Prosper is a peer-to-peer (P2P) lending platform that connects borrowers with investors willing to fund their loans.
Founded in 2005, it was one of the first companies to introduce the P2P lending model in the U.S., offering an alternative to traditional banks and online lenders. Prosper offers personal loans ranging from $2,000 to $50,000 with repayment terms of two to five years.
If you're looking for a personal loan and considering Prosper, this review will break down everything you need to know—including interest rates, fees, approval process, and whether it’s the right choice for you.
Prosper Benefits
A personal loan from Prosper offers a few different unique benefits compared to other lenders. If you're in the need of cash you probably have considered getting a cash advance, which are are very short-term loans, usually for one or two weeks. Technically, these aren't even loans because they don't charge an interest rate.
But in case you are consolidating debt, or paying for a large expense like home improvement or a special occasion — Prosper has you covered.
- Get a Low Rate: Get a loan with a low, fixed-rate that never goes up. Check your rate online instantly.
- Pay at Your Own Pace: Pay off your loan with fixed 3 or 5-year* terms, and a budget-friendly, single monthly payment.
- Save Money: Save money with no pre-payment penalties.
Prosper Features
- Available for those who have insufficient credit: Prosper is a good choice for those who have been denied by banks and people who can not get a reasonable interest. It is one of the best bad credit loans. Prosper offers loans to people with a FICO score of only 640. Although high-risk borrowers have to pay higher interest rates, they are certainly cheaper than what you could get with a lender.
- Fixed rate loans: All of Prosper loans are delivered with a fixed interest rate so that in the long term you do not have to worry about an increase.
- Borrowing up to $ 35,000: with Prosper you can borrow between $ 2000 and $ 35,000. Most personal lenders do not allow you to borrow more than $ 25,000. Prosper is the right choice if you need to borrow more money.
- Fast online application: by answering a few basic questions about yourself and your finances, you receive an estimate of your interest rate..
- Limited loan conditions: Prosper requires that you choose a term of three or five years. While this should be good for most people, most lenders give their borrowers more flexibility when repaying their loans.
- No Early Redemption Fee: If you decide to repay your loan before the end of the term, no extra costs will be charged to compensate for lost interest.
- Earn money by investing: If you have money, you can earn some by paying part of the loans of other people. When they repay the loan, you receive the money that you have invested plus interest. The amount you earn depends on the interest rates of the loans to which you have contributed.
- Mobile money management apps: Prosper mobile apps for iOS and Android devices help you track your spending and credit over time. Register all your purchases to see how you spend your money and look for chances to save. You can add protection against identity theft for an extra charge.
Getting a Loan with Prosper is Easy
Getting a personal loan with Prosper is pretty straight forward.
Here is how it works:
1. Check Your Rate
The first step is to visit Prosper’s website and check your loan offer by entering basic personal and financial information. This includes your desired loan amount, income, and credit score. The prequalification process only requires a soft credit check, so it won’t affect your credit score.
2. Select a Loan Offer
Once you receive loan offers, compare the interest rates, loan terms, and origination fees. Keep in mind that the origination fee is deducted from the loan amount.
3. Complete the Application
If you decide to proceed, you’ll need to provide additional documentation such as proof of income, employment verification, and identity verification.
4. Loan Listing and Funding
Unlike traditional lenders, Prosper uses a peer-to-peer lending model, meaning your loan request is listed on the Prosper marketplace, where investors can choose to fund it. This process typically takes 1-3 business days.
5. Receive Your Funds
Once funded, the money is deposited directly into your bank account. Some borrowers receive their funds the next business day, while others may wait up to five business days.
A Smart Choice
It can be considered a smart choice to think about getting a personal loan from Prosper, as they offer you the opportunity to get the money that can really help you out of a bind.
This bind will come and go, but the credit score increase that you will get will only provide you with a stronger financial platform from which to work with. When you make payments to Prosper, that meet the timeframe that was laid out you will be establishing credit.
Related: What is the Importance of Your Credit Score?
This credit will serve as a strong point when you need to apply for other various forms of credit, such as store line credit or a future loan. Once you have paid back in full the money you borrowed from the prosper, they will report to the three major credit agencies and inform them on your payment history with them.
This will go on record and will be shared with other various lenders and credit companies. Good reports go along way when it is in regards to money borrowed.
Pros
- Unsecured personal loans do not require any guarantee
- Increase your credit score
- Get the money you need quickly
- A good credit can give you a lower interest rate
- Most are fixed-rate loans, which makes budgeting easier
Cons
- Prosper charges start-up costs that are equal to two to five percent of your borrowed amount.
- Bad credit may result in the rejection of your application.
- Approved borrowers with subprime credit could receive higher interest rates
- Many come with start-up costs or borrowing
- You may not get your money right away, so be patient.
Prosper Reviews Summary
Prosper is a good option for those who want to reduce their monthly payments and want to repay their loans over a longer period. Times are fixed at 36 or 60 months – and if your financial situation improves and you can pay faster, no penalty is imposed.
Prosper is the right choice if you need a loan, but are not eligible for conventional financing. Interest rates are reasonable compared to most credit cards and there are no prepayment costs.
