These are two major companies which are SoFi and Prosper with personal loan products that have really been getting a lot of attention.
The question remains knowing which one is better. Because there are similar features between these two products, it can be difficult trying to determine which loan product is the best one for any given situation.
The following is a comparison of Sofi and Prosper personal loan products so you can decide which one would work best for your needs and for your wallet. Here is a comaprison of SoFi vs. Prosper.
SoFi Personal Loans
SoFi’s personal loans are fairly versatile, and the company also provides ideas on how the money from the loan can be used. You can pay off a credit card or even use the money to make a large purchase. One of the advantages boasted by the loan is the low interest rate.
If a person is paying high interest on a different loan or credit card, it could pay to get a SoFi loan which he will use to pay off those debts and pay less in the long-term because of reduced interest.
Some of the features of SoFi include:
- Quick application process
- Low interest rate
- A fixed monthly payment
- Financial advising is included
- Career and salary guidance
- A 0.125% interest rate discount on additional loans
- Access to more than 400 exclusive SoFi community events
SoFi may be a better option if
- You’re new to credit.
- You want a variable-rate or large loan.
- You want opportunities for networking.
To apply for a SoFi personal loan, you first need to know the interest rate you will be charged through the pre-approval process. There is no obligation to take the loan if the rate is not satisfactory or you change your mind. Once your rate is found a loan could be selected.
The next step is to provide identifying information via an online application. Asides name, address, and telephone number, SoFi needs income status and information, your Social Security number, and employment information. Once that is complete and the application gets approved, an electronic signature is required to have the funds wired to your bank account.
How to qualify
SoFi is unusual among other lenders because it emphasizes free cash flow — your monthly income minus expenses, over credit score in its underwriting process. It has a minimum credit score requirement which is 680, and borrowers generally have credit scores of 700 or higher.
SoFi also considers your financial report, industry and career experience. It accepts applicants with no established credit history and has no debt-to-income ratio need.
Time to funding:
It typically takes 7 days from starting an application to receiving funding.
SoFi’s alternative underwriting criteria could result in a lower yearly percentage rate for borrowers in some situations. Its APRs starts around 6% and top out around 18%, well below Prosper’s maximum of 35.99%.
SoFi is one of the few online lenders that offer variable-rate loans, which tends to have lower starting rates but can adjust up or down over the life of the loan. Some borrowers choose them, especially for shorter loan durations, but fixed-rate loans are more popular according to the company.
Unlike Prosper, SoFi allows borrowers to change their payment due date, and it may waive an occasional late fee if you have a history of on-time payments.
In case of job loss, SoFi has a forbearance program that suspends payments or allows interest-only payments for up to a year.
Prosper Personal Loans
Like SoFi, Prosper boasts a low interest rate, no hidden fees, and a fixed term. The loans can be used for the same purpose as a SoFi loan.
Funds can be gotten to buy a car, consolidate debt, improve your home, pay for a special occasion, support your small business, or even pay adoption fees to expand family. What the money is used for is totally up to you.
Some of the characteristics of a Prosper market place loan include:
- Low interest rate
- Short loan term
- Fixed monthly payment
- Easy pre-approval and application process
Prosper may be a better option if:
- You want a loan from an established company.
- You do not need extras like networking and social events.
- Your credit history goes back two years or longer.
The application process begins with checking your rate and stating the purpose of the loan. Checking the rate is how the pre-approval process gets started. If the rate is okay, then the borrower can proceed to the application process.
If it isn’t, you aren’t forced or obliged to continue to the application. Once on the application page, it will verify the personal information entered but also asks for employment and income info.
How to qualify:
Borrowers who qualify for a Prosper loan must have strong credit, an average annual income of about $89,000 and an average credit history of 11 years. Prosper demands a minimum credit score of 640 and at least two years of credit history. Its debt-to-income ratio demand is 50% or less.
Time to funding:
Prosper’s approval process takes up to 7 working days, with an extra one to three business days to receive your funds.
Prosper’s APRs range from about 7% to 35.99%. Unlike SoFi, Prosper charges an origination fee of 2.4% to 5% of the loan amount.
Just like SoFi, Prosper does not charge fees for extra payments or paying off your loan early. There is a late payment charge of 5% of the amount due or $15, whichever is greater.