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Prosper Personal Loans Review: What You Need To Know About This P2P Lender

While there are a lot of peer-to-peer lending companies out there to choose from, finding the best can be a little challenging. Thus, this Prosper personal loans review will provide you vital information you as a borrower should check out to see if this company is the one you are looking for.

Prosper personal loans review

According to an article published by Investopedia, one of the most popular finance blogs out there, peer-to-peer lending or P2P lending allows individuals to acquire loans directly from other individuals without having to go through a financial institution to act as the middleman.

Those websites that facilitate P2P lending has greatly increased its adoption over time as an alternative financing method.

Furthermore, P2P lending, which is also known as “crowd lending” or “social lending” has been there since 2005, according to the same article. Over the years, it has grown wide, and has established a crowd of competitors, which includes companies like Lending Club, Peerform, StreetShares, Upstart, and of course, Prosper.


Meanwhile, in a report by IBIS World entitled, “Peer-to-Peer Lending Platforms in the US Industry Trends (2014-2019),” it says that “over the five years to 2019, peer-to-peer (P2P) lending platforms have evolved from a handful of start-ups to an industry worth $2.0 billion. In particular, the P2P Lending Platforms industry has reached a mature stage of growth as leading platforms have taken their companies public, reached profitability, and formed industry associations.”

With how the P2P is right now, it seems to be the next big thing in the financial industry. That’s a wild assumption, but really, with how the industry is performing, it is not surprising to surpass other forms of lending in the future.

Now, as mentioned, there are a lot of P2P companies now. Some of them have earned popularity in the online lending industry. One of them is Prosper, which is today’s main highlight.

We believe that borrowers need to know what’s in store for them before dealing with any lending companies, in this case, a P2P lending company.

Thus, in this Prosper personal loans review, we are going to provide answers to some of the most commonly asked questions, such as the following:

  • Who is Prosper?
  • What are the different personal loans offered by Prosper?
  • What do borrowers need to know about Prosper personal loans?
  • Who qualifies for a Prosper personal loan?
  • How to apply for a Prosper personal loan?
  • What are the pros and cons of Prosper personal loans?


Prosper was launched in 2005. It is a peer-to-peer lending company that allows regular individuals to invest small amounts of money to cover other people’s loans. As borrowers repay the loan, the investors get their money back with an interest.

Prosper is a leader when it comes to peer-to-peer lending. It was the first of its kind to provide a platform where individuals can borrow money from what companies or people provide.

The lending company offers personal loans for almost any reasons like home improvement, vehicles, and weddings and other important life events, maternity expenses, small businesses, as well as debt consolidation.

Since its inception, the company says it has already originated over $16 billion worth in loans to more than 980,000 individuals.

Prosper is ideal for individuals who are considered as high-risk borrowers. These are borrowers that are most likely to be declined by traditional banks and credit unions because of low or poor credit score. However, as always, high-risk borrowers must expect to pay much higher interest compared to those with good or excellent credit scores.

Furthermore, Prosper offers an easy and fast application process. Borrowers can easily find out if they qualify and get estimates on what their possible rates will be.

If you are hoping for same-day funding, though, Prosper may not be the ideal lender for you. Since it’s a P2P lending company, it means loans are paid by many investors. Thus, funding will not be disbursed immediately just like how other online lenders do it.

If you are interested to know more about Prosper, then, it’s best to continue on.

Meanwhile, if you want to know more about how to get a personal loan at Prosper, check the below video by Houston McMiller:


Generally speaking, all of Prosper loans come with a fixed interest rate — that includes their personal loan options. Since the rates are fixed, borrowers need not worry about changes in the rates like how it is for variable interest rates. The rate is basically just the same all throughout the life span of the loan.

So, if you are up for a fixed interest rate personal loan, then, perhaps Prosper is the one you are looking for after all.


Every time we make reviews, we always make it a point to remind our readers, particularly those planning to borrow money from lending companies to always make time to know more, learn more about the company and the products and services they offer.

We also highly encourage borrowers to always shop and compare loan features to be able to get the best deal possible. As much as possible, avoid getting into a loan proposal without comparing it to other lending companies as you might just regret in the end.

