Prosper Loans: 2022 Personal Loan Review




Prosper is a lending platform that provides personal loans to borrowers with fair or good credit.

To qualify applicants, Prosper uses a proprietary rating system that considers data points like credit history and debt-to-income ratio. Then, a prospective borrower is assigned a Prosper score, which investors use to decide whether to fund the loan.

Your application expires if your loan request isn’t at least 70% funded within 14 days, though most loans are funded within three days, according to the company.

Table of contents

Prosper at a glance

Origination: 1% to 5%.
Late payment: 5% of monthly payment or $15, whichever is greater.
Insufficient funds: $15.
Pay by mail: $5.

Time to fund after approval

Loans not available in IA, WV or U.S. territories.

APRs presented are estimated and were created based upon information entered by the consumer and through analysis of information publicly available at Prosper.com. The estimated APR presented does not bind Prosper. The range of APRs available through Prosper is 6.99% to 35.99%. Only borrowers with excellent credit qualify for the lowest rate available. Your actual APR depends upon credit score, Prosper Rating, loan amount, loan term, credit usage and history. All loans are subject to credit review and approval. All personal loans made by WebBank, Member FDIC. For example, a two-year $10,000 personal loan would have an interest rate of 11.5% and a 4.00% origination fee for an annual percentage rate (APR) of 15.64% APR. You would receive $9,600 and make 24 scheduled monthly payments of $468.40. A three-year $10,000 personal loan would have an interest rate of 11.74% and a 5.00% origination fee for an annual percentage rate (APR) of 15.34% APR. You would receive $9,500 and make 36 scheduled monthly payments of $330.90. A four-year $10,000 personal loan would have an interest rate of 11.50% and a 5.00% origination fee for an annual percentage rate (APR) of 14.27% APR. You would receive $9,500 and make 48 scheduled monthly payments of $260.89. A five-year $10,000 personal loan would have an interest rate of 11.99% and a 5.00% origination fee with a 14.27% APR. You would receive $9,500 and make 60 scheduled monthly payments of $222.39. Origination fees vary between 1%-5%. Personal loan APRs through Prosper range from 6.99% to 35.99%, with the lowest rates for the most creditworthy borrowers. Eligibility for personal loans up to $50,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. **You may receive your funds one business day after your acceptance of the loan offer, completion of all necessary verification steps and final approval. One business day funding is also dependent on your bank’s ability to quickly process the transaction.

Where Prosper stands out

Joint loan option. Prosper’s platform allows two borrowers to apply together as joint applicants. Including a co-borrower with stronger credit can improve your chances of getting a loan or a lower annual percentage rate.

Fast funding. Prosper says next-day funding may be available for approved borrowers, and most receive loan funds within three days upon loan approval. While some lenders offer same-day funding, one to three days isn’t uncommon.

Wide range of loan amounts. Prosper provides access to loan amounts from $2,000 to $50,000, which allows borrowers to cover large and small expenses, including debt consolidation and pricey home improvement projects.

Home equity line of credit. In addition to its unsecured personal loans, Prosper offers a variable-rate home equity line of credit, or HELOC, for borrowers in some states. The maximum credit amount is $500,000, and Prosper says applicants may receive funding within weeks.

Compare Prosper with other loan companies

Where Prosper falls short

Origination and late fees. Borrowers may be charged an origination fee ranging from 1% to 5%. Many online lenders charge an origination fee that can skim a few hundred to a few thousand dollars off the loan amount once approved.

Loan payments more than 15 days past due will draw a late fee, which is 5% of the monthly payment amount or $15, whichever is greater.

No rate discount for autopay. Unlike some lenders, Prosper does not offer an additional rate discount for setting up autopay. The discount usually ranges from 0.25 to 0.5 percentage points and motivates borrowers to pay on time.

No direct payments to creditors. Prosper does not send your loan proceeds directly to creditors when you consolidate debts with a loan. Instead, borrowers have to keep track of their own repayments.

