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Prosper has been around since 2005 and has originated over $21 billion of loans to 1.27 million people. While personal loans are by far the core product offered by Prosper, the company also offers home equity loans and credit card products to help meet customers' full borrowing needs.
Prosper loans are different from most personal loans in the sense that Prosper is a peer-to-peer lending platform. In other words, Prosper doesn't directly loan money itself, but it connects borrowers with investors (both individuals and institutions) who invest in the loans to earn interest income. Prosper matches borrowers with investors, and also services the loans it originates.
Prosper is a solid option for borrowers with moderate to good credit, but it does have a few drawbacks, including potentially high APRs and origination fees.
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This personal loan is a good fit for: Borrowers with moderate to strong credit histories who need to borrow up to $50,000.
Prosper offers several features that might appeal to personal loan borrowers, and just to name a few of the standouts:
Wide range of loan amounts: Prosper offers personal loans in amounts ranging from $2,000 to $50,000. While the $50,000 upper limit isn't exactly the highest in the industry, it is sufficient for most borrowers. And on the lower end, $2,000 is less than many competitors are willing to loan.
Next business day funding: Prosper funds its loans as soon as one business day following final loan approval. To be clear, this is when Prosper sends the money -- the timetable for it to actually show up in your bank account depends on their processes as well.
Easy to check rates online: Prosper makes it easy for borrowers to get personalized rate offers without affecting their credit score. The online pre-qualification process takes just a couple of minutes and performs a soft credit check to reveal a variety of loan options.
Co-borrowers are allowed: Prosper is among the few personal lenders that allow joint loan accounts. For example, if you and your spouse wanted to apply for a loan together, that's an option. Or, if your credit isn't particularly strong, you can use a creditworthy co-borrower to qualify for better loan terms.
Several loan purposes: Prosper offers personal loans for three specific purposes -- debt consolidation, healthcare expenses, and home improvements. The process of getting these loans are identical to one another, all have the same loan minimums and maximums, and in all cases the money is distributed to the borrower's bank account just one business day after accepting a loan offer. It's also worth noting you can use personal loan proceeds for just about anything you want -- after all, the entire concept of personal lending is that the loan isn't backed by any specific asset (like a mortgage is backed by a home).
There's no such thing as a perfect lender for everyone, and Prosper isn't an exception. While there are several things to like about Prosper's lending process, here are a few potential drawbacks:
High APR range: The APR given to each particular borrower depends on a variety of factors, but Prospers rate on both the low and high ends of the spectrum are relatively high. And to be clear, these APRs include Prosper’s origination fee.
Origination fees: All loans made by Prosper have origination fees, which vary from 1% to 7.99%, depending on the borrower. These are included in the quoted APR, but the important thing to understand is that these origination fees are deducted from the loan proceeds before they are distributed. In other words, a $10,000 loan with a 5% origination fee would result in $9,500 being deposited into your bank account.
No guarantee of loan funding: As Prosper is a peer-to-peer lending platform, it relies on individual and institutional investors to fund loans. Because of this, even if you're approved for a loan, there’s no guarantee your loan will have enough backers in a timely manner, or even at all. This is rarely an issue in practice, but it's worth noting.
In order to qualify for a personal loan through Prosper, you must be a creditworthy borrower, meaning that your income, other debts, and credit situation meet Prosper's minimum standards. And while it is only one piece of the puzzle, Prosper makes it clear that a credit score of 560 or higher is needed to qualify. To sum it up, here's what you'll need to qualify for a personal loan:
If you don't have all of these qualifications, it's also worth mentioning that Prosper allows co-borrowers. This means that if you don’t qualify on your own, you can apply along with a creditworthy individual in order to meet these requirements. It also means that if you want to, you can apply for a loan jointly, such as with a spouse.
Prosper's application process is similar to that of most personal lenders:
It's also worth mentioning that if you decide to accept a personal loan offer through Prosper, a hard credit inquiry will take place as part of the final approval process. This is standard practice throughout the industry.
Prosper personal loans aren't right for everyone, as they have relatively high origination fees and a higher APR range compared to most rivals. However, with the ability to check your loan offers for free, Prosper is a solid lender to include on your short list.
While Prosper considers an applicant's entire list of qualifications, it requires a minimum credit score of 560 to consider someone for a loan.
A credit score requirement of 560 is certainly on the lower end for the personal loan industry, so as long as an applicant has credit above this threshold, stable employment, and a debt-to-income ratio that meets Prosper's standards, it isn't terribly hard to get a loan. It's also worth mentioning that Prosper allows co-borrowers, so even if an applicant doesn't meet the standards, they can still get a loan along with a joint applicant.
Obtaining a new personal loan from Prosper (or anywhere else) can hurt your credit in the short term. New accounts and credit inquiries are two potentially negative items in the FICO® Score formula. However, any negative impact is likely to be temporary, as long as you pay your loan on time every month. In fact, making regular payments on an installment loan can be a great way to build credit over time.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Citi Personal Loan disclaimer:
**Rates as of 05-31-2024. Your APR may be as low as 11.49% or as high as 20.49% for the term of your loan. The lowest rate quoted assumes excellent credit and a loan term of 24 or 36 months. Your APR will depend on a variety of factors including your creditworthiness, term of loan, and existing relationship with Citi. For example, if you borrow $10,000 for 36 months at 15.99% APR, to repay your loan you will have to make 36 monthly payments of approximately $351.52.
There is a 0.5% APR discount if you enroll in automatic payments at loan origination. Additionally, existing Citigold and Citi Priority customers will receive a 0.25% discount to the interest rate. If you are in default, your APR may increase by 2.00%. No down payment is required. Rates subject to change without notice.
You must be at least 18 years of age (21 years of age in Puerto Rico). Co-applicants are not permitted. Loan proceeds cannot be used for post-secondary educational or business purposes.
If you apply online, you must agree to receive the loan note and all other account disclosures provided at loan origination in an electronic format and provide your signature electronically.
Credit cards issued by Citibank, N.A. or its affiliates, as well as Checking Plus and Ready Credit accounts, are not eligible for debt consolidation, and Citibank will not issue payoff checks for these accounts. If you are unsure of the issuer on the account, please visit https://www.citi.com/affiliatesproducts for a list of Citi products and affiliates.
*Upstart Loan Disclaimer
The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.
Rates quoted are with AutoPay. Your loan terms are not guaranteed and may vary based on loan purpose, length of loan, loan amount, credit history and payment method (AutoPay or Invoice). AutoPay discount is only available when selected prior to loan funding. Rates without AutoPay are 0.50% points higher. To obtain a loan, you must complete an application on LightStream.com which may affect your credit score. You may be required to verify income, identity and other stated application information. Payment example: Monthly payments for a $10,000 loan at 8.49% APR with a term of 5 years would result in 60 monthly payments of $205.12. Some additional conditions and limitations apply. Advertised rates and terms are subject to change without notice. Truist Bank is an Equal Housing Lender. © 2024 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.