LendingClub vs. Prosper Loans: How They Compare

LendingClub and Prosper offer unsecured personal loans with similar requirements, loan amounts, rates and fees.
Jeanne LeeDec 22, 2020

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Prosper and LendingClub are two of the most recognized and largest online lenders. They pioneered peer-to-peer funding and have issued billions in loans since their starts in 2006 and 2007, respectively. Both offer loans for debt consolidation, home improvement and other purposes.

How are these two lenders different? And which has the best loan for you? Given their similarities, it might come down to the interest rate you’re offered. Still, it’s worth comparing their fees, approval processes and special features. Here’s a look at LendingClub and Prosper.

Consumers who qualify for personal loans from LendingClub and Prosper typically have strong credit. LendingClub’s average borrower has a score of around 700; Prosper's average borrower has score closer to 720. Consumers with lower credit scores can still apply; both lenders consider additional factors when approving loans.

LendingClub accepts joint applications, which can boost approval odds, while Prosper accepts applicants with higher debt-to-income ratios.

As “peer-to-peer” lenders, both LendingClub and Prosper connect borrowers with individuals who fund the loans and set interest rates.

LendingClub might be a better option if you:

  • Have a co-borrower.

  • Have a debt-to-income ratio of 40% or lower.

  • Need a small-business loan.

LendingClub was founded in 2007 and has issued more than $55 billion in loans, including personal loans. Most borrowers use their loans to refinance existing debt or pay off credit cards.

How to qualify: In addition to a minimum credit score of 600, LendingClub borrowers need at least three years of credit history.

LendingClub has no minimum income requirement, but the average income is $84,012 for prime borrowers. That’s lower than Prosper borrowers’ average of $89,000.

LendingClub accepts joint applications for those who can’t qualify on their own. One borrower’s credit score must be at least 600, and the other’s can be as low as 540. Their combined debt-to-income ratio should be below 35%.

Time to funding: The entire process, from applying for a loan to receiving funds in your bank account, can take from seven to 10 days, similar to Prosper.

Costs:  LendingClub’s APRs range from about 11% to 36%. The APR includes an origination fee of 2% to 6% of the loan amount based on your credit profile. The amount is deducted from the loan before you receive it.

There's no charge to make extra payments or pay back the loan early. If your payment is more than 15 days late, you may be charged a fee of 5% of the amount due or $15, whichever is greater.

Prosper might be a better option if you:

  • Carry substantial debt.

  • Have a high income and credit score.

Prosper pioneered peer-to-peer lending in 2006 and has funded more than $16 billion in loans.

How to qualify: Prosper caters mainly to borrowers with strong credit, high income and a well-established credit history. It accepts applicants with credit scores of 630 or above.

It's also open to borrowers who have significant existing debt. It accepts debt-to-income ratios up to 50%, while LendingClub’s maximum is 40%.

Time to funding: Similar to LendingClub, Prosper’s approval process takes up to seven business days, with an additional one to three business days to receive your funds.

Costs: Prosper’s APRs compare to LendingClub's, and include an origination fee of 2.4% to 5%. As with LendingClub, the fee is deducted from your loan amount before you receive the money.

Prosper, like LendingClub, doesn’t charge anything to make extra payments or pay your loan off early. It has the same late payment fee of 5% of the amount due or $15, whichever is greater, after a 15-day grace period.

Shop around to find the best personal loan

Your best bet might be to pre-qualify with both LendingClub and Prosper and compare rates on any offers you get. The lenders are similar businesses but have unique grading systems, so one might offer you a better APR than the other.

NerdWallet recommends comparing loans to find the best rate for you. Click the button below to pre-qualify and receive a personalized rate from multiple lenders on NerdWallet.

NerdWallet’s ratings for personal loans award points to lenders that offer consumer-friendly features, including: soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus, and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews. Read our editorial guidelines.

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