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Robert Henderson

Last updated: 8/2019

Find the Best Personal Loan for Your Needs

There often comes a time where you may need a bit of extra cash to keep you going. People obtain financing for several different reasons – you might need to cover costs or you may have a large purchase to make. Either way, personal loans tend to be a good option. Many of them carry lower interest rates than credit cards and can help you pay back your debt over a prolonged period of time. In the past, you typically had to contact your traditional lenders to obtain a personal loan. Applications could be long and tedious – you may end up having to wait weeks to receive your funding.

Prosper Personal Loan Reviews

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Introduction

In this Prosper loan review, we’ll look at Prosper to see what they can offer you as an individual borrower. Our Prosper.com review is posted here to help you understand the mechanics behind their website. It’s important that you understand the type of lender that you’re working with if you’re seeking to obtain finance. If you want to be certain that you get the best deal, it’s always important to compare lenders – there are hundreds online, so you have plenty of choice!

Prosper: The Company

Prosper is part of the budding peer-to-peer lending industry. They connect investors with borrowers on their network. If you’re someone who wants to borrow money, you can head to their site and apply for a loan. The money is provided by other individuals who are looking to receive a return on their money. Prosper acts as the intermediary and collects a small fee for their services.

The company is different from most traditional finance firms – they don’t provide the bulk of the funding themselves. Prosper first started operating in 2005, but only grew to prominence in recent years. Investors are able to consider the credentials of the person that is borrowing the money from them. It is an online marketplace for finance. The company employs over 450 people and operates with a revenue of over $150 million. Like many modern fin-tech companies, Prosper is currently headquartered in San Francisco, California.

Prosper Personal Loans Review: Features

If you’re thinking of obtaining a loan from Prosper, it’s important that you understand how the loans work. You should always look at the various features included in the loan to better understand how the company works – with so much choice, it’s important to choose a lender that has the feature you’re looking for. Modern lenders are much more customer-focused – they want to entice you to borrow from their platform.

Below we’ll take a look at the features that distinguish Prosper from your traditional lenders.

Prosper Personal Loan APR: 6.95% to 35.99%

Minimum Loan Amount: $2,000

Maximum Loan Amount: $40,000

Minimum Credit Score: 640

All Prosper personal loans are unsecured personal loans.

Peer-to-Peer

As mentioned previously, one of the primary features of Prosper personal loans is the peer-to-peer nature of the lender. When you borrow from Prosper, an investor is giving you funds to use for whatever purposes you need. Typically, a variety of different investors will purchase a piece of your loan – this is called funding. It’s a great way for people to obtain finance with credit scores that could potentially be turned down by traditional lenders.

Online

Prosper is an online lender, everything is done through their web portal. If you’re someone who wants to streamline the lending process, using Prosper is a great way to get a loan. They know how to ensure you have a quick, painless borrowing experience that you might not be able to find at a traditional lender.

High Credit and Income Favored

Prosper has a minimum credit score of 640, but most of their borrowers are closer to 710. Most borrowers also make around $90,000 per year, so this means that you’ll need to have decent credentials if you want to obtain a loan through Prosper. Still, they do offer loans to some people who may be turned down by a traditional lender.

Term Choice

Prosper is more flexible than some borrowers because they allow you to choose between two different term times. You can choose to borrow for five years or three years. This means that you can better prepare your loan in the way that you expect to be paid. It can help you better manage your money if you’re worried about a specific type of term.

Fixed Rate

Prosper loans are fixed rates, so you won’t have to worry about your interest rate changing throughout the life of your loan. This is a great feature that ensures there won’t be any nasty financial surprises throughout the term of your loan. If you’re someone who is on a strict budget, you should always be looking for a fixed rate!

No Pre-Payment Penalty Fees

Lastly, you can pay off your loan early without having to worry about pre-payment fees. If your financial situation changes, you’ll be able to pay off your debt early and save money without having to worry about extra costs. It’s nice to know you have this option when you’re borrowing money.

What is a Personal Loan?

If you’re looking at this Prosper loans review, you probably already have a decent idea of what a personal loan is. But some people don’t truly understand what personal loans are – they have only recently resurged in popularity. Personal loans are traditionally loans that can be used for any purpose. Unlike a mortgage, you don’t have to tell your lender why you’re obtaining a personal loan – you apply and receive the funds to do with as you please.

