Understanding Prosper Loans

Joseph Meyer
Written by
Last update:

Is Prosper Legit?

Yes, Prosper is legit! They provide small consumer loans and have been in business since 2006.

They’re not fazed by the small loan market, with their target customers being desperate for money. Usually, the best type of loan business is the one that accepts all applicants who meet the basic requirements.

And that’s what Prosper does!

As for lenders, they accept applications for loans and automatically pass them to the lender that is willing to charge the lowest interest rate.

The borrower does not see the rate he or she is getting. The only information the person applying for the loan sees is the number of offers available. As such, you know that they’re not going to lend to you if you’re offering more than what they can get someone else to do so.

What Kinds of Loans Does Prosper Make?

Originally, Prosper only made personal loans. But in 2009, it added a new offering as more and more peer-to-peer lenders continued to enter the market: Prospera (formerly known as Prosper Business Credit). It also made Prosper Loans available in the UK in 2017.

Prosper’s personal loans are unsecured. That means that they require no collateral to qualify and are often available to borrowers with all kinds of credit, even those with past late payments and bankruptcies. Their interest rates start at 5.99% and range from 6.00% to 36.99% APR. Prosper offers the lowest interest rates across all types of personal loans.

Prospera is a fixed rate loan with an average interest rate of 8.03% and a fixed APR of 6.99%. Prosper loans have an average loan term of three years, five years for Prospera.

Loan selection is based on your purpose, risk, and credit profile. Prosper uses a proprietary algorithm to assess your credit and to determine if you’re eligible for a loan.

A smart borrower should have a clear understanding of what may push his or her credit score above the threshold required for Prosper’s best rates. It could be something good, like being employed for three years or something not so good, like having too many credit inquiries in a short period.

How The Loan Process Works

If you want to get a loan from Lending Club or Prosper, you must apply to both websites. You should apply to both Prosper and Lending Club because their qualification criteria are different. Lending Club is a peer to peer lending company and Prosper is an investment bank.

Both companies use a credit history check as a primary criteria for your loan application. However, both companies also have other methods to determine your suitability. Lending Club will also look at your income and bank statements as well as credit history. Conversely, Prosper looks at income and your credit score. Your credit score is used to determine your risk. So in many respects, these two companies are very similar.

Once you have applied for the loan, Prosper will present you with criteria to qualify. If your application is accepted, you will be presented with a loan agreement you must sign before your loan funds are released.

When are the funds released? When you receive your loan funds, you will be given two 90-day periods to pay back the loan. The first 90-day period starts from the date you sign your loan agreement with Prosper and the second 90-day period starts from the date your loan agreement is signed by the investor.

Prosper Personal Loan Requirements

Prosper offers unsecured installment loans that can help with expenses for home improvement, debt consolidation, and various kinds of emergencies. Since there are many more loan options now than there’ve ever been in the past, it’s worth taking the time to review several different options before you decide.

Prosper Personal Loan Pricing

The Prosper Loan Application Process

Once you’ve chosen a loan product and set an offer price, you’ll be taken to the application process. This is where you’ll enter in your personal and financial information.

This will be routed directly through Prosper and will be received first by Fair Isaac, which is one of the largest credit reporting agencies in the United States. Fair Isaac will then use the information to calculate your credit score using the information received from Prosper.

You are only required to enter in your email address and password; the rest of the information can be left blank if you so choose. However, leaving a lot of information blank can also cause your application to be delayed.

Prosper will then run its own credit check using all of the data provided. This usually won’t affect your credit score and is used to confirm the information you entered in your application.

Lastly, a background check will be performed before your loan is funded (or declined).

Prosper claims that the entire process takes the lender on average less than 10 minutes.

Once your loan application has been approved, your loan will be funded (or declined) as soon as the next business day.

Complaints Against Prosper

As we previously mentioned, there have been some complaints against the lending service from the Better Business Bureau. It appears that Prosper’s customer service team has been struggling with complaints from borrowers and investors.

Those that are disgruntled include:

  • –Borrowers sending multiple credited payments but receiving just one
  • –Lenders that have not received what was owed to them
  • –Borrowers who could not reach a live operator to answer their questions
  • –Investors that did not receive payments when they were promised

However, all the complaints we read were resolved, thanks to Prosper’s customer service team. So if you decide to be a Prosper lender or borrower, you’re in good hands.

