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Prosper is a personal loan lender in all 50 US states.
Prosper; Alyssa Powell/Insider
The bottom line: Prosper Personal Loan is a good lender if you’re looking to apply for a joint loan or don’t have the best credit score. But with its lengthy list of fees and stringent eligibility requirements, you might get a better deal elsewhere.
Prosper personal loan amounts and interest rates
Prosper loan amounts range from $2,000 to $40,000, and the company offers loans to residents of all 50 states and Washington, DC.
You will receive an APR between Prosper Personal Loan with Prosper, depending on your creditworthiness and ability to repay the loan, among other factors. This is comparable to similar companies’ APR ranges. For instance, Avant’s APR range is Avant Personal Loans, and LendingClub’s range is Personal Loans. You can apply with a co-borrower and potentially be eligible for a lower rate if their credit score is in better shape than yours.
Pros and cons of Prosper personal loans
Pros
Ability to add a co-borrower to your account. If your credit score isn’t in the best shape, you can apply for a joint loan to get a better rate.Many ways to use your loan. Prosper allows you to use your loan funds for anything from home improvement to taxes to adoption.
Cons
High minimum and maximum APR. While comparable to some loan companies’ APR ranges, Prosper’s APR range of Prosper Personal Loan is still high. It’s more than Marcus’ range of Marcus Personal Loan.Many requirements to qualify. You’ll have to clear a significant number of hurdles to be eligible for a Prosper personal loan. This includes a minimum credit score of 640, a debt-to-income ratio below 50%, and fewer than five credit bureau inquiries (excluding duplicate inquiries) within the last six months.Prosper may not find an investor for your loan. While the company says these instances are rare, if your loan does not receive at least 70% funding from an investor after 14 days, Prosper will deny your application.
Today’s personal loan rates
How Prosper personal loans work
Prosper Personal Loan provides unsecured personal loans through WebBank (Member FDIC). You aren’t required to put up any collateral, such as a house or car, to get an unsecured personal loan. You can use a personal loan for a variety of purposes.
You can take out a loan for either three or five years. Most loans from Prosper Personal Loan are approved within one day, and depending on your bank, it may take one to three business days to receive funds in your bank account.
However, for you to get your money, a Prosper investor must choose to fund your loan. Prosper is a peer-to-peer lending company that connects borrowers and investors.
Per the company’s website, investors usually will agree to offer funding before the approval process is completed (in three days or less). But they have up to two weeks to invest in your loans. If your loan does not garner at least 70% funding after 14 days, then the company will deny your application.
You may pay multiple kinds of fees with a Prosper loan, including an origination fee, a check payment fee, a late fee, and an insufficient funds fee. That said, you don’t have to pay a prepayment fee if you pay off your loan early.
To contact customer support, call Monday through Friday, 9:00 a.m. to 8:00 p.m. ET, or on Saturday from 9:00 a.m. to 5:30 p.m. ET. You can also send an email or paper mail.
You’ll need to meet the following requirements to apply:
Be at least 18 years oldHave a checking or savings accountHave a social security numberHave at least a 640 credit scoreHave fewer than five credit bureau inquiries (after excluding duplicate inquiries) within the last six monthsEarn an annual income greater than $0Have a debt-to-income ratio of no more than 50%Have at least three open trades reported on your credit reportHave not filed for bankruptcy within the last 12 months
What credit score do you need?
You’ll need a minimum credit score of 640 to qualify for a Prosper Personal Loan personal loan. Keep in mind, the higher your credit score, the better APR you are likely to receive.
You can find your credit report for free on annualcreditreport.com from any of the three major credit bureaus weekly through April 20, 2022. While this report won’t give you your credit score, it will show you information about your credit and payment history, which lenders use to decide whether to give you a loan. Reviewing your credit report can help you know what you need to improve.
You can find your score at no cost on your credit card statement or online account. You can also pay for it from a credit reporting agency.
Your credit score won’t be affected if you check your rates through Prosper, because the process only results in a soft credit inquiry.
Once you accept an offer and officially ask for a loan from Prosper, the company will perform a hard credit inquiry, which will probably impact your credit score. A hard inquiry gives a lender a comprehensive view of your credit history, but might hurt your credit score as a result.
Is Prosper trustworthy?
Prosper Personal Loan is a Better Business Bureau-accredited company and is rated A+ by the BBB, a non-profit organization focused on consumer protection and trust. The BBB evaluates companies by measuring business’ replies to consumer complaints, honesty in advertising, and clarity about business practices.
You aren’t guaranteed to have a great relationship with Prosper even though the company has a great BBB rating. Make sure you also read reviews and talk to friends and family about their experiences with the company.
In 2019, the SEC accused Prosper of miscalculating returns and misleading investors. The SEC claimed that exaggerated annualized net returns caused investors to make more investments. In the settlement, Prosper paid $3 million.
Though Prosper has an excellent BBB rating, you may want to look elsewhere if you are turned off by the company’s 2019 controversy.
Although rates are unique to your situation, Prosper’s interest rates are in line with those offered by comparable lenders. Here’s how Prosper compares to similar companies:
*While Avant does not charge an origination fee, it does charge an administration fee of up to 4.75%.
Both Prosper Personal Loan and LendingClub will charge you an origination fee. Prosper’s origination fee varies between 2.41% to 5% of your total loan amount, while you’ll pay a fee of 1% to 6% with LendingClub. This fee will be included in your overall APR and will be deducted from your loan proceeds.
You may get your funds marginally faster with Prosper than LendingClub. Prosper will often take between one to three days to send you your money, while LendingClub may take between two to four business days. However, keep in mind that Prosper will not send you any money until they have an investor to back your loan.
Prosper has a minimum credit score requirement of 640 to qualify for a loan, while LendingClub’s requirement is unspecified. If your credit score is below 640, you might decide to add a co-borrower with Prosper or pivot to LendingClub.
Prosper Personal Loan has a minimum credit score requirement of 640, while most of Avant’s customers have a credit score between 600 and 700. Both companies offer loans to people with fair credit, but if your score is on the lower end of the “fair” threshold, you may have better luck with Avant.
Prosper doesn’t have a mobile app for borrowers, while Avant does. So if you want to manage your personal loans on the go, you might consider choosing Avant.