Prosper offers unsecured personal loans designed for borrowers looking to consolidate debt, cover unexpected expenses, or finance larger purchases. Loan amounts run from $2,000 to $50,000. Borrowers who need more than $50,000 can explore Prosper’s home equity loan or home equity line of credit options, but those require a home with available equity.
Loan Amounts, Terms, and Structure
Key specifications:
- Loan amounts: $2,000 to $50,000 for unsecured personal loans
- Loan terms: typically 2 years to 5 years
- Funding model: Prosper is funded by investors and is not strictly peer-to-peer in the traditional sense
Advice on terms: always choose the shortest term you can comfortably afford. A shorter term lowers total interest paid even though monthly payments will be higher.
Rates and APR
Prosper’s APR range is broad: 8.99% to 35.99%. The average APR across borrowers is approximately 24.79%, which reflects that many approvals land in the higher end of the range. The APR you receive includes both the interest rate and any origination fee.
Fees to Know
Prosper charges several fees that affect the true cost of borrowing:
- Origination fee: 1.00% to 9.99% of the loan amount. This fee is included in the APR. Prosper is one of only two lenders that will provide a pro-rated reimbursement of the origination fee if the loan is paid off early, but that reimbursement applies only when the origination fee is above 5%.
- Check payment fee: 5% of the disbursement or $5, for borrowers who opt for a paper check rather than direct deposit.
- Late fee: $15 or 5% of the payment, whichever applies.
- Insufficient funds fee: $15.
While an origination fee over 5% is substantial, the other fees are modest compared with some lenders. Still, some lenders charge no origination fee at all, so it pays to compare offers.
Who Qualifies?
Prosper aims to work with borrowers who have fair to excellent credit. Typical qualifying criteria include:
- Credit score: approvals are most common for scores 640 and above. Applicants below 640 may have difficulty getting approved; those below 600 are unlikely to be approved.
- Debt to income ratio: Prosper reviews overall financial health, not just score.
- Employment and recent credit history: stable income and a clean recent credit record improve chances.
Approval is not based solely on credit score. Prosper evaluates the full credit profile when making lending decisions.
Co-applicants
Prosper allows a co-applicant on applications. A co-applicant can increase the chance of approval or improve the rate, but only if the co-applicant has a stronger credit profile. Important considerations:
- The co-applicant is equally responsible for repayment.
- Both on-time and late payments will show up on both applicants’ credit reports.
Funding Speed and Prepayment
Prosper advertises quick funding. If approved and verified promptly, borrowers could receive funds as soon as the next business day, though timing depends on bank processing. Prosper also advertises no prepayment penalties, which allows borrowers to pay off loans early without extra charges. Combined with the pro-rated origination fee reimbursement for fees above 5%, paying early can lower total cost.
Reputation and Customer Experience
Prosper displays positive customer reviews on its website, but like many lenders, public review platforms include a mix of experiences. A closer look at lower-rated reviews does not reveal a single recurring issue that would be a clear dealbreaker for most borrowers. As always, individual experiences vary based on circumstances and expectations.
Prosper: Pros and Cons
Pros
- Loan sizes up to $50,000 for unsecured loans
- Quick potential funding, possibly next business day
- No prepayment penalty
- Pro-rated origination fee reimbursement for fees above 5%
- Co-applicant option to help with approval or rates
Cons
- Wide APR range with a high average APR near 24.79%
- Origination fee can be as high as 9.99%
- Applicants with credit scores below 640 may struggle to qualify
- Some fees such as check payment and late fees still apply
Who Prosper Is Best For
Prosper is a reasonable option for borrowers who:
- Have fair to excellent credit, ideally 640 or higher
- Need $2,000 to $50,000 for debt consolidation, a major purchase, or an unexpected expense
- Want a lender that can fund quickly and allows prepayment without penalty
- May benefit from adding a co-applicant to secure approval or a better rate
Prosper is less suitable for borrowers with low credit scores who need the lowest possible rates or who prefer lenders with no origination fee.
How to Shop Around and Get the Best Deal
Even if Prosper pre-approves a borrower, it is important to compare offers. Different lenders may offer better rates, lower fees, or terms that match a borrower’s goals. An effective approach:
- Pre-qualify with multiple lenders using soft credit pulls where possible. Soft checks do not affect the credit score.
- Compare APRs, monthly payments, total interest, and all fees including origination and payment fees.
- Choose the shortest loan term that is affordable to minimize interest costs.
Using a marketplace that checks multiple lenders at once can simplify the process and surface the best available offers for a given credit profile.
Final Recommendation
Prosper is a solid, credible option in the personal loan market. It offers competitive features like quick funding, no prepayment penalties, and the ability to add a co-applicant. However, prospective borrowers should not accept the first loan they are approved for. Because Prosper’s average APR is relatively high and origination fees can be significant, shopping around is essential to ensure the best possible deal.
Readers who have used Prosper are encouraged to share their experiences in the comments to help others make informed decisions.
You will stay on this site and learn how to apply for this loan.