Prosper Loan Reviews: Everything You Need to Know

In today’s financial landscape, personal loans have become a go-to solution for many individuals seeking to consolidate debt, finance home improvements, or cover unexpected expenses. With many lending options available, choosing the right lender can be overwhelming. Prosper, a pioneer in peer-to-peer lending, stands out as a viable option for those with fair credit scores who need access to relatively small loan amounts. This comprehensive review delves into the details of Prosper loans, including who they are best suited for, loan specifics, costs, perks, qualifications, application processes, and customer reviews.

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Who Is Prosper Best For?

Prosper is an ideal option for borrowers with fair credit scores looking to borrow small amounts of money. The minimum loan amount is just $2,000, making it accessible for those who need a modest loan. Prosper requires a minimum credit score of only 640, which is relatively low compared to many other lenders. This makes it a viable option for individuals who may not have excellent credit but still need financing.

Despite a maximum annual percentage rate (APR) of almost 36%. The average APR between January and May 2021 was significantly lower at 16.37%. This indicates that while the highest rates are steep, the typical borrower might secure a more reasonable rate. APRs start at 7.95%, meaning highly qualified applicants might find more competitive rates elsewhere. Prosper loans are repayable only over three or five years, which is less flexible compared to other lenders that might offer a broader range of terms. Also, Prosper personal loans are unavailable in Iowa, West Virginia, or U.S. Territories.

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Prosper Loan Details

Loan Amounts & Terms

Loan Amounts: Prosper offers personal loans ranging from $2,000 to $50,000. Based on January through May 2021 data, the average loan amount is on the lower end at $13,500.
Loan Terms: Borrowers can choose from three or five-year loan terms. This limited range of repayment periods is less flexible than many top lenders, which often offer more varied options to suit different financial situations.

Personal Loan Cost

Prosper personal loans come with various costs that borrowers should consider:

Interest Rates:** The APR for Prosper loans ranges from 7.95% to 35.99%. The rate you receive depends on your creditworthiness and other factors. While the maximum APR is high, the average APR, as noted earlier, is around 16.37%.

• • Origination Fee: Prosper charges an origination fee between 2.41% and 5% of the loan amount. This fee is deducted from the loan proceeds before you receive the funds.

• • Late Fees: If a payment is not made within 15 days of the due date, a late fee of $15 or 5% of the unpaid instalment amount (whichever is greater) will be charged.

• • Check Processing Fee: If you choose to make payments by check, there is a $5 fee per payment.

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Perks & Features

Prosper offers several perks and features that can be beneficial for borrowers:

Joint Loans: Prosper allows joint applications, which can increase the chances of approval and potentially secure a better interest rate.

Fast Funding: Once approved, funds can be deposited into your account within the next business day.

Prequalification: Borrowers can check their rate without impacting their credit score. This soft pull gives you an idea of the potential terms before formally applying.

No Prepayment Penalty: You can pay off your loan early without incurring any additional fees. Which can save on interest costs over the life of the loan.

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How to Qualify for a Prosper Loan

To qualify for a Prosper loan, applicants need to meet the following criteria:

• • Credit Score: A minimum FICO score of 640.

• • Debt-to-Income Ratio: Prosper requires a maximum debt-to-income ratio of 50%, including the potential new loan.

• • Income: You must have a source of income, but Prosper does not disclose a minimum income requirement.

• • Credit History: Applicants should have fewer than five credit bureau inquiries (excluding mortgage, student, and auto loan inquiries) in the last six months.

• • Other Requirements: You must be at least 18 years old, a U.S. citizen or permanent resident, and have a valid Social Security number.

How to Apply for a Prosper Loan

The application process for a Prosper loan is straightforward:

• • Prequalify: Start by checking your rate online. This involves a soft credit check that does not affect your credit score. You must provide basic information such as the loan amount, purpose, and credit score range.

• • Choose Your Loan: If you prequalify, you’ll receive several loan options with different rates and terms. Select the one that best fits your needs.

• • Complete the Application: Provide more detailed information, including your Social Security number, employment details, and income.

• • Submit Documentation: Prosper may request documents to verify your information, such as pay stubs, tax returns, or bank statements.

• • Get Funded: Once your application is approved and backed by investors, the funds can be deposited into your bank account within the next business day.

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Reviews on Prosper Loan Company

Prosper has garnered various reviews from its users, reflecting both positive experiences and areas for improvement. Here’s a summary of common themes in customer feedback:

Positive Reviews

• • Ease of Use: Many customers appreciate the straightforward online application process and the ability to check rates without impacting their credit score.

• • Fast Funding: Borrowers often highlight the quick disbursement of funds, sometimes as soon as the next business day.

• • Competitive Rates: Some users with good credit reports received competitive rates that were lower than expected.

• • Prosper Customer Service Team: Prosper’s customer service team is praised for being helpful and responsive throughout the loan process.

Negative Reviews

• • High Fees: Some borrowers express dissatisfaction with the origination fee, which can be as high as 5% of the loan amount.

• • Interest Rates for Lower Credit Scores: Individuals with fair credit sometimes find the interest rates offered to be higher, approaching the maximum APR.

• • Limited Loan Terms: The three and five year repayment terms are viewed as less flexible than those offered by other lenders, who offer a more comprehensive range of term lengths.

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Is Prosper Loans Legit?

Yes, Prosper Loans is a legitimate and reputable lending platform. It was established in 2005 as the first peer-to-peer lending marketplace in the United States, allowing borrowers to secure personal loans funded by individual and institutional investors. Prosper is headquartered in San Francisco, California, and is regulated by the Consumer Financial Protection Bureau (CFPB) and other state regulators.

Key Points Supporting Prosper’s Legitimacy:

• • Regulated Platform: Prosper operates under strict regulatory oversight to ensure fair lending practices.

• • Transparent Fees: All fees and rates are disclosed upfront, so borrowers know exactly what they’re signing up for.

• • Established History: With nearly two decades of operation, Prosper has facilitated over $18 billion in loans.

• • Investor Backing: Loans are funded by diverse investors, adding to the platform’s credibility and stability.

Conclusion

Prosper Loans is a solid choice for borrowers with fair credit looking for personal loans between $2,000 and $50,000. While it offers competitive average APRs and a user-friendly application process, the loan terms could be more flexible, and the fees can be relatively high. The ability to prequalify without a hard credit check and the option for joint applications make it a versatile choice for many potential borrowers.

It’s crucial to compare multiple lenders and consider all costs associated with the loan to ensure you choose the best option for your financial situation. Prosper’s transparency and ease of use make it a compelling choice, especially for those who may have needed help securing loans through traditional banking channels.

FAQs:

Q1: What types of loans does Prosper offer?

A: Prosper offers personal loans, typically ranging from $2,000 to $40,000. These loans can be used for various purposes including debt consolidation, home improvement, medical expenses, and more.

Q2: What are the eligibility requirements to get a loan from Prosper?

A: To be eligible for a Prosper loan, you must be at least 18 years old, have a valid Social Security number, a bank account, and a minimum credit score of 640. Other factors such as credit history, income, and debt-to-income ratio are also considered.