SoFi and Prosper, two of the largest issuers of online personal loans, target borrowers with good credit.
SoFi markets itself as a forward-thinking finance company that uses alternative underwriting criteria and offers social perks. Prosper pioneered peer-to-peer lending and favors consumers with well-established credit histories.
Comparing the two lenders, starting interest rates for well-qualified borrowers are similar, though SoFi doesn’t charge origination fees. Beyond cost, SoFi’s other features — including larger loan amounts, flexible payments and networking opportunities for its members — may tip your decision.
Here’s a closer look at key differences between SoFi and Prosper.
|$5,000 to $100,000||$2,000 to $40,000|
|6% - 15% (fixed and variable rates)||6.95% - 35.99% (fixed rates)|
|None||2.4% - 5%|
|3 to 7 years||3 or 5 years|
>>MORE: Personal loans for good credit
SoFi may be a better option if:
- You’re new to credit
- You want a variable-rate or large loan
- You want networking opportunities
SoFi, founded in 2011, refers to its borrowers as “members” and provides unique perks like happy hours, dinners and educational events in major cities. SoFi’s customer base has been described as HENRY — high earners not rich yet; the median income is $101,000.
SoFi is undergoing leadership changes and faces lawsuits from former employees regarding improper treatment of women and unfair pay for long hours. Its CEO, Michael Cagney, abruptly resigned in September. However, SoFi continues to make loans and says its business is stable.
How to qualify: SoFi is unusual among lenders in that it emphasizes free cash flow — your monthly income minus expenses — over credit score in its underwriting process. SoFi does have a minimum credit score requirement of 680, and borrowers generally have credit scores of 700 or higher.
SoFi also considers your financial history, industry and career experience. It accepts applicants with no established credit history and has no income or debt-to-income ratio requirement.
Time to funding: It typically takes seven days from starting an application to receiving funding.
Costs: SoFi’s alternative underwriting criteria could result in a lower annual percentage rate for borrowers in some cases. Its APRs start around 6% and top out at 15%, well below Prosper’s maximum of 35.99%.
SoFi is one of the few online lenders to offer variable-rate loans, which tend to have lower starting rates but can adjust up or down over the life of the loan. Some borrowers choose them, especially for shorter loan durations, but fixed-rate loans are more popular, the company says.
Payment flexibility: Unlike Prosper, SoFi lets borrowers change their payment due date, and it may waive an occasional late fee if you have a history of on-time payments.
In case of job loss, SoFi has a forbearance program that suspends payments or allows interest-only payments for up to a year.
Click “Check Rates” to apply on SoFi.
Prosper may be a better option if:
- You want a loan from an established company
- You don’t need extras like networking and social events
- Your credit history goes back two years or longer
Since 2006, Prosper has funded more than $10 billion in loans. It was the first peer-to-peer lender, which means that rather than funding loans itself, Prosper matches potential borrowers with individual investors who can choose to fund their loans.
How to qualify: Borrowers who qualify for a Prosper loan have strong credit, an average annual income of about $89,000 and an average credit history of 11 years. Prosper requires a minimum credit score of 640 and at least two years of credit history. Its debt-to-income ratio requirement is 50% or less.
Time to funding: 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 range from 6.95% to 35.99%. Unlike SoFi, Prosper charges an origination fee of 2.4% to 5% of the loan amount.
Like SoFi, Prosper doesn’t charge fees for extra payments or paying off your loan early. There is a late payment fee of 5% of the amount due or $15, whichever is greater.
Click “Check Rates” to apply on Prosper.
Shop around to find the best personal loan
Especially if your credit is good, your best bet may be to compare loans from SoFi and Prosper with other lenders. Click the button below to see estimated rates, monthly payments and credit score requirements from multiple lenders on NerdWallet.
Personal Loans Ratings Methodology
NerdWallet’s ratings for personal loans award 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. To ensure accuracy and consistency, our ratings are reviewed by multiple people on the NerdWallet Personal Loans Team.
— 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