How to qualify for a Prosper loan

Most lenders have basic requirements to apply, and some have financial requirements or recommendations to qualify. To apply for a Prosper personal loan, you must be:

  • A U.S. citizen or permanent resident.

  • Able to provide a verifiable bank account.

  • Able to provide a Social Security number. 

Here are the lender’s minimum requirements to qualify for a loan. (Meeting these requirements doesn’t guarantee approval.)

  • Minimum credit score: 560.

  • Minimum credit history: None.

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

  • Minimum annual income: None; this lender accepts income from alimony, retirement, child support, Social Security payments and other sources.

Here are details about Prosper’s average borrower, according to the lender:

  • Average credit score: 685.

  • Average annual income: $86,000.

  • Average loan amount: $10,445.

  • Most common loan term: 3 years.

  • Most common loan purposes: Debt consolidation and home improvement.

Before you apply

  • Calculate your monthly payments. Use a personal loan calculator to determine what APR and repayment term you’d need to get a loan with affordable monthly payments.

  • Make a plan to repay the loan. Review your budget to see how the loan’s monthly payments will affect your cash flow. If you have to cut other expenses to repay the loan, it’s better to know that before you borrow.

  • Gather your documents. Prosper requires proof of income, which can be a W-2 or paystub, as well as proof of address and a Social Security number. Having these documents handy can speed the application process.

How to apply for a Prosper loan

Here are the steps to apply for a Prosper loan.

  1. Pre-qualify on Prosper’s website. You’ll be asked how much you want to borrow and what the funds are for as well as personal information like your name, birthday and address. Then, Prosper will ask for information about your income, employment and whether you own your home before you can preview loan offers. There’s no hard credit pull at this stage.

  2. Preview loan offers and accept the one that fits your budget. Once you accept a loan offer, you’ll submit a formal personal loan application. This could require more documents, like W-2s, pay stubs and bank statements, to confirm the information you gave during pre-qualification. Prosper will also do a hard credit check when you apply, so your credit score could temporarily dip.

  3. Make a plan to repay the loan. Prosper reports payment to all three major credit bureaus, so on-time payments will help build your credit score, but missed payments will hurt it. Setting up automatic payments and watching your budget are ways to manage your loan payments.

Compare Prosper to other lenders

Personal loan lenders offer different rates, loan amounts and special features, so it pays to weigh other options. The best personal loan is usually the one with the lowest APR.

Prosper, LendingClub and SoFi are solid options for debt consolidation. But there are differences when it comes to fees and qualifying credit scores for borrowers. 

Prosper vs. LendingClub

Like Prosper, LendingClub offers personal loans to fair- and good-credit borrowers. LendingClub has a rate discount on loans for debt consolidation. Prosper accepts borrowers with lower credit scores and has a wider range of loan amounts and terms.  

Prosper vs. SoFi

SoFi and Prosper offer a wide range of loan amounts. SoFi offers personal loans without fees, but borrowers must have good to excellent credit to qualify. Although Prosper charges an origination fee, borrowers with lower credit scores can apply for a loan.

How we rate Prosper personal loans

NerdWallet writers rate lenders against a rubric that changes each year based on how personal loan products evolve. Here’s what we prioritized this year:

Affordability
An affordable loan has low rates and fees compared to other similar loans and may offer rate discounts.
Transparency
A transparent lender makes information about the loan easy to find on its website, including rates, terms and loan amounts. Transparency also means allowing users to pre-qualify online to preview potential loan offers and reporting payment information with the major credit bureaus.
Loan flexibility
A flexible loan is one that lets users customize terms and payments. That means offering a wide range of repayment term options, allowing the borrower to change their payment date, offering loans in most states and funding it quickly.
Customer experience
A good customer experience can include a fully online application process, financial education on the lender’s website and a customer service team that’s available most of the time and can be reached multiple ways.

Ready to apply? Click the button below and head to Prosper’s website to pre-qualify.

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