This means that it is an extremely flexible form of loan – it can help you in almost any situation. There are two types of personal loans – secured and unsecured. Secured personal loans typically have lower interest rates, but you have to offer an asset up as collateral for the loan. Unsecured personal loans are different – they’re loans that aren’t tied to a specific asset, but they also tend to have a higher interest rate.

Reasons for Obtaining Personal Loans

There are a variety of different reasons that people use personal loans. As mentioned previously, you can use personal loans for any reason that you see fit. In this section of our Prosper loans reviews, we’re going to take a look at some of the most common reasons borrowers use personal loans.

Emergency Expenses

If you have an emergency expense that pops up, you might not be able to afford to pay it. Or you might find that you want to spread the cost of the expense out over a period of time. This might be the result of a fine or plumbing issues at your home. Whatever the reason, personal loans can help find you the funding.

Gaps in Cash Flow

If you have a gap in cash flow because you’re a student or because you’re in between jobs, you might find that personal loans are able to help you get the cash you need.

Debt Consolidation

One of the most popular reasons people use personal loans is to consolidate different debts at lower interest rates. If you have a ton of credit card debt, you might find it easier to pay off with a personal loan. If you’re someone who wants to ensure that you pay off your debt quicker, debt consolidation is a good idea. Many personal loans have lower interest rates than credit cards, which can make it much easier to pay off loans. Just make sure you don’t consolidate your debt with a high-interest loan.

Pros and Cons of Prosper Personal Loans

If you’re going to use a lender, it’s important to consider the pros and cons before you sign on the dotted line. While you probably have a pretty decent idea of whether Prosper is right for you, we’ll take a look at the advantages and disadvantages in a more succinct manner below:

Prosper Personal Loans Advantages

  • Online – The lender is entirely online, which makes them much easier to deal with when compared to a traditional lender. You won’t have to go to a storefront to get a loan.
  • No Prepayment Penalties – If you want to pay your loan off early, you can do so without any fees.
  • Low Rates for Good Credit Scores – If you have a good credit background, you can get an interest rate that is much lower than a credit card – you might be able to get a rate of around 5%.
  • Billions of Dollars in Funding – The company has provided around 12 billion dollars in funding, meaning they have plenty of experience helping their customer getting the money they need.

Prosper Personal Loans Disadvantages

  • High Rates for Certain Lenders – If you’re looking for loans with bad credit, you might only be offered a rate around 35% — this is higher than many credit card rates.
  • High Requirements – You typically need to have a decent credit score and a high income to get a loan.
  • Sometimes Takes Time for Funding – Because most loans are funded by multiple lenders, they sometimes take longer to get funded than other personal loans.

Preparing for Your Prosper Loan Application

If you’re going to apply for a loan, you need to be certain that you’re as prepared as possible for the application process. If you don’t prepare yourself for the loan, you might end up getting rejected for financing. If you are rejected, it will impact your ability to obtain financing in the future. The best way to get a loan is to choose the right lender and ensure that you’re ready for the application. Check out some of our preparation tips below:

Check Credit Score and Report

If you want to be as prepared as possible, it’s always a good idea to check your credit report and credit score before you apply for a loan. If there are mistakes on your credit report, you can typically have them removed by asking the reporting bodies. You can also ask credit repair companies to help you for a small fee.

Pay Down Credit Cards

If you have credit card debt, paying it down can help alleviate some of the pressure on your credit score. The less of the available credit that you use, the higher your credit score will be. This is one of the quickest ways to improve your credit score.

Consumer Reputation

You should always check what past customers think of the lender that you’re working with. If you want to gauge how your experience will be, it’s often a good idea to check out what other borrowers have thought. The best way to do this is to find some online Prosper loan reviews. In this section, we’ll look at what different consumer watchdog groups think of Proper loans. Check it out below:

Better Business Bureau (BBB)

The BBB is one of the leading consumer watchdog groups in the United States. Consumers use the site to rate the best loan companies and make complaints. The BBB issues a rating for all of their accredited companies. While Prosper reviews on BBB do have some negative reviews on the BBB, the watchdog groups has issued Prosper with an A+ rating – the highest rating available. You can look at the individual Prosper loan reviews on their site.

