Prosper is a peer-to-peer lending platform. It matches borrowers looking for personal loans with investors, and its lending qualifications aren’t as stringent as some traditional lenders. While Prosper could be a good option for borrowers with fair credit, other lenders may offer fewer fees and lower APRs.
- Pros & Cons
- Key Takeaways
Low minimum interest rate
Quick funding available
Allows joint applications
Only available in 19 states
High maximum annual percentage rate (APR)
- Prosper allows you to check your rates and terms without impacting your credit score.
- Your loan request is funded by individual or institutional investors.
- The lowest loan amount Prosper offers is $2,000; the maximum loan amount is $40,000.
- APR Range 7.95% to 35.99%
- Loan Amounts $2,000 to $40,000
- Loan Terms 3 or 5 years
- Recommended Minimum Credit Score 640 FICO score
- Average Origination Fee 2.41% to 5%
- Late Fee $25 (2% interest rate increase if payments are 60 days late)
- Low minimum credit score requirement: Some lenders require that borrowers have good credit to qualify for a personal loan. By contrast, if your credit score is at least 640, which is considered a fair credit score, you might qualify for a personal loan with Prosper—provided you meet other eligibility requirements.
- Quick funding available: Once you qualify, accept a loan offer, and receive final approval, funds may be deposited into your bank account as soon as the next business day.
- Allows joint applications: Prosper allows you to apply for a personal loan with a co-borrower. Applying with a co-borrower who has strong credit could help you qualify for a personal loan at a lower interest rate.
A co-borrower is different from a co-signer. A co-signer is someone who agrees to repay a loan if you default. By contrast, a co-borrower is someone who is equally responsible for repaying the loan and shares access to the loan proceeds.
- Limited repayment terms available: Prosper only offers two repayment terms: three and five years. If you prefer a longer repayment period, you’ll have to choose another lender.
- Charges fees: Prosper charges an origination fee ranging from 2.41 to 5% of your total loan amount for processing your loan. This amount is deducted from your loan proceeds. In addition, if you make a late payment, you’ll be charged $15 or 5% of the loan amount, whichever is greater.
- High maximum APR: Although you might qualify for a Prosper personal loan with a fair credit score, you could end up paying an APR as high as 35.99%.
Prosper is a peer-to-peer lender that offers personal loans and home equity loans. Its platform matches borrowers seeking personal loans with investors.
To qualify for a Prosper personal loan, borrowers need an annual income greater than $0, a debt-to-income (DTI) ratio that’s 50% or below, and a credit score that’s at least 640. Prosper offers loans from $2,000 to $40,000 with APRs ranging from 2.41% to 35.99%, and you can choose a 3- or 5- year repayment term. This lender may be a good option for fair-credit borrowers who want to consolidate high-interest debt or pay for small expenses.
Your DTI ratio compares your gross monthly income against your monthly debt payments. To calculate it, divide your monthly debt payments by your gross monthly income. For instance, if your monthly income is $2,000 and your monthly debt payments are $1,000, then your DTI ratio is 50%.
Prosper is a leader in the peer-to-peer lending space. It was founded in 2005 and is headquartered in San Francisco, California.
Prosper offers fixed-rate personal loans that are funded by institutions and individual investors. Since its inception, it’s issued more than $20 billion in loans to over 1,160,000 people.
Types of Personal Loans Offered by Prosper
Prosper offers a variety of personal loans that can be used for almost any purpose, including:
- Medical expenses
- Home improvement
- Debt consolidation
However, loan funds cannot be used to pay for post-secondary education.
While Prosper’s credit score requirements may be lower than some competitors, borrowers must meet other eligibility criteria to qualify for a loan. In addition to having a credit score of at least 640, a DTI ratio that’s 50% or less, and an annual income that’s greater than $0, borrowers need to meet these requirements:
- No bankruptcies filed within the last year
- A minimum of three accounts listed on your credit reports
- Fewer than five hard credit inquiries within the last six months
Time to Receive Funds
Prosper indicates that the loan review and approval process can take up to five days. After receiving final approval, you may receive your funds in one to three business days.
Prosper Personal Loan Features
When you pre-qualify, Prosper gives you an estimate of your rates and terms by performing a soft credit inquiry, which has zero impact on your credit score. This can be useful if you are comparing loan options with different lenders to find the best rates and terms.
Adjustable Monthly Due Date
You can change your monthly payment due date by logging into your Prosper account or calling customer service. This could help you avoid making a late payment.
No Prepayment Penalty
If you choose to repay your Prosper personal loan early, you can save money on interest without incurring a prepayment penalty.
Use Loan Proceeds for Almost Any Purpose
You can use your loan proceeds for almost any purpose, except funding post-secondary education.
