Prosper Personal Loans Review

There are many reasons you might need a personal loan and for each reason, there are a whole host of options when it comes to which lender you should work with. There are so many reputable lenders, each with their own series of pros and cons, and it might be complicated to sift through all of the information and decide which one is the best fit for you.

If you’re considered Prosper for your personal loan but aren’t sure if it’s right for you, you’re in luck. This review covers the basic information that you need to know to make the decision as to whether or not Prosper is the right fit for your financial situation.

Prosper Loans Highlights:

• Loans between $2,000-$40,000
• Best for those with a credit score between 630 and 719
• Offers financial education
• No early payment penalties
• Home equity loans available

What is Prosper?

Prosper is the first peer-to-peer lending marketplace in the United States. Since they formed in 2005, Prosper has facilitated more than $19 billion in loans to more than 1,160,000 people.

How Does Prosper Work?

Prosper is a peer-to-peer lending market place which means they connect you with potential lenders and usually their loan offerings are easier to qualify for. However, this often means the rates and fees are higher. They collect a variety of information from you when you apply to determine your “Prosper Score” which is then used to match you with lenders who can offer you loans. Apart from that, it functions like any other loan service where you receive your funds and pay it back over a course of time with fixed monthly payments.

Prosper Rates and Fees

What Type of Personal Loans Does Prosper Offer?

Personal loans with Prosper are used primarily for:

• Debt Consolidation
• Home Improvement
• Medical Expenses
• Short Term & Bridge Loans
• Car Loans
• Small Business Loans
• Wedding Loans
• Baby & Adoption Loans

Prosper Pros and Cons

Compare Prosper vs. other personal loans

Who Should Use Prosper?

Prosper is a great option for personal loans for those who have a fair to good credit and at least two years of credit history to demonstrate the ability to handle loans and make payments on time. If you’re interested in home equity financing you’ll also be able to apply for that through Prosper.

Borrowers who want to add a co-borrower when they apply can also find options that suit them and their needs through Prosper.

What Are Some of the Benefits of Using Prosper?

Home equity credit

Borrowers in certain states can apply for a Home Equity Line of Credit through Prosper although the specific rates and terms may vary and be different to the rates and terms for the personal loans they offer. These are available for residents of  Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas.

Payment date adjustment

During your repayment period, you will have the option of changing your payment date. This may not seem like a huge bonus, but if you're running out of time and won't be able to make your monthly payment, it might mean you get to avoid a late fee.

No early payment penalties

It might seem ridiculous that lenders would charge you for being able to pay off your loan early, but some do. Prosper is not one of them. Paying off your loan early shows responsibility and they do not believe you should face any negative consequences for doing that.

Joint loans available

You can apply with a co-borrower to increase your chances of qualifying for a loan. The primary borrower has to meet the standard criteria for a Prosper personal loan but the secondary applicant may be able to qualify with a lower threshold.

What Are Some of the Downsides to Using Prosper?

Origination fees

Prosper charges an origination fee that is between 2.41% to 5% of the total loan amount. This might seem like a small percentage but it might end up being a few thousand dollars depending on your loan amount. Usually these origination fees are deducted from your loan funding so you won’t have to pay for them separately but it can affect the amount you receive in significant ways.

Slower funding time

Although many loans through Prosper are funded in under 24 hours, the average wait time is around three business days. This is longer than average.

No discounts for autopay

Although some lenders will offer you a discount if you set up autopayments for your monthly charges, Prosper does not. Usually these discounts will be under 1% so you won’t be missing out on significant amounts of cash but a dollar is still a dollar and you may prefer a lender where you can get some kind of discount.

Limited loan terms

Personal loans through Prosper are offered only on a three or five year basis. If either of those options fits your need this may not be a downside but Prosper will not offer you flexibility if you need it.

No mobile app

Prosper does not offer an app which can make managing your loan on the go complicated. They do offer a website that is optimized for mobile devices so you won’t be completely out of luck but the lack of a mobile app may be a deterrent for some.

Do I Need a Credit Check to Take Out a Loan With Prosper?

When you are ready to accept an offer, Prosper will perform a hard credit check, but this does not have to happen until you are committed to taking out a loan with them. They will do a soft credit check throughout the prequalification procedure, which will not affect your credit score.

Does Prosper Cost Any Money?

It is completely free to apply for a personal loan with Prosper but you will likely need to account for origination fees and late fees. The APR they offer with their loans are typically higher than average when compared to similar lenders.

Where Does Prosper Operate?

Prosper offers personal loans to residents of the United States except for those who live in Iowa and West Virginia.

How Is Prosper’s Customer Service and Support?

Prosper offers great customer service although it is only available on weekdays during specific hours. If you need help outside of those hours you will have to send them an email they will reply to during their standard work hours.

Prosper’s Customer Service phone line hours are:

• Monday through Friday: 9:00 AM - 8:00 PM EST

How to Qualify for a Prosper Personal Loan

While Prosper can offer loans to a variety of borrowers, there are several minimum requirements that you must achieve prior to being offered loans.

• Credit score of at least 600 although most borrowers have a score above 700
• Minimum credit history of at least two years
• No minimum income requirement
• No bankruptcies within the last year
• At least three open accounts in good standing
• Less than five hard inquiries on credit report
• Must be at least 18 years old
• Social security number and U.S. bank account required

How to Apply for a Prosper Personal Loan

When you decide you’re ready to apply for a personal loan through Prosper, you’ll simply head to their website and fill out a form that collects your basic information as well as data that will help them assign you a Prosper score. This Prosper score is used by lenders to determine if they would want to offer you a loan or not. If there are loan options available to you, you will find out very soon after applying and at that point you will be able to accept the offer that’s right for you.

Is Prosper Legit and Trustworthy?

Yes, Prosper is a legitimate lender and you can trust them to deliver on their promises and keep your information secure. They have an A+ rating with the Better Business Bureau even though a large number of their reviews are negative, citing fees and difficulty getting hardship relief. Prosper also includes an automated selection of reviews from TrustPilot on their homepage and invites you to browse all of their reviews. They hold a 4.6 rating on TrustPilot and have plenty of reviews from satisfied customers that you can read.

Conclusion

Prosper is a fitting loan option for anyone who has a fair to decent credit score and needs funds quickly but not too quickly as the funding time can take up to three full days. While there are plenty of benefits to taking out a personal loan with Prosper, there are origination fees, late fees, and high APRs to watch out for.