When it comes to borrowing funds, being impulsive is never an option. Sometimes, if not most of the time, impulsive borrowers end up regretting where they put themselves into.

Anyway, to help you understand more what we are trying to say, at this point of our Prosper personal loans review, we are going to give you the following very important details:

  • Loan Amounts
  • Interest Rates
  • Loan Terms
  • Loan Fees
  • Disbursement of Funds
  • Personal Loan Features
  • Refinancing Options

Loan Amounts

As we always say, before you even shop around for lending companies, make sure to determine already how much you need to borrow. This way, you get to save time and energy. Instead, you just focus on lenders that have offer loan amounts that are within what you need.

By the way, just a quick tip. When determining the amount of money you will borrow, as much as possible, stick to that amount only. Do not be tempted to go overboard or — again — you might just regret it in the end.

Moving on, Prosper lets borrowers borrow amounts ranging between $2,000 and $40,000. Having said that, Proper makes an ideal choice for people who need a little large amount of money.

Please note that most personal loan lenders do not allow borrowers to borrow more than $25,000, which, again, makes Prosper a good choice for those who need more.

Interest Rates

The interest rate charged by lenders is another deciding factor. In fact, it’s one of the major factors that borrowers need to consider before signing any loan document.

Interestingly, Prosper looks into a borrower’s credit history, income, as well as other factors in assigning a borrower a particular rating (A, A, B, C, D, E, or HR). The rating is used to determine the interest rate.

Similar to other lenders out there, borrowers with excellent credit scores are eligible for lower rates — as low as 7.95%. Meanwhile, high-risk borrowers or those with low or poor credit scores may face higher interest rates — as high as 35.99%.

If you are going to compare the rates though to other banks and payday lenders, the interest rate Prosper charges to high-risk borrowers is still a good deal.

Loan Terms

Loan terms refer to how long a borrower needs to pay off the loan. It is also another important deciding factor especially if you think you cannot afford to repay the loan in the short-term.

With Prosper’s personal loans, the company offers borrowers loan term options of either three or five years. Yes, that’s definitely short compared to other lenders out there.

Loan Fees

Some borrowers usually overlook fees charged by lending companies that sometimes they are surprised to learn that they are charged for this and that. That is why we always make it a point to remind borrowers to make sure not to miss this detail.

Ideally, it would be nice to find a lender that does not or does not have that many fees.

In the case of Prosper, however, borrowers need to be reminded that the lending company has charges a few fees, which include the following:

  • Origination Fee – 2.41% to 5%
  • Late Fee – $15 or 5%, whichever is greater
  • Insufficient Funds Fee – $15

If we may say, this is most likely where Prosper fails, because to be honest, there are a lot of other lenders out there that offer no fees or very minimal fees.

However, similar to other lenders, Prosper does not charge prepayment penalties, which means you can pay your loan in full any time before the loan’s maturity date without having to worry about being charged.

Disbursement of Funds

If you are looking for a lender that disburses funds immediately or within one business day, then, Prosper may not be the one for you.

Once your personal loan application is approved, you will be asked to set up your banking details, and expect funds to be deposited in your account within a few days.

Before you even get disappointed with this, please be reminded that Prosper is a P2P lending company, which means, funds will be coming from a company or individual investors, and that the company needs to respect the time these investors need to disburse the amount being loaned.

Personal Loan Features

To give you a summary of some of the most features of Prosper personal loans, refer to the list below:

  • The company provides a prequalification option, which in any way won’t affect your credit score.
  • Prosper allows a joint application, which means borrowers can have co-signers for a loan to ensure more chances of personal loan approval.
  • The lending company offers a flexible monthly due date.
  • It does not have a prepayment penalty, which means you can pay off your loan early.
  • Prosper personal loans can be used for multiple reasons like medical expenses, debt consolidation, home improvements, weddings, and anything else you need.
  • Prosper allows you to make money through investing. If you have spare cash, you can make more money by paying for portions of other people’s loans. When borrowers pay back the loan, you will acquire your money back plus interest. The amount of interest you will earn depends on the interest rates of the loans you opted to contribute to.

