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Prosper Personal Loans Review
Prosper uses a peer-to-peer funding approach for personal loans. In practice, this means that after application and approval you post a loan listing which describes how much money you need and why. Investors then fund some or all of your loan and once it’s fully financed the money will be deposited into your account.
This peer-to-peer model means less risk for investors, in turn making it possible for Prosper to offer personal loans for borrowers that have fair — rather than good or excellent — credit ratings.
But how do Prosper loans stack up against the competition? Using our proprietary SimpleScore methodology, our Prosper loan review evaluates the provider across five key categories — interest rates, customer satisfaction, fees, support and loan terms — to help you find your personal funding best-fit.
[ Read more: The Best Personal Loans ]
Prosper personal loans at a glance
|Terms||36 or 60 months|
|Best for||People who have fair credit and need reliable funding|
|Not for||People with bad credit or perfect credit|
|Standout feature||Multi-source funding with lower rates than payday loans|
What we like about Prosper personal loans
Prosper’s biggest advantage is its peer-to-peer lending framework, which allows investors to lower their risk by funding only a small portion of any personal loan. This reduced risk translates to more approval for fair-credit borrowers, making it easier for them to get the money they need, when they need it, without the massively inflated interest rates charged by payday loan providers.
Prosper also makes it possible for fair credit borrowers to apply for joint personal loans, further increasing their chances of approval if they both have steady jobs and reliable incomes. As a result, Prosper loans are a great choice for those who don’t qualify for traditional, single-applicant loans.
[ More: How to Get a Loan With Fair Credit ]
Things to consider
Prosper reviews are generally favorable — the company is upfront about its origination fees (2.41%–5%) and its application process — but the lender can take longer than average to fully fund loans. This is because money isn’t moved into your account until there are enough investors to completely cover the loan amount, and since investors aren’t compelled to fund any particular loan, there’s no guarantee of how long the process will take.
Prosper vs. the competition
Payoff loans offer similar loan amounts to Prosper — $5,000 to $35,000 — and are also designed for borrowers with less-than-perfect credit. Where the lenders differ are in term lengths and APR. Payoff lets borrowers select terms ranging from two to five years and offers APRs between 5.99%–24.99%. It’s worth noting, however, that Payoff loans are specifically designed for credit card debt consolidation; they’re not offered to help pay for large purchases or complete home renovations.
Read our full Payoff review to learn more about consolidating credit card debt with Payoff.
Upstart is a personal loan provider started by ex-Google employees. Its claim to fame? Automated loan processing and approval that uses artificial intelligence and takes into account more than just your credit score. As a result, applications with Upstart are quick, simple and often approved — even if you don’t have a great credit score. But Upstart also comes with some potential downsides. Unlike Prosper, the company charges a fixed origination fee of 8.1%, and its APRs range from 8.94%–35.99%, both of which are higher than the industry average.
To learn more about this fair credit lender, read our full Upstart review.
Avant is a well-known personal lending provider that offers loans between $2,000 to $35,000 with terms ranging from two to five years, along with an origination fee of 4.75%. Where Avant comes out ahead of Prosper is in funding time — many borrowers receive their money the next business day. Prosper, meanwhile, offers better interest rates to well-qualified borrowers from 7.95%–35.99%, while Avant’s rates range from 9.95%–35.99%.
Read our full Avant review to learn more.
How much will a Prosper personal loan cost?
The cost of a Prosper personal loan depends on several factors, including your current credit rating, the amount you’re borrowing, your APR and your origination fee. According to the company’s website, all Prosper loan applications are assigned a Prosper Rating, which ranges from lowest (AA) to highest risk (HR). The higher your risk rating, the less favorable your terms, and the more you’ll pay for your Prosper personal loan.
Cheaper alternatives to Prosper personal loans
Depending on your credit score, credit history and current financial situation, you may be able to find cheaper or faster alternatives to Prosper personal loans. For example, Payoff offers APRs from 5.99%–24.99%, while Avant loans come with origination fees of just 4.75%. It’s also worth checking with your current financial provider since some are willing to fund personal loans if your credit isn’t ideal but you have multiple products with the bank— such as savings and checking accounts and investments or mortgages — and have never defaulted on previous loans.
Prosper in the news
- Prosper continues to deliver on personal loan potential, funding more than $17 billion worth since 2009. However, the lender saw a 25% decrease in loan origination during the first quarter of 2020 — likely due to greater competition for borrowers during the COVID-19 outbreak.
- The company is also branching out into other credit options, including digital HELOCs with no origination fees. The HELOC program started in Alabama, Arizona, Florida and Texas and is expected to roll out to other states.
Prosper now ranks among top market leaders in peer-to-peer lending, with expert predictions putting the market at $44 billion by 2024.
Last updated September 16, 2020 – Updated editorial review of the brand.
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