Prosper Personal Loans Review

Positive peer pressure puts Prosper ahead of most old-school lenders.

APR Range
7.95%–35.99%
Loan Amount
$2K–$35K
Term
36–60 months
SimpleScore
3.2 / 5.0
close
SimpleScore Prosper 3.2
Rates 2
Loan Size 5
Customer Satisfaction 3
Support 3
Fees 3
  • Easy application process
  • Fair credit loans
  • Co-applicant options
  • Longer funding time
Prosper Disclosure

For example, a three-year $10,000 personal loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 personal loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. Personal loan APRs through Prosper range from 7.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for personal loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans 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 personal loans made by WebBank, member FDIC. Prosper and WebBank take your privacy seriously. Please see Prosper’s Privacy Policy and WebBank’s Privacy Policyfor more details. Notes offered by Prospectus. Notes investors receive are dependent for payment on unsecured loans made to individual borrowers. Not FDIC-insured; investments may lose value; no Prosper or bank guarantee. Prosper does not verify all information provided by borrowers in listings. Investors should review the prospectus before investing.

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 ]

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In this article

    Prosper personal loans at a glance

    APR7.95%–35.99%
    Loan Amount$2,000–$40,000
    Terms36 or 60 months
    Best forPeople who have fair credit and need reliable funding
    Not forPeople with bad credit or perfect credit
    Standout featureMulti-source funding with lower rates than payday loans

    What we like about Prosper personal loans

    Peer-to-peer potential

    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.

    Co-applicant approval

    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

    Delayed funding

    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.

    Check Your Personal Loan Rates

    Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

    Get Started

    with our trusted partners at Bankrate.com

    Prosper vs. the competition 

    Payoff

    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

    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 6.95%–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

    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.

    [ Read: Secured Personal Loans vs. Unsecured Personal Loans ]

    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.

    [ Read: The Best Bad Credit Personal Loans in 2020 ]

    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.

    We welcome your feedback on this article and would love to hear about your experience with the personal loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Methodology

    SimpleScore

    The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.

    For every review, our editorial team:

    • Identifies five measurable aspects to compare across each brand
    • Determines the rating criteria for each aspect score
    • Averages the five aspect scores to produce a single SimpleScore

    Here’s a breakdown of the five aspect scores and their rating criteria for our review of the best personal loans of 2020.

    Why do some brands have different SimpleScores on different pages?

    To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

    However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare NetCredit’s personal loans according to our criteria for the best personal loans, it scores a 2.3 out of 5. But when we compare NetCredit according to the criteria for the best bad credit personal loans, it scores considerably higher, since the criteria for the latter review are more lenient (lenders who serve borrowers with bad credit will always offer higher rates, so we needed to adjust our category methodology to account for different industry standards).

    Questions about our methodology?

    Email Hayley Armstrong at hayley@thesimpledollar.com.

    Rates

    We looked at the maximum APR for each lender — the lower their maximum rate, the higher their score.

    Loan Size

    We awarded higher scores to lenders with more generous loan sizes.

    Customer Satisfaction

    We leveraged the J.D. Power 2019 Personal Loan Satisfaction Study℠ to see how customers rated their experience with each lender. (If a lender wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

    Support

    We awarded higher scores to lenders with the most channels for customer support.

    Fees

    We looked at the three most common fees — origination, late payment, and pre-payment — and penalized lenders for each fee charged.

    Reviewed by

    • Courtney Mihocik
      Courtney Mihocik
      Loans Editor

      Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to Interest.com, PersonalLoans.org, and elsewhere.