LendingClub vs. Prosper Loans: How They Compare

LendingClub and Prosper offer unsecured personal loans with similar requirements, loan amounts, rates and fees.
Dec 10, 2021

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Prosper and LendingClub are online loan companies targeting fair- and good-credit borrowers. They’re among the pioneers of peer-to-peer lending and today offer personal loans for debt consolidation, home improvement and other purposes.

How are Prosper and LendingClub 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 these two companies’ fees, approval processes and special features.

Here’s a look at LendingClub and Prosper.

5.0

NerdWallet rating 

3.5

NerdWallet rating 

Loan amounts

$1,000 to $40,000.

$2,000 to $40,000.

APR range

6.34% - 35.89%.

7.95% - 35.99%.

Origination fee

1% to 6%.

2.41% to 5%.

Loan terms

Three or five years.

Three or five years.

Minimum qualifications

  • Minimum credit score: 600.

  • No minimum credit history.

  • Maximum debt-to-income ratio: 40%.

  • Minimum credit score: 600.

  • Credit history: 2 years.

  • Maximum debt-to-income ratio: 50% (excluding mortgage).

  • No minimum income.

Good option for:

  • Debt consolidation.

  • Those with short credit histories.

  • Debt consolidation.

  • Borrowers with high debt.

Consumers who qualify for personal loans from LendingClub and Prosper typically have good credit. LendingClub’s average borrower has a score of 700. Prosper borrowers have an average score of 722 FICO.

Consumers with lower credit scores can still apply; both lenders consider additional factors like debt-to-income ratios and income when approving loans.

Both LendingClub and Prosper accept joint applications, which can boost borrowers’ approval odds.

As “peer-to-peer” lenders, LendingClub connects borrowers with institutions like hedge funds or insurance companies that back loans. Prosper’s platform links borrowers with individuals who fund the loans.

LendingClub might be a better option if you:

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

  • Have a short credit history.

LendingClub may be a good fit for fair-credit borrowers, particularly those looking to consolidate debt. The lender simplifies the debt consolidation process by sending loan proceeds to up to 12 creditors, a feature that Prosper doesn’t offer.

How to qualify: LendingClub requires a minimum credit score of 600. There is no minimum credit history or income requirement. The average borrower has an annual income of $100,000.

Single applicants must have a debt-to-income ratio of 40% or lower, while the combined DTI for joint borrowers must be 35% or less. The minimum credit score for co-borrowers is 540.

Approval and funding time: The process from loan approval to receiving funds in your bank account can take less than five days.

Costs: LendingClub’s APRs range from about 7% to 36% and include an origination fee of 1% to 6% of the loan based on your credit profile. The fee 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 is a peer-to-peer lending platform offering personal loans to fair or good-credit borrowers.

How to qualify: Prosper’s minimum credit score is 600, but the borrower average is 722. The company doesn’t have a minimum income requirement; average borrower income is $106,000.

Prosper accepts applications from borrowers who have significant existing debt, allowing debt-to-income ratios up to 50% (excluding mortgages). It requires a minimum credit history of two years.

Approval and funding time: Prosper’s timeline from loan approval to funding typically takes five to eight days, potentially a few days longer than LendingClub’s.

Costs: Prosper’s APR range is about 8% to 36% and includes an origination fee from about 2% 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.


Personal Loans Rating Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Learn more about our ratings methodologies for personal loans and our editorial guidelines.

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