Good for: Good credit, debt consolidation
Prosper is one of the pioneers of peer-to-peer, or marketplace, lending, which connects good-credit borrowers with investors who can choose to fund their loans.
Prosper’s personal loans are a good fit for borrowers who:
- Have good to excellent credit scores. Prosper’s minimum score is 640, but its customers average 710.
- Have substantial annual income. There’s no minimum requirement, but the average for Prosper borrowers is about $89,000.
- Want a personal loan from an experienced online lender. San Francisco-based Prosper was founded in 2005 and has facilitated more than $12 billion in loans.
Prosper loan rates and terms
|Loan amounts||$2,000 - $40,000|
|Typical APR||6.95% - 35.99%|
|Origination fee||2.4% - 5%|
|Time to funding||1 to 3 business days after approval|
|Repayments||3 or 5 years|
|Soft credit check?||Yes|
|How to qualify||
|Best for||Borrowers with good credit, debt consolidation|
» MORE: Best loans for good credit
Prosper personal loan review
To review Prosper, NerdWallet collected more than 30 data points from the lender, interviewed company executives, completed the online loan application process with sample data and compared the lender with others that seek the same customer or offer a similar personal loan product. Loan terms and fees may vary by state.
Prosper provides unsecured personal loans that can be used for nearly any purpose, including debt consolidation and home improvements. Its loans require fixed monthly repayments over three or five years.
Prosper doesn’t fund loans with its own money like some online lenders do. The company underwrites applicants and matches investors with approved borrowers. LendingClub, another big marketplace lender, uses the same model. Other online lenders such as SoFi typically use their own capital to fund loans.
To qualify applicants, Prosper says it uses a risk-rating system that takes into account hundreds of data points, including credit history. Prosper’s ratings are used by investors to decide whether or not to invest in your loan.
Prosper requires two years of credit history, but borrowers’ average is 11 years.
The company charges an origination fee between 2.4% and 5% of the loan amount, which is deducted from the loan proceeds. For example, a $20,000 loan that carries an origination fee of 3% would cost $600, and the borrower would receive $19,400.
Loan example: For a borrower with excellent credit, a $10,000 personal loan with a repayment term of three years at 13.9% APR would carry monthly payments of $341, according to NerdWallet’s personal loan calculator.
How Prosper loans compare
Prosper loans aren’t as flexible as those from some other online lenders; you can’t adjust your payment schedule, and you’ll be charged a late fee if you fail to make a payment.
LendingClub has slightly more flexible loan terms and a lower minimum loan amount. It lets borrowers file joint loan applications and offers a payment modification plan when borrowers have trouble making payments.
SoFi offers similar rates, but its “members” also receive social perks like networking and educational opportunities, more flexible payment options, no late fees and unemployment protection. SoFi also offers higher maximum loan amounts up to $100,000.
How to apply for a Prosper loan
You can apply directly on Prosper’s website, submitting information including your employment status, income and monthly housing payment. Once approved, Prosper says funds will be transferred to your bank account within one to three business days.
NerdWallet recommends comparing loans to find the best rate for you. Click the button below to see estimated rates from multiple lenders on NerdWallet.Before you shop for a personal loan:
- Learn how personal loans work
- 4 steps to pre-qualify for a personal loan
- Read more personal loan reviews
Personal Loans Ratings Methodology
NerdWallet’s ratings for personal loans awards points to lenders that offer consumer-friendly features, including: soft credit checks, no origination fees, payment options, short time to funding, interest rate caps of 36%, and absence of prepayment penalties. Features are considered for their positive impact on consumers’ credit history and financial health. We only review 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.
— Among the very best for consumer-friendly features
— Excellent; offers most consumer-friendly features
— Very good; offers many consumer-friendly features
— Good; may not offer something important to you
— Fair; missing important consumer-friendly features
— Poor; proceed with great caution