Prosper was the first of the online peer-to-peer lending websites as it was founded in 2005. Since then it’s helped more than 250,000 people get loans. It currently has more than two million members on its site and facilitated loans totaling $1.6 billion just in 2014. Prosper offers both personal and personal-for-business loans and for just about any purpose. It provides loans from $2,000 to $35,000.
A person interested in borrowing money on Prosper first fills out a simple form. Prosper then rates the person based on her or his credit score from Experian, which must be at least 640, and a second credit score proprietary to Prosper. Applicants must also have a debt-to-earnings ratio of 30% or less.
Prosper assigns an interest rate based on its Prosper Rating. You will see this interest rate before you are required to fill out the full application. This can be very helpful because if you were to be given a very high interest rate you might decide to not continue with the loan process.
The Prosper Loan Application process
For a person seeking a loan from Prosper the next step is creating a custom loan listing with a title, the amount of money requested, how the money will be used and some information about his or her financial situation.
This listing is posted on Prosper’s platform for prospective investors to review. The funding process may take as long as two weeks during which time investors review and contribute to the loan. If the loan is fully funded before 14 days the money is deposited into the borrower’s checking account. If funding does not reach 100% in 14 days but does exceed 70%, the borrower can choose to accept the lesser amount. If the loan is not funded to at least 70% it will not be funded at all. However, if this is the case you are allowed to reapply.
If the loan is funded and the person’s information passes Prosper’s three-stage verification process the borrower typically gets the money in a day or two. It will be directly deposited into the borrower’s checking account.
Low rate personal loans to consolidate debt
It’s possible to get a Prosper loan for just about any purpose including debt consolidation, home improvement, buying a new or used auto or to finance environmentally friendly projects. Its loans are unsecured, as they require no collateral. The terms are three or five years. Prosper’s interest rates start as low as those of most marketplace lenders but have a top rate that’s higher than those of most other lenders.
The interest you are offered will depend on your Prosper Rating (as explained above) and can be as low as 5.99% or as high as 35.97%. In comparison many other similar lenders have interest rates that top out at 30%. In addition to these attractive rates is the fact that Prosper charges no penalties for paying off a loan early or for making partial prepayments.
Prosper does not offer business loans but does offer personal-for-business loans. These loans also have terms of three or five years and fixed payments. Since these are personal and not business loans borrowers are not required to provide any specifics about their businesses. The interest rates on personal-for-business loans are the same as for personal loans and range from 5.99% to 35.97%.
Prosper Loan Fees
If you get a loan through Prosper it’s likely that you’ll have a slightly higher APR as compared with other similar marketplace lenders. However, its fees are very similar to those of its competitors. Your origination fee will be between 1% and 5% of the loan’s value, again depending on your Prosper Rating. This fee is deducted from the total loan amount before funds are deposited into your checking account. Late fees are the greater of $15 or 5% of the amount that’s overdue. Prosper also charges $15 for unsuccessful payments. While Prosper does charge borrowers for late payments there is a 15-day grace period before this charge kicks in.
You can contact the company’s customer support department via telephone and its representatives are said to be knowledgeable and helpful. It is not possible to get email support from Prosper unless you are a registered member. However, once you apply for a loan you will be able to get support via email.
Prosper Loan Review Summary
Prosper represents a very good choice for a peer-to-peer loan. It has an established name and history and makes loans available for a variety of purposes. Prosper’s interest rates are competitive and its fees are reasonable. Prosper’s three-state verification process is very transparent and makes it easy for borrowers to track the progress of their loans. This process is clearly explained on Prosper’s website.
Prosper has a strong reputation with the Better Business Bureau with an A+ rating. On the downside Prosper loans are not available in all state. While they are available to people in most states, those living in North Dakota, Maine or Iowa will not be able to get a loan from Prosper.