Refinancing Options

Unfortunately, Prosper does not offer personal loan refinancing at the moment. So, if you are considering this in making a decision, then, Prosper may not be the right lending company for you.


This Prosper personal loans review will not be complete if we are not going to share one of the most important information a borrower needs to know — qualification requirements.

To qualify for Prosper personal loans, you must be able to meet the following requirements:

  • A FICO credit score of at least 640 (average is 717)
  • A maximum debt-to-income ratio of 50%
  • Must have no bankruptcies in the year prior to the application of the loan
  • Must have seven or less credit bureau inquiries in the last six months
  • Must have at least three open trades on your credit report

In addition, although Prosper did not indicate a specific annual income requirement, based on records, the average annual income of those approved for Prosper personal loans is $89,000.

Of course, similar to other lending companies, borrowers must also be:

  • A U.S. citizen or a permanent resident holder
  • At least 18 years old (or 19 in other states)

If you fit in all of the above-mentioned requirements, then, that means you qualify for a personal loan at Prosper.


Initially, you have to go through the prequalification process to check if you qualify for a Prosper personal loan or not. If you do, you may now proceed in completing your online personal loan application.

Depending on the information you provided, Prosper might contact you for more information particularly on the following:

  • Employer
  • Income
  • Credit History

Please note that the added screening process could take a few days to be able to complete before an approval is made.

Since Prosper is a P2P lending company, expect that your application will go through to investors who are looking for people to invest their money into. This process is also the reason why approval can take a while at Prosper.

Furthermore, since the money that you will borrow will come from investors, there could be a chance that while Prosper may have approved your loan, but if the investors or lenders do not agree to the terms, you may end up not getting your loan.

So, yeah, it is safe to say that there is a risk involved when dealing with a P2P company.

Anyway, once approved, as mentioned earlier, you will be asked to set up a bank account where the funds will be disbursed once approved and funded.


This Prosper personal loans review will not be complete without us listing down the things to like and not to like about it.

This basically is a summary of the things that borrowers need to consider before dealing with Prosper.

So, here’s what we found —


  • Minimal Credit History Requirement – Unlike other lending companies out there, Prosper approves personal loans even to borrowers with fair or poor credit history. More so, the company needs no bankruptcies within the last year, a debt-to-income ratio that’s less than 50%, and less than five credit inquiries over the last six months prior to the loan application. In addition, you will need to prove you have a source of income to repay the loan.
  • Allows Joint Applications – While some lenders do not allow co-signers, Prosper does allow you to ask a dependable friend or relative to co-sign the loan. Make sure though that your co-signer does have a good or excellent credit history for better rates.
  • Prequalification Process – Prosper do have a prequalification process, which allows you to see what to expect in terms of rates and loan amounts. Since the process will only do a soft inquiry, it won’t absolutely affect your credit score.
  • Allows Two Loans at Once – At Prosper, once you have already paid off at least six months of your initial loan, you can already take out a second loan provided that both loans will not exceed $40,000.


  • Charges Many Fees – Unlike other lenders, Prosper charges quite a few fees, which include an origination fee, late fee, as well as insufficient funds fee.
  • Limited Repayment Terms – Prosper only offers repayment terms of either three or five years, which, compared to other lenders is quite limited.
  • High Maximum APR – The maximum APR of Prosper is 35.99%, which is quite high compared to other lending companies.


To sum it all up, Prosper may be an ideal choice for those who have a fair or poor credit history. However, similar to other lenders, borrowers with such kind of credit score must expect a higher interest rate that could go as high as 35.99%.

Since Prosper is a P2P lending company, which means individual or company investors are the ones funding the loans, funds are not easily disbursed. It takes time, which makes Prosper not ideal for those who need cash quickly.

Similar to other online lending companies as well as traditional lenders, Prosper has its share of pros and cons or good and bad. It’s all up to you to decide if you are up for it and what it offers, or you want to look for other options.

But, hopefully, this Prosper personal loans review was able to give clarity to some of your questions, and help you come up with a decision – whether to go for Prosper or not.

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