Consumer Affairs

Consumer Affairs is just like Prosper. Unlike with BBB, Prosper is not accredited on Consumer Affairs’ website. The company has a 1.3/5 rating – but this must be taken with a grain of salt because it only comes from six reviews. You can find Prosper reviews and Prosper lending reviews on the Consumer Affairs website.  

Verdict

Prosper is a great peer-to-peer loans company that provides billions of dollars in funding to people who need personal loans. While some of their rates and lending requirements are quite high, they’re still a good option for people with good credit scores and decent income levels. Our website reviews Prosper to help our readers understand what type of lender they are.

Our website isn’t just a Prosper.com review. If you don’t think Prosper is right for you, make sure to check out some of the other reviews on our site. We’re a great resource for people that need personal loans.

FAQ

General Information on Prosper

The basic things you need to know about the company, you’ll find here.

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What is Prosper Marketplace?

Prosper Marketplace is the official name of the peer-to-peer lending company reviewed in this article.

Does Prosper have origination fees?

Yes, and the amount taken from you is based on your credit score and your loan amount.

Is Prosper available in my state?

Prosper is not available in every state. But you can try to find your state in this link under Residence to see if their services are available in your area.

When will Prosper loans be allowed in Texas 2019?

It already is allowed in Texas. However, you cannot be an investor as of now.

How do Prosper loans work?

When you submit a loan application, all investors will see it and decide if they want to fund your loan. If you don’t get anyone within 14 days, Prosper will deny your application.

Investment Opportunity in Prosper

Prosper isn’t just a good source of loans. You can also earn from it.

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Is Prosper a good investment?

It depends on the risk exposure you’re willing to accept. Compared to other P2P lending sites, Prosper loans tend to be riskier, so that’s something you should take into account.

How do I invest in Prosper?

Once approved as an investor, there are three ways you can invest in Prosper:

  1. Look for a loan you want to fund and click Invest Now.
  2. Use Quick Invest to efficiently spread your money on different loans.
  3. Place investments through Prosper’s API.
How do I make money on Prosper?

You make money on Prosper by lending someone money. And with any other loan, the earnings come as interest payments.

When do Prosper loans post for investment 2019?

Prosper doesn’t do that. As an investor, you have the choice to invest on loans whenever you want to, all-year round.

How much of the profit do you get on Prosper loans?

Prosper takes around 3% of your interest earning. So, for every $100 you earn, Prosper gets $3.

How do I buy down a Prosper loan?

Once you log into the portal, you’ll see a list of loan applications waiting to be funded. Simply click on the loan that you want to ‘buy’ and that’s it.

How do I sell loans on Prosper?

You can’t sell loans on Prosper. You may only choose from the loan applications.

Why are some Prosper loans immediately paid?

Some borrowers have the capacity to pay their loans back before the loan term ends. And as an investor, it means getting your returns more quickly.

Loan Application, Approval, and Funding

Decided on applying for a Prosper loan? Learn more about the process here.

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What does Prosper require to get approve on a loan?

There’s no fool-proof way to get approved because the investors decide whether they believe you can pay, not Prosper itself. However, you need to meet certain minimum requirements to submit your loan application such as below 50% debt-to-income ratio and no bankruptcies filed within the last twelve months.

How long does it take to get approved for a Prosper loan?

It depends on how attractive your profile is to the investors. But at the maximum, your loan has to be funded in 14 days or else it gets denied.

How long does Prosper take to fund?

After your approval, it will take one to three days for the loan amount to be transferred to your bank account.

What percentage of Prosper loans get funded?

Unfortunately, there is no data on this. If you’re worried about your odds of approval, you can always improve your financial standing by paying off some of your existing debts. You can also apply for more options such as a Best Egg loan.

How many Prosper loans don’t get funded?

Unsuprisingly, Prosper does not release this data so as not to discourage people with lower credit rating to apply.

How do I know if my Prosper loan has been funded?

After logging in, you can check the status of our application on the Accounts Overview page. It should say Completed for fully-funded loans.

How do I speed up my Prosper loan deposit?

