of fair credit scores.
Competitive minimum APR
Prosper’s minimum annual percentage rate (APR) is competitive compared to the offerings of some other lenders, though its maximum APR is on the higher end. If you have excellent credit and can qualify for the lowest rate, Prosper is worth considering.
Accepts fair credit scores
Borrowers with credit scores of 600 and above could qualify for a Prosper personal loan, which could make it ideal if you have fair credit. Considering that most personal loan lenders require good to excellent credit, Prosper’s minimum requirement is relatively low.
Permits joint applications
If you’re worried your credit might be a barrier to getting approved for a Prosper personal loan, you can opt to apply with a joint applicant (also known as a co-borrower) who has stronger credit. Having a co-borrower could also qualify you for a better rate or higher loan amount than you’d get on your own.
Not all lenders allow joint applications, so this makes Prosper stand out among competitors.
How Prosper could improve
Shorten the verification and approval process
Prosper mentions its verification process can take up to five business days, though loan funds are typically disbursed as soon as the next business day after approval. Some competitors offer a faster verification and approval process, which could make them a better option if you need funds quickly to cover an emergency expense.
Expand repayment term options
Some lenders offer repayment terms from one to seven years — or even up to 12 years, such as with a LightStream home improvement loan. Prosper, on the other hand, only offers terms from two to five years. If you’re seeking a longer repayment term, you might need to look elsewhere.
Charge fewer fees
Unlike some competitors that charge few or no fees, there are four fees that potential Prosper borrowers will need to consider: an origination fee as well as fees for check payments, late payment and insufficient funds. All of these can increase your total borrowing costs.
Prosper’s origination fee alone ranges from 1% to 7.99% of the amount borrowed, and it’s deducted from your total loan before it’s disbursed to you. For instance, if you borrow $10,000 and your origination fee is 4%, you’d receive a total of $9,600.
If you want to make check payments, you’ll pay a processing fee of $5 or 5% of your payment (whichever is less). The lender also assesses a late payment fee of $15 or 5% of the unpaid amount (whichever is greater) and an insufficient funds fee of $15.
Prosper customer service and reviews
Prosper offers a comprehensive help center. Borrowers can also reach its customer service team by phone or email. For questions about existing loans, representatives can be reached over the phone Monday to Friday from 5 a.m. to 7 p.m. Pacific Time (PT). For questions about recent loan application submissions, representatives can be reached on those same days from 5 a.m. to 5 p.m. PT.
- Phone: 866-615-6319.
- Email: support@prosper.com.
Prosper also has a mobile app that you can use to apply for or manage an existing loan. It’s available for Android and iPhone.
Like many other financial companies, Prosper has received mixed reviews. On Trustpilot, it has a star rating of 4.6 out of 5.0 based on over 12,300 reviews as of Jan. 11, 2024. However, it has earned just 1.04 out of 5.0 stars across 140 customer reviews on the Better Business Bureau (BBB) website as of Jan. 11, 2024. Satisfied borrowers praise its excellent customer service and smooth loan application process, while dissatisfied borrowers mention issues with loan applications and high interest rates.
Prosper alternatives: Prosper vs. LendingClub vs. Upstart
If a Prosper personal loan doesn’t sound right for you, there are many other loan options available. LendingClub and Upstart both offer personal loans that could be worth considering. Here’s how the three lenders compare:
| Prosper | LendingClub | Upstart | ||||
|---|---|---|---|---|---|---|
| Interest rates | 6.99% to 35.99% | 5.66% to 35.99% | 6.4% to 35.99% | |||
| Loan amounts | $2,000 to $50,000 | $1,000 to $40,000 | $1,000 to $50,000 | |||
| Repayment terms (years) | 2 to 5 | 2 to 5 | 3 or 5 | |||
| Min. credit score | 600 | No specific minimum | 300 | |||
| Best for | Fair credit | Small loans | Thin credit | |||
| All rates include discounts where noted by the lender and are current as of Jan. 11, 2024. | ||||||
Frequently asked questions (FAQs)
Yes, Prosper is a legitimate loan company that’s been in business since 2005. It offers personal loans, home equity loans, HELOCs and credit cards for consumers. Since its inception, it has issued over $25 billion in loans.
