Prosper Review

By Kevin Mercadante

Prosper at a Glance

Loan typesPersonal loans
Loan amount$2,000 to $35,000
Repayment terms 3 or 5 years
APR6.95% - 35.99%*
Minimum credit score640
Best forGood-credit borrowers looking for excellent rates

Visit Prosper

Overview

Founded in California in 2006, Prosper holds the title of the first peer-to-peer lending marketplace in America. It handles the servicing of the loan, as well as the matchmaking, helping to simplify the process of accessing financing. Prosper offers borrowers personal loans for a variety of purposes, from home use to consolidation, or even engagement ring purchases. To date, Prosper has handled over 2 million customers and funded over $9 billion in loans.

Best For?

Prosper's main selling point is its ability to quickly and efficiently match users to the financing they need. With its application and loan posting system, it can match you to the investors that are most likely to fund your loan, helping you get funding much quicker. Although the company accepts applications from all potential borrowers, it prefers to work with borrowers with credit scores starting at 640 and higher. Loans offered are ideal for customers with good to excellent credit who are seeking a no-frills, versatile personal loan without the hassle of institutional lenders and bureaucracies.

Loan Features

Prosper’s peer-to-peer model helps customers cut out the middleman. Loans can be originated and deposited into your account as quickly as 1 business day following approval, although Prosper notes that funding can take up to 3 business days to be available in your account.
While the transparent fee structure doesn’t include prepayment or transfer fees, if you fall behind on loan repayment you’ll be responsible for late payment and other penalty charges. Prosper also offers a mobile application to track your repayment progress and the status of your loan in addition to your spending. Prosper focuses exclusively on fixed-rate loans, guaranteeing that you won’t see your interest rates and payments fluctuate over time, making it easy to plan out your repayment schedule.
Prosper highlights:

  • Quick funding in as little as 1 to 3 days
  • Excellent range of loan amounts available
  • Avoid red tape and bureaucracy with direct peer-to-peer lending
  • Transparent fee structure makes repayment easier
  • Prosper Daily application offers money management and repayment tracking
  • No prepayment penalties
  • Competitive interest rates
  • Marketplace model offers possibility for more competitive interest rates for borrowers

Pros and Cons

Prosper’s service offerings are top of the line, but there are some areas it could improve:

  • Repayment terms are limited
  • Loans are only geared toward customers that have stronger creditworthiness
  • Origination fees can be high depending on prequalification

However, there are several highlights:

  • The company’s marketplace model creates more competition, encouraging more affordable rates
  • Support and service were both outstanding
  • The company’s interest rates and loan amounts are highly competitive
  • Prosper offers a straightforward application for prequalification

The Application Process

Thanks to its marketplace lending model, Prosper’s application process is more unique than many of its competitors. To get started, customers are required to fill out a basic questionnaire that collects personal details, as well as financial and credit information required to prequalify borrowers for their applicable interest rates. Customers applying for a Prosper personal loan should meet the following criteria:

  • A minimum FICO credit score of 640
  • A debt-to-income ratio less than 50%
  • Must have positive income (greater than $0)
  • No active bankruptcies filed within the last year
  • No more than 7 individual credit bureau inquiries in the previous 6 months
  • At least 3 open trades reported on credit reports

Though Prosper’s requirement for a minimum borrower credit score contrasts with many competitors, it enables the platform’s investors to offer more affordable interest rates considering the applicable borrowers are lower-risk.

Once you complete the initial application and it’s approved, you can create a loan listing on Prosper’s investor marketplace, where different investors can choose to bid on and fund loans. If approved, the loan amount is cleared and the loan is serviced. From then on, you will interact directly with Prosper and not investors. The company does charge a small origination fee on loans that ranges from 2.4% to 5%, depending on the borrower’s qualifications.

Prosper’s straightforward application and loan matching model empowers you to find the right financing solution at the most competitive interest rates and conditions available.

Loan Terms

Prosper offers repayment terms of 36 or 60 months for all its loans. This is less flexible than some competitors, but an excellent range of loan amounts and competitive interest rates make it a flexible tool for borrowers with good credit looking for extra financing. Prosper’s loans can be used for a variety of purposes, including medical expenses, debt consolidation, purchasing a new vehicle or repairing an existing one, home renovations, and more.

You can choose from loan amounts ranging between $2,000 and $35,000, a choice with more breadth than many other lending marketplaces and loan originators.

Prosper shines with its mechanism for rating potential loans and offering competitive terms for customers. Once you have prequalified for interest rates, you can create customized loan postings and load them onto Prosper’s online marketplace. After a posting is uploaded, loans are funded by investors who can bid on part of the whole amount, offering financing for those loans that fit their risk profile and portfolio preferences.

Unlike many other lenders, Prosper cuts out the middleman for funding, allowing the full financing to come from investors through their website while still acting as the loan servicer. This ensures a more competitive model, which can lead to better terms for customers and a higher likelihood of being funded regardless of borrowing qualifications.

Privacy & Security

As a lending marketplace, Prosper is aware of the importance of protecting its customers’ privacy and information. The company utilizes industry-standard technologies to protect data transmission and storage, including Extended Validation and Secure Socket Layer encryption methods to ensure that any information shared is encrypted and transmitted securely.

Moreover, it uses a variety of physical and electronic safety measures to make certain its data centers are fully protected. Prosper remains very transparent about why and how it collects customer information, as well as who it shares it with and how customers can opt out of data sharing.

Help & Support

Customers looking to reach Prosper can contact the company via email or via their toll-free call center. Prosper’s phone support is available Monday-Friday between 8am and 9pm ET, or 5am to 6pm PT. Prosper is also available Saturday between 9am and 5pm ET, or 6am to 2:30pm PT. In our experience, phone support was easy to reach and our waiting time was minimal.

As well as service representatives, the company hosts an informative education and resource center that covers many frequently asked questions from potential borrowers.

Summary

Prosper offers a simpler way to get a loan by creating a true lending marketplace that allows borrowers to match with investors comfortable with their risk profile. Moreover, thanks to a simple application and transparent funding process, Prosper makes it easy for customers to find the financing they need, when they need it. Finally, competitive interest rates and loan amounts make it an appealing option if you have good to excellent credit and are looking to finance major or unforeseen expenses.

Physical Address

Prosper Funding LLC

221 Main Street, Suite 300

San Francisco, CA

94105

Visit Prosper


* For example a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.32% and a 2.41% origination fee for an APR of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $308.54. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 7.69% and a 5% origination fee for an APR of 9.88% APR. You would receive $9,500 and make 60 scheduled monthly payments of $201.28. Origination fees vary between 2.41%-5%. Annual percentage rates (APRs) through Prosper range from 6.95% APR (AA) to 35.99% APR (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC. 

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