Prosper Review

Written By Jeff Hindenach
Last updated February 21, 2018

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August 11, 2017

Simple. Thrifty. Living.

For those who are not yet familiar with it, Prosper is one of the best online peer-to-peer lending companies because it provides a variety of personal loans at competitive rates. These are unsecured loans, which mean you do not have to be backed by collateral, such as your home or vehicle, in order to receive the loan.

Are you considering applying for a personal loan with competitive rates? The following is an in-depth review of Prosper for those seeking more information about this company.

Prosper Review

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  • Interest rates: Prosper’s rates fluctuate depending on your credit and other factors that it uses to determine your eligibility for a loan. The APR ranges between 6.73 percent and 35.97 percent. There is also an origination fee, which ranges between 1 percent and 5 percent. Prosper’s late fee is $15 or 5 percent, whichever is greater, and the check-processing fee is $15.
  • Loan qualifications: Unlike some other online loan services we review, you need at least a good credit score (instead of average), proof of income and a low (30 percent or below) debt-to-income ratio to get approved for a loan by Prosper.
  • Loan amounts: The maximum loan amount for Prosper is $35,000, which is in line with most other online loan providers, while the minimum loan amount is $2,000, which is not the lowest minimum among online person loan providers, but still makes Prosper a good option for those who are just looking for a quick, low-cost loan.
  • Partial loans: Prosper does offer partial loans. If your loan is at least 70 percent funded before the 14 days are up, you can choose to take the 70 percent of your loan or cancel the loan and apply again.

Rather than functioning like a financial institution, Prosper is a peer-to-peer lending company that offers competitively priced personal loans to an array of professionals. Vastly different from the majority of lending companies, Prosper caters to those with high credit scores and income. Unlike many lenders, the goal of Prosper is to offer services and resources to those who may need a bit of a push to help them achieve financial freedom. The following is an overview of the inner workings of various elements of Prosper:

Interest Rates

As you may have figured out, your rates largely depend on your personal financial status. For instance, if you have poor credit or are under employed, you may be charged higher rates, if your application is accepted at all.

Types of Loans

Moreover, Prosper offers the following financial services: debt consolidation, home improvement loans, auto and vehicle loans, green loans, military loans, short-term/bridge loans, baby and adoption loans, small business loans and even loans for special occasions.

Customer Service

Prosper also offers stellar customer service, with representatives available to help with any part of applying and managing your loan. Moreover, because the site has its own app, it is easy to keep track of your loans. Furthermore, with a variety of articles and resources available online, there is an array of ways for borrowers to get their questions answered. You can also contact customer service directly via telephone or email.

Fees and Penalties

If your financial standing is questionable or you are late on payments, Prosper uses the following penalties:

  • Origination fee: 1 percent to 5 percent of the loan amount, contingent on the borrower’s Prosper grade
  • Prepayment fee: None
  • Late fees: The greater of $15 or 5 percent of the payment amount
  • Unsuccessful payment fee: $15

What makes Prosper so unique is the fact that this site specializes in peer-to-peer lending for those who have good credit. Indeed, as one of the oldest peer-to-peer lending companies, borrowing from Prosper has become a tried-and-trusted process amongst its many customers.

Moreover, many people choose to finance their personal loans through Prosper due to the fact that the company offers some of the lowest fees on the web. Prosper typically charges just a 5 percent fee, while most other peer-to-peer lending companies charge at least a 6 percent fee. What’s more, loans can be any amount, up to $35,000, making it easy to get a hefty sum of cash in a short period of time.

Best of all, the process takes just a few days. So if you are seeking a loan, you could technically apply and receive your cash within a week’s time. Ideal for those who may have student loans and other pressing financial obligations, Prosper allows borrowers to use these funds to catch up on other bills as a means of offsetting the financial strain of repaying their debt.

On the whole, the reviews of Prosper are fairly positive. For instance, NerdWallet gave Prosper 4 out of 5 stars. One of the key features both borrowers and lenders seem to gravitate toward is the fact that people are allowed to tell others why they believe they are a worthwhile investment. Adding an individualized touch to the lending process, this is one of the main reasons people are using Prosper over banks and credit unions.

Additionally, because it’s great for those with good credit who are interested in debt consolidation, many praise Prosper for its ability to help those who are in need without necessarily being needy. A few other reviewers have asserted that they use Prosper due to the fact that the company offers loans to those who may not be eligible for a traditional loan from a bank or other financial institutions. Furthermore, many choose to apply for Prosper because they only require a soft credit inquiry, which does not negatively affect your credit score. This is important for those who are trying to find ways to fix their credit in general.

On the flip side, there are also a few downsides to Prosper. For instance, despite the fact that their rates are competitive, they still seem to be a tad higher than the average borrower wishes to pay. Based on your credit score, you may be charged an additional fee as a means of securing the loan, although this is said to be atypical. Borrowers are also limited to a three- to five-year loan term, which is not always ideal for those who may need larger loans or who may require a bit extra time to repay them. Either way, the average Prosper review is fairly positive, with just a few issues with regards to the process.

Although there is a vast array of benefits of getting a loan from Prosper, being the best peer-to-peer lending company means they must exercise some discretion with regards to who can participate in the program.

First, those who are accepted for a Prosper loan must have excellent credit. In fact, the minimum score allowed is 640, while the average customer has a credit score of at least 710. Therefore, these loans are not meant for those who are not in the position to immediately begin paying the loan back.

Second, you must also have substantial income. Given the fact that this company does not give any leeway with regards to missed payments, it would only make sense to ensure that each borrower is capable of paying back the loan. Although there is technically no minimum requirement for income, the average borrower has at least an annual income of $84,600.

Moreover, this is a perfect option for those who are strapped for time as well. As previously mentioned, it only takes a few days to get approved and the application only takes a few minutes to complete, while money is typically disbursed within a week or less.

The Bottom Line

Overall, Prosper is an excellent company for those who are in fairly good financial standing but may need some additional help. Although no peer-to-peer lending company is without its issues, the average Prosper review includes a mostly favorable outlook on the company. Whether you need a personal or business loan, Prosper offers competitive rates and quick service from a collective of supportive professionals. Borrowing from Prosper is also simple and offers the peace of mind that only a highly accredited finance company can. Therefore, for hard-working people who may be experiencing some financial hardships and simply need a little extra cash in order to fix their circumstances, Prosper may be the perfect solution.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Simple. Thrifty. Living. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of financial journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing on personal finance for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

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