Prosper Personal Loans 2021 Updates: Everything You Should Know

Prosper Personal Loans is a good option for those who are looking for good vibes of low-interest rates offered by credit cards and payday loans. However, in this article, we will dive deep into everything you need to know about prosper loans.

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

It’s an excellent option if you have substantial debt, along with a high income (the average for Prosper borrowers is about $89,000).

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

About Prosper Loans

Introduced in 2006, Prosper was the first p2p lending platform that helps good credit borrowers to find investors who can raise funds for their loan.

The U.S. based company is known for providing an unsecured personal loan of up to $35,000 US dollars for meeting debt consolidation, home renovation, organizing any event or for the credit card pay off.

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

Pros and Cons of Prosper Loans 

Pros

• Loans are available to borrowers who may not qualify with traditional banks
• 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 have the ability to 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

How Does Prosper 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 at 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.

Types Of Loans That Prosper Offer

Prosper offers a broad range of loans and loan amounts. These loans are all unsecured, and this means you won’t have to come up with any collateral to be eligible.

1. Auto and Vehicle Loans. These loans are used for emergency repairs, unexpected costs, or to purchase a new or used vehicle.

2. Debt Consolidation Loans. This is one of the most popular loans Prosper offers. Debt consolidation loans are used to get out of credit card debt and streamline many monthly payments into one easy payment.

3. Green Loans. Prosper’s green loans are used to finance environmentally friendly projects. They can also be used for green housing or business upgrades like solar panel installation.

4. Home Improvement Loans. These loans can be used to renovate your home or improve existing issues.

5. Military Loans. Prosper takes the hassle of active duty military personnel applying for loans. These loans can be accessed from anywhere and can be used to cover moving expenses, home improvements, or new household items.

6. Short Term or Bridge Loans. Sometimes you just need a small, short-term loan you can repay within 3 to 5 years. Prosper offers those as well.

Prosper Personal Loans Details

• • Loan period of 3 or 5 years
  • APR range to 5.99% – 35.99%

• Loan amounts lie in $2,000 – $35,000
• Funds are received within one to three business days after approval

Prosper Loan Requirements

• A minimum credit score is 640
• 710 average FICO score of Prosper borrowers
• Minimum credit history is 2 years
• Borrowers average is 11 years
• Maximum debt-to-income ratio is 50% (excluding mortgage)

Fees and Penalties Charged by Prosper

• The origination fee is 1% to 5%
• No prepayment penalties
  • In case of late fees, the greater of $15 or 5% of the payment amount will be charged
  • Unsuccessful payment fee of $15
• No personal-check processing fees

Prosper Loan Approval Process

Prosper’s user-friendly website makes it easy for borrowers to apply for a loan in less than 10 minutes. Here are the steps one needs to follow:

• The pre-qualification step involves creating a loan list and choosing the desired rate of interest on which he/she want to receive a loan.

• After creating the loan list, the interested investors will then commit funds to the created listing. In this step, a loan request is sent to all the investors.

• Once the investor commits to lend their money for the loan applied, the borrower will receive the money shortly.
• After receiving the loan, all the borrower need to do is to set up monthly payments to pay back the loan.

Other Benefits Offered

• The borrower can take loan or credit even without going to the bank or to the high-interest loan companies. Prosper helps in lending the loan through online process only.
• The process of applying for a loan online is quite easy. Step by step guidance is provided while filling for the loan application form.
• The entire process is quite easy and hassle-free than the traditional loan applying process. Documentation and formalities are minimal as compared to other companies.
• There is a chance to get a loan approve even if the borrower credit is bad. The borrower is given a chance to explain what happened and why, which is certainly not possible in the case of the local banks.

Prosper Loans Compared

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

2. LendingClub 

Another peer-to-peer lender that pairs borrowers and lenders, LendingClub offers loans up to $40,000 with interest rates as low as 6.95% for those with excellent credit. If your credit isn’t great, you may pay up to 35.89%.

There’s no hidden or prepayment fees and the interest rates are fixed. Lending Club requires a minimum credit score of 600, though, which may put it out of reach for some borrowers.

3. Wells Fargo

A good choice if you’re looking for a bigger loan, Wells Fargo offers fixed personal loans from $3,000 up to $100,000. You won’t be charge 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 approve in as little as 15 minutes and have the funds transferred to your account the same day.

Final Words

Prosper is a good choice if you need a loan, but don’t qualify for traditional financing. With interest rates been fixed and reasonable comparable to most credit cards and payday loans, and there are no prepayment fees.