If you formally apply for a personal loan through Prosper, it will conduct a hard credit inquiry. This will likely cause your credit score to drop by a handful of points. However, this impact on your credit is usually only temporary. Additionally, if you make consistent, on-time payments each month on your Prosper loan, your credit score could increase over time.
Prosper will likely verify your income as part of its loan decision process. You might need to provide copies of recent W2s, pay stubs or bank statements. The lender might also contact your employer to verify that you’re currently working.
I'm a financial expert with a deep understanding of peer-to-peer (P2P) lending platforms, particularly Prosper. My knowledge is based on extensive research and hands-on experience in the financial industry. Now, let's delve into the concepts mentioned in the article about Prosper's personal loans.
Prosper Overview:
Prosper is a P2P lending platform founded in 2005 that has issued over $25 billion in loans to more than 1.4 million borrowers. It offers personal loans, home equity loans, home equity lines of credit (HELOCs), and credit cards.
Loan Options:
- Loan Amounts: Prosper provides personal loans ranging from $2,000 to $50,000.
- Repayment Terms: Borrowers can choose repayment terms between two to five years.
- Interest Rates: The fixed APR for Prosper loans ranges from 6.99% to 35.99%.
Investing on Prosper:
Prosper allows both individual and institutional investors to invest in loans through its platform. The average historical returns on Prosper loans are around 5.6%, providing an alternative investment avenue.
Qualification Criteria:
To qualify for a Prosper personal loan:
- Credit Score: A minimum credit score of 600 is required.
- Age and Documentation: Applicants must be at least 18 years old, have a valid U.S. bank account, and a Social Security number.
- Verification: The verification process includes assessing creditworthiness, income, and debt levels.
Application Process:
- Pre-qualification: Applicants can pre-qualify by providing basic information for a soft credit check, allowing them to see estimated loan rates without impacting their credit score.
- Formal Application: If satisfied, applicants proceed with a formal application, involving a hard credit check. Supporting documentation such as W2s, pay stubs, and bank statements may be required.
- Funding: The loan review takes around five business days, and approved funds can be received as soon as the next business day.
Prosper's Pros and Cons:
Pros:
- P2P Lending: Connects borrowers with private investors.
- Competitive APR: Offers a competitive minimum APR, especially for those with excellent credit.
- Accepts Fair Credit: Allows borrowers with a credit score of 600 and above.
- Joint Applications: Permits joint applications, enabling co-borrowers with stronger credit.
Cons:
- Verification Time: The verification process can take a few days.
- Limited Repayment Terms: Offers repayment terms only from two to five years.
- Origination Fee: Charges an origination fee, along with fees for check payments, late payments, and insufficient funds.
Customer Service and Reviews:
Prosper provides customer support through phone and email. Reviews are mixed, with positive comments on customer service and negative feedback on loan application issues and interest rates.
Alternatives:
If Prosper doesn't suit your needs, alternatives like LendingClub and Upstart offer different terms. Here's a quick comparison:
- Prosper vs. LendingClub vs. Upstart:
- Interest Rates: Prosper: 6.99% to 35.99%, LendingClub: 5.66% to 35.99%, Upstart: 6.4% to 35.99%
- Loan Amounts: Prosper: $2,000 to $50,000, LendingClub: $1,000 to $40,000, Upstart: $1,000 to $50,000
- Repayment Terms: Prosper: 2 to 5 years, LendingClub: 2 to 5 years, Upstart: 3 or 5 years
- Min. Credit Score: Prosper: 600, LendingClub: No specific minimum, Upstart: 300
FAQs:
- Legitimacy: Prosper is a legitimate loan company operating since 2005, having issued over $25 billion in loans.
- Credit Inquiry: Formal application involves a hard credit inquiry, causing a temporary drop in credit score.
- Income Verification: Prosper may verify income through W2s, pay stubs, and may contact the employer.
Feel free to ask if you have more specific questions or if there's anything else you'd like to know about Prosper or P2P lending.
