Prosper Personal Loan Reviews 2024: Benefits and Limitations

Did you know that Prosper Personal Loan is a good option for those looking for low-interest rates credit cards and payday loans? Seize this opportunity to learn all you should know about it.

Prosper Personal Loan Reviews

Prosper Personal Loan Review

Prosper is one of the pioneers of peer-to-peer lending, an online personal loan service that connects credit borrowers with investors who can choose to fund their personal loans.

The loans can be used for any purpose, but debt consolidation is a common practice for Prosper clients.

At present, Prosper has reached the benchmark of 1,390,000 and funded over 364 million dollars in loans.

How Does Prosper’s Personal Loan Work?

Prosper’s typical annual percentage rate (APR) is between 6.95% and 35.99%. There is also an origination fee between 2.4% and 5% taken off the top of the loan.

In other words, the amount of money you receive is the amount requested minus the origination fee.

Once approved, the loan amount will arrive in your bank account in 1-3 business days.

There’s a monthly repayment schedule that stretches over three to five years (36-to-60 monthly payments).

Prosper loans are generally pursued by consumers with good-to-excellent credit scores. The Prosper credit score minimum standard is 640, but its average is 710.

If you have poor credit, Prosper probably isn’t your best option because it would mean a high-interest rate and steep origination fee.

Pros and Cons of Prosper Personal Loans

Pros

  • Loans are available to borrowers who may not qualify with traditional banks.
  • The auction environment provides a possibility for better interest rates.
  • Soft credit inquiry allows you to apply for a loan without it affecting your credit; the inquiry only posts if you fund the loan.
  • Puts a human face on lending; borrowers can explain why they are a good investment
  • No early payoff penalties.

Cons

  • For all but the best-qualified borrowers, interest rates are still high.
  • May charge origination fee based on credit.
  • You’re limited to a 3- or 5-year loan term.

Where Prosper Personal Loan Stands Out?

Prosper Personal Loan Reviews

1. Joint Loan Option

Prosper’s platform permits two borrowers to apply together as joint applicants. Including a co-borrower with stronger credit can improve your chances of getting a loan or a lower annual percentage rate.

2. Fast Funding

Prosper says next-day funding may be available for approved borrowers, and most receive loan funds within three days upon loan authorization. While some lenders present same-day funding, one to three days isn’t uncommon.

3. Mobile App to Manage the Loan

Borrowers can apply for a loan, make payments, and monitor their credit score on the Prosper mobile app. The app is a convenient help for borrowers who manage their finances on their phones.

4. Hardship Relief Support

Prosper presents a hardship relief program that may reduce your monthly payment or extend the loan term. The relief program is in place until the borrower is financially stable once more.

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Where Prosper Personal Loan Falls Short

1. Origination and late fees: Borrowers may be levied an origination fee ranging from 1% to 5% of the loan amount.

Loan payments more than 15 days past due will attract a late fee, which is 5% of the monthly payment amount or $15, whichever is greater.

2. No rate discount for autopsy: Unlike some lenders, Prosper does not present an additional rate discount for setting up an autopsy.

The discount usually runs from 0.25 to 0.5 percentage points and motivates borrowers to pay on time.

3. No direct payment to creditors: Prosper does not forward your loan proceeds directly to creditors when you consolidate debts with a loan. Instead, borrowers have to keep track of their own repayments.

How to Apply for a Prosper Personal Loan

Here are the measures to apply for a Prosper personal loan.

1. Pre-qualify on Prosper’s website: You’ll be asked how much you desire to borrow and what the funds are for as well as personal information like your name, birth date, and email address.

Then, Prosper will request information about your income before you can preview loan offers. There’s no hard credit pull at this phase.

2. Preview loan presents and accept the one that fits your budget: Once you accept a loan proposal, you’ll submit a formal personal loan application.

This could demand more documents, like W-2s and pay stubs, to confirm the information you gave during pre-qualification.

Prosper loans will also do a hard credit check when you apply, so your credit score could temporarily dip.

3. Make a plan to repay the loan: Prosper registers payment to all three major credit bureaus (Equifax, Experian, and TransUnion) so on-time payments will help build your credit score, but skipped payments will hurt it.

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Prosper Loans Compared to its Rivals

good option for those who have bad credit

1. OneMain Financial

Offering personal loans up to $20,000, OneMain is not a peer-to-peer lender like Prosper, but it’s still a good option for those who have bad credit because there’s no minimum credit score to apply.

OneMain also gives you more flexibility in choosing your loan duration.

Interest rates are comparable to Prosper for those with bad credit, but those with a good credit score may be able to get a better deal elsewhere.

2. LendingClub

Another peer-to-peer lender that pairs borrowers and lenders, LendingClub suggests loans up to $40,000 with interest rates as low as 6.95% for those with excellent credit.

If your credit isn’t excellent, you may pay up to 35.89%. There are no hidden or prepayment costs and the interest rates are fixed.

Lending Club demands a minimum credit score of 600, though, which may put it out of reach for some borrowers.

3. Wells Fargo

If you’re seeking a bigger loan, Wells Fargo offers fixed personal loans from $3,000 up to $100,000.

You won’t be taxed any origination or prepayment fees, and if you have a Wells Fargo checking account, you could be eligible for discounts.

You can apply online and get approved in as little as 15 minutes and have the money transferred to your account the same day.

Prosper Personal Loan is a good choice if you need a loan, but don’t qualify for traditional financing.

With interest rates are fixed and reasonably comparable to most credit cards and payday loans, and there are no prepayment fees.

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