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Prosper Personal Loans Review

Len Penzo
Len Penzo
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LOAN TERM
From 3 to 5 years
EST. APR
6.95% - 35.99%
LOAN AMOUNT
$2,000 - $40,000
MIN. CREDIT SCORE
640

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    Originally founded in 2005, California-based Prosper holds the claim of the first online peer-to-peer lending marketplace in the US. The company connects both borrowers and investors and matches the former’s requirements for funding and terms with the latter’s risk preferences and investment philosophies. While the company doesn’t personally originate loans, it does handle the servicing of every loan, as well as the matchmaking itself, removing any need for trust between borrowers and investors. 

    Today, Prosper has over a decade of experience in the field, and it has facilitated over $12 billion in personal loans to over 770,000 borrowers in the US. The company’s fixed rate, low interest loans are available thanks to Prosper’s unique matching system and its approval process, which is slightly stricter but also more democratic. With excellent customer service and an intriguing lending model, Prosper is a great choice if you’re looking to circumvent banks and traditional lending options. 

    Prosper homepage

    Prosper Pros and Cons

    Pros: 

    • Find out your available rates without affecting your credit score 
    • Pay your loans as soon as you’re able with no prepayment penalties 
    • Get funded as quickly as one business day
    • Keep track of your loan on your mobile device

    Cons: 

    • Origination fees are higher than some competitors
    • Eligibility requirements are on the stricter side

    Why Get a Personal Loan from Prosper? 

    The most intriguing aspect of a Prosper personal loan is that it is peer-funded, meaning that your loan isn’t originated from banks, but rather investors who can bid on your loan if it fits your portfolio. This slows down the funding process as your loan may not be immediately bid on, but it does mean that you have a greater chance to get favorable rates on your loan. This also means that eligibility requirements are slightly higher to mitigate investors’ risk when originating a loan. 

    Additionally, the company’s lending model means that your application includes more than just your basic financials to give investors a better idea of your risk profile. As a result, you may have better luck finding a loan even if your credit is not at an optimal level due to unavoidable circumstances or problems outside your control. It also may mean that if your other financials are in order, you may still get your loan. 

    Finally, we were happy to see that Prosper reviews are overwhelmingly positive, and that customers seem to be very satisfied with the company’s service and offerings. 

    What Does Prosper Offer? 

    When  it comes to the actual product, Prosper offers quick and transparent personal loans for users with good to excellent credit. The company’s lending model means that borrowers with lower credit can still get funded—although it requires an investor with a higher risk appetite—but its more stringent standards mean that it can offer more favorable interest rates and terms. 

    Additionally, the company’s mobile app lets you easily track your outstanding loans, as well as keep tabs on your spending and overall finances in one convenient location. You can use a Prosper loan for the following purposes: 

    • Debt consolidation 
    • Home improvement 
    • Major purchases
    • Auto or motor purchases 
    • Medical or dental expenses

    You can also explain the purpose of your loan in your application, lending to some different available options. 

    What Are Prosper’s Eligibility Requirements? 

    Due to its peer-to-peer nature, Prosper has slightly stricter eligibility requirements than some competitors, although it does also lend some flexibility to the process. The company has a minimum credit score requirement of 640, though most borrowers average 700+. Additionally, having an extensive credit history is recommended, as well as a maximum debt-to-income ratio of 50%, excluding mortgages. You also need to have a stated income greater than $0, as well as no bankruptcies within the 12 months before applying for a loan. Finally, Prosper requires that you have fewer than five credit inquiries in the six months prior to your application, as well as a minimum of three open trades reported on your credit report. 

    How to Apply for A Prosper Personal Loan? 

    The first step in getting your Prosper personal loan rates is to fill out a quick questionnaire. This includes some questions about your personal details, as well as a quick overview of your financial health. Once you’ve completed this step, you’ll be able to see the different terms and alternatives available to you. Once you’ve chosen your loan, you’ll be subjected to a hard credit check, and you’ll receive a letter grade for your loan (AA, A, B, C, D, E, or HR for “High Risk”). A higher letter usually means you’ll have higher interest rates and less favorable terms. Once your loan is approved and posted, anyone can choose to invest in it, and your funds will be transferred to your account. 

    Online application form prosper

    What are Prosper’s Rates, Terms, and Fees? 

    Our Prosper personal loan reviews revealed that the company offers some of the more competitive rates on the market. The lowest available Prosper loan rates start at 6.95% APR and can reach up to 35.99%. The higher your grade (AA being the highest) the lower interest rates you’ll have access to. Loan amounts start at a minimum of $2,000, though you can apply for up to $40,000. The peer-to-peer model also means that you have greater flexibility when it comes to choosing loan amounts and the interest rates available for each. 

    You can choose to repay your loan either in three or five years, though you can’t change your payment schedule once you’ve locked it in at the start of your loan. The company doesn’t charge any prepayment fees, so you’re free to pay off your loan as soon as you’re able. However, Prosper does include an origination fee that ranges between 2.4% and 5.0%, as well as a late fee (the greater of $15 or 5.0% of the unpaid amount), as well as a $15 fee for insufficient funds. 

    Final Thoughts

    Prosper is a great alternative if you’re financially stable but prefer not to go through traditional channels to get a loan. The company’s peer-to-peer lending marketplace gives you greater flexibility and allows Prosper to offer some of the more competitive interest rates and loan options in the industry. With a great app to help you track your loans and finances, as well as an easy way to apply and get approved, Prosper ranks near the top of the pack when it comes to personal loans.

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