Prosper Loans is a peer-to-peer online lending marketplace that offers fixed-rate personal loans and Home Equity Lines of Credit to borrowers in the U.S. (except Iowa and West Virginia). The loans are funded by investors (individuals or institutions) who earn returns based on the loan repayment they invested in. Prosper loans are unsecured, ranging from $2,000 to $40,000. Prosper is not a bank; however, they partner with WebBank (FDIC-Insured) to originate the loans, which investors then fund. Some leading investors backing the marketplace are Sequoia Capital, Francisco Partners, Credit Suisse NEXT Fund, and Institutional Venture Partners.
What Are Prosper Loans?
Prosper began in 2005 in San Francisco, California, and officially offered online loans in 2006. They are pioneers in the peer-to-peer lending industry, able to declare being the first of its kind in the U.S. Prosper was founded by Chris Larsen and John Witchel with a vision of promoting financial well-being. In 2015, Prosper acquired American Healthcare Lending, now established as Prosper Healthcare Lending (PHL), a subsidiary. In 2020, Prosper collaborated with BBVA USA to offer digital Home Equity Lines of Credit (HELOCs). Today, Prosper is considered one of the largest online lending platform marketplaces.
Is Prosper Loans a Good Loan Company?
Over 1 million borrowers have received loans through Prosper for a total borrowed $19 billion. They’ve been lending for over 15 years and have an A+ rating with the Better Business Bureau. They are transparent with their fees and requirements. They offer low, competitive rates for their personal loans and don’t charge prepayment penalties. Prosper is guided by its mission to “advance financial well-being by giving borrowers access to affordable credit while allowing investors to invest in the consumer credit asset class.
What Types of Personal Loans Can You Get Through Prosper?
Prosper offers fixed-rate, unsecured loans with two payment terms: three or five years. The fixed interest rates range from 7.95% to 35.99%.
They allow co-borrowers on their loans, and the loan proceeds can be used for a wide range of purposes, such as:
- Medical bills
- Automobile purchase
- Vehicle expenses
- Vacations
- Debt consolidation
- Large purchases
- Household expenses
- Home improvements
- Taxes
It should be noted that they do not allow the use of personal loan funds to pay for educational expenses, such as tuition or boarding.
How Much Can You Borrow with a Prosper Loan?
The minimum loan amount you can borrow using a Propser personal loan is $2,000, and the maximum is $40,000.
How Long Does Getting Approved for a Loan with Prosper Take?
It can take up to 10 business days for your application to be reviewed and approved. Your application must be at least 70% funded by investors within 14 days or the loan will be denied. The time it takes for the investors to provide funding impacts the time it takes to receive your money; however, it generally takes five days.
How Do You Qualify for a Loan with Prosper?
Like other lenders, they consider the following when calculating the interest rate for your loan:
- Your credit score and history (less than five inquiries in the last six months)
- Employment status
- Debt to income ratio (less than 50%)
- Loan repayment term chosen
It’s important to know that to apply for a Prosper loan, and you must meet the following requirements:
- No bankruptcies within the last twelve months
- Have less than five inquiries in the previous six months
- A minimum of three open loans on your credit report
- A debt-to-income ratio under 50%
- Be at least 18 years of age
- Have a Social Security number
- Have an open bank account in the U.S.
- Live in the U.S.
- Be a U.S. citizen, permanent resident, or have a visa
- Have an income of more than $0
Fees and Costs Associated with a Prosper Loan
There are fees associated with each Prosper loan:
- Loan origination fees of 2.41% to 5% of the loan amount
- Late fees if you’re 15 days or more past due
- If you are paying by check, there is a fee of either 5% of the payment amount or $5, whichever is less. You can avoid this fee by signing up for automatic payments.
You can make payments by phone, online, or by check; however, they do have restrictions on payment methods and will not accept the following options:
- Debit and Credit Cards
- Wire Transfers
- Mobile Payments
- Cash
- Bitcoin
- Digital Wallets
How to Get a Prosper Personal Loan
Completing an application can be done in just a few minutes on Prosper’s website.
To get started online with the loan application process, select the dollar amount you need and answer a few questions, such as your income, the reason for borrowing, and your current housing payment. You will be provided with your loan rate instantly.
Checking the rate you will receive is processed as a soft credit pull, which will not negatively affect your credit score. Once submitted, investors will review your application on the Prosper marketplace. You will receive an offer(s) and can choose which one you prefer and have the funds electronically transferred to your bank account via direct deposit.
You may be required to provide documentation for verification purposes. If so, upload them online through your Prosper Account.