The best you can do is look at reviews on how quickly the other borrowers got the loan amount deposited to their account and identify which banks they used.

How soon can you apply for another loan with Prosper?

After applying and getting approved for a Prosper loan, you will have to wait six months before you can apply for another one.

How difficult is it to get a loan with Prosper?

Compared with other P2P sites, it is easy to get a loan with Prosper as it gets a higher volume of high-risk loans.

Credit Score Concerns

Wondering how Prosper will affect your credit? Read on to know more about it.

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Does Prosper report to credit bureaus?

Yes. Prosper reports to all three major credit bureaus.

Do Prosper loans show on credit report?

As Prosper reports to the credit bureaus, it follows that your Prosper loans will reflect on your credit report.

What does Prosper loan look like on credit report?

It will be listed as a personal loan. Depending on what type of loans you currently have, this can help increase its diversity.

What credit score for 20k loan from Prosper?

It depends. Even if your score just a little above the minimum, it can be possible for you to get this big a loan amount if you have a low debt-to-income ratio and you get the longest loan term allowed.

Your Prosper Loan

Know more about you Prosper loan through the questions below:

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How do I see my Prosper loan APR?

When you get approved for the loan, you will be able to see its terms, including the APR that you have been approved for.

How many Prosper loans can I have?

You can have more than one Prosper loan for as long as the total loan amount doesn’t exceed $35,000. So for example you could use one loan for pool financing and another form home improvement.

What kind of loan is Prosper?

What Prosper offers is a personal loan, funded by peers or investors.

Can I refinance my Prosper loan?

Yes. If you have improved your credit score since your application, you can refinance your loan to get a better rate.

How long do you have to repay a Prosper loan?

You have anywhere from three years to five years (depending on your loan term) to pay your Prospeer loan back.

How long does Prosper take to start charging on a loan?

You will have to start paying for the loan one month after the origination date. This will be the same date every month.

Where do I mail Prosper loan payoff check if I use FedEx?

No matter what you use to send the check, you will send it to:

Prosper Marketplace Inc.

P.O. Box 396081

San Francisco, CA 94139-6081

Why does Prosper give loans more freely than Lending Club?

Prosper’s risk appetite is different from Lending Club. But in exchange for that, it charges higher rates.

Cancelling and Defaulting on your Loan

If you’re having second thoughts about your loan, the questions below will show you what your options are.

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How do I cancel my Prosper loan?

You can cancel a loan application even after it’s funded up until the loan origination date by calling 1 (866) 615-6319.

What will happen if I stop paying my Prosper loan?

After a few months, your debt will charged-off and be sold to a third-party collector who can very persistent in getting their money back.

What happens if you default on a Prosper loan?

If you default on a Prosper loan, you will never be allowed to borrow there again.

What percentage of Prosper loans default?

Sadly, there’s no data on this. Publishing such would deter investments.

Why do people let Prosper loan go delinquent?

There have been many cases that Prosper just let people get away with it, a reason why a greater number of people just take the money and run.

How do I get out of a Prosper loan?

The only sure way to get out of a loan is by paying it or by filing for bankruptcy. The latter must definitely be taken as a last resort.

Will Prosper sue me?

They can, but it’s rare that they actually do. After all, there’s no incentive for them to do so because they didn’t find the loan.

Additional Questions about Prosper

Your concerns about the process or the specifics that do not directly affect your chances of approval for a loan are directed here.

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What does it mean when it says my loan has funded at Prosper?

It means that you have been approved for the loan. After this, you only have to wait for the funds to get to your bank account.

How does Prosper verify income?

Prosper verifies your income through the documents you submit such as tax returns, paystubs, and bank statements.

Why is Prosper loans taking long to respond?

If this is about a complaint, the number of pending complaints can greatly affect their response time. As for the verification process, the type of documents you submit can either shorten or extend the time it takes for them to verify your account.

Is Prosper better than Lending Club?

In terms of returns of investment, Prosper is the better choice. It is better for borrowers as well with credit scores as low as 640.


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Robert is our in-house expert on personal loans and finance. He got an MBA, specializing in Finance, before joining the workforce. After working for multiple Fortune 500 companies in the past decade, he brings a wealth of knowledge and experience to the table.