Apply for a Prosper Personal Loan
To qualify for a Prosper loan, you’ll need to meet certain eligibility requirements. You’ll also need to pre-qualify before submitting your full loan application online.
After completing the pre-qualification process, follow these steps to apply online:
- Complete the online loan application: To complete your loan application, you’ll need to share your personal and financial information, such as your Social Security number, loan purpose, and loan amount.
- Wait for Prosper to review your loan application: If supporting documents, such as pay stubs, tax returns, or bank statements, are needed, a Prosper representative will contact you.
- Review loan terms: If you’re approved, review your loan terms and sign your loan agreement.
- Receive your funds: Funds are typically disbursed via direct deposit within one to three business days.
Can You Refinance a Personal Loan with Prosper?
Prosper doesn’t offer personal loan refinancing. However, you’re allowed to take out more than one personal loan with Prosper, provided that you meet these requirements:
- The total amount you borrow doesn’t exceed $40,000
- Your existing loan is current
- You’ve made six on-time payments.
Prosper’s borrowers' service department is available by phone Monday through Friday from 9:00 a.m. EST to 8:00 p.m. EST. You can reach a representative by dialing 1-866-615-6319. In addition, Prosper offers email support for borrowers. You can reach out to its support team by emailing firstname.lastname@example.org.
Prosper’s customer reviews are largely positive. It has an excellent 4.6 out of 5-star rating on Trustpilot based on 7,800+ reviews. Several reviewers praise Prosper’s customer service and streamlined lending process. However, negative reviews mention challenges with the approval process and high APRs.
Prosper offers a user-friendly online dashboard where borrowers can review their personal loan details. You can also choose to set up autopay or make payments through your online account, or by phone, personal check, cashier’s check, or money order.
While Prosper does offer a pair of mobile apps. One designed for investors, the other borrowers.
How Prosper Compares to Other Personal Loan Companies
Compared with other lenders, Prosper offers a competitive low-end APR for well-qualified applicants. Also, similar to other online lenders, it allows you to check your rates and terms without impacting your credit score.
However, Prosper charges origination fees, while some other lenders don’t. Its maximum APR is also high compared with other lenders. Plus, some competitors offer more flexible repayment terms.
Prosper vs. LendingClub
LendingClub, a Prosper competitor, also offers personal loans with 3- or 5-year terms and maximum loan amounts up to $40,000. However, there are some differences between the two lenders:
- LendingClub’s current lowest advertised APR is lower than Prosper’s; borrowers who have excellent credit may qualify for rates as low as 7.04%.
- With LendingClub, borrowers can apply for loans as small as $1,000, while Prosper’s minimum loan amount is $2,000.
Read our comprehensive LendingClub review.
|APR Range||7.95% to 35.99%||7.04% to 35.89%|
|Loan Amounts||$2,000 to $40.000||$1,000 to $40,000|
|Loan Terms||3 or 5 years||3 or 5 years|
|Minimum Recommended Credit Score||640||600|
|Late Fee||$15 or 5% of the payment amount (whichever is greater)||$15 or 5% of the payment amount (whichever is greater)|
Prosper is a peer-to-peer lending platform that offers personal loans to borrowers. To qualify, you need a credit score of 640 or above and an annual income greater than $0. Prosper's flexible requirements make its personal loans more accessible to borrowers with less-than-stellar credit histories or minimal income.
However, Prosper might not be the best option for everyone. It charges origination fees and late fees that can increase your borrowing costs. If you choose a lender that doesn’t charge these fees, you could potentially save money.
Also, since Prosper relies on investors to fund your loan, there’s no guarantee you’ll receive funds quickly. Some other lenders offer same-day disbursement of loan funds after approval. If you need funds quickly, Prosper may not be your best option.
Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of personal loan lenders. We collected over 25 data points across more than 50 lenders including interest rates, fees, loan amounts, and repayment terms to ensure that our content helps users make the right borrowing decision for their needs.
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Experian. "Debt-to-Income Ratio - Experian." Accessed Jan. 23, 2022.
Prosper. "About Prosper." Accessed Jan. 23, 2022.
Prosper. "What Is the Loan Review Process? How Long Does It Take?" Accessed Jan. 23, 2022.
Prosper. "Help and Support." Accessed Jan. 23, 2022.
Prosper. "Can I Change the Day My Payment Is Due?" Accessed Jan. 23, 2022.
Prosper. "If I Have An Existing Loan, How Long Should I Wait Before I Reapply?" Accessed Jan. 23, 2022.
Trustpilot. "Prosper Reviews." Accessed Jan. 23, 2022.
LendingClub. "Personal Loans." Accessed Jan. 23, 2022.