What the Better Business Bureau Reports on Prosper

At first glance Prosper appears to be a great alternative to a typical bank loan. However, there have been several reports that Prosper is riddled with problems.

If you are considering applying for a loan with Prosper, you should make sure you understand all of the terms and conditions of their loans. Otherwise, you may end up in a sticky situation.

The majority of the reports that the Better Business Bureau has received about Prosper in the past few years involve payments or transactions that were not credited to people’s accounts. Most people were late on one payment or they failed to fully pay back a loan, and it caused problems with their account on the site. Some people reported that they had made the scheduled payments only to find out that Prosper took the money out of their account anyway.

This is the kind of thing that can result in a lot of problems down the road. It’s best to avoid Prosper and consider a more reputable lender.

Evaluations From Respected Sources

As with any aspect of lending, guidelines and rules for getting loans can vary among different lenders. It is important to know where you can go for reliable information on loans and what to expect when getting one. Getting a loan can often be a stressful process with many sources taking advantage of customers, while failing to inform them properly. Listed below are examples for the resources you can use to get reliable information on loans and who can help make sure you are not being deceived.

Credit Bureau- If you are interested in checking your credit score or determining good credit, check out the official website for Equifax. This site provides you with a wide variety of information about your own financial standing. While there are different credit bureaus that provide this information, this one is a trustworthy source of information and there are no hidden fees.

Consumer Reports- While this may not seem like the first place to go, Consumer Reports is a very trustworthy lending source. They provide reliable information on financial matters and provide quality reports and advice without bias. Here, you can get information on the best lenders in your area, newest regulations in lending and precisely how much you can expect to spend in fees.

Putting Prosper Complaints into Perspective

If you’re considering a Prosper loan, you’ve probably already looked at the Prosper reviews. If you haven’t, I highly recommend you read them. While the latest reviews certainly paint a scary picture, if you do a little digging you’ll find that many of the problems that people ran into with Prosper originated with the borrowers, not Prosper.

When it comes to consumer complaints, there are two things you can do that will help you keep them into perspective. First, state-mandated consumer complaint data is often limited in scope, as each state can define a complaint differently. Second, there’s a big difference between consumer complaints and private loan success. While economic conditions are generally similar across all states, Prosper regions are not. The bigger the population, the larger the loan volume.

Knowing the facts will ensure your Prosper experience is a good one. Here’s a little information that will help you keep your perspective.

Prosper Works Especially Well for Credit Card Debt

Saving on interest.

Prosper Loans allows you to borrow money at a lower interest rate than traditional loans. Why? Because your Prosper Loans are provided by investors, peer-to-peer, who are putting aside money specifically to invest in other folks’ ambitions … just like you. Of course, there is some risk involved for the lenders (which can be mitigated by diversification), but if you pay off the loan, you can earn a great return on your investment.

Also, you don’t need to tell someone a sob story to get a loan. In fact, you don’t need the money… just a plan. So don’t let a lack of money stop you anymore.

Freedom Health Services loans are non-secured loans. We say non-secured because even if you don’t pay off your loan, you probably won’t lose your house. The interest rate is approximately 11.75% to 12.45% for borrowers with a credit score greater than 660. Low rates of credit score 620 or less come with a higher interest rate.

Getting off the revolving debt merry-go-round.

More often that not it is the case that many find themselves caught up in the world of credit. Credit is a mechanism that allows people to borrow money and repay a certain amount of money with interest over a certain period of time.

Approving credit is a huge industry. The lending business is worth billions of pounds a year and is growing at a faster rate than that of the UK economy.

Although Credit Can Be a Good Way to Borrow Money for a Variety of Things (and Not Just Fast Cash Loans) There Is an over Reliance on This System and Many Consumers Are Not Aware that They Are on a Slippery Slope to Fast Cash Loans

The rise and increase in the number of people that are using fast cash loans to meet their finances is worrying and has an adverse effect on the economy.

As a whole, the fast cash loans system does not contribute to the UK economy in the way that it should.

This situation could benefit from a crackdown on the number of fast cash loans being issued and a system that would allow people to pay back their fast cash loans responsibly.

Should You Apply for a Loan with Prosper?

Prosper is an online lender where investors provide the funding that individuals need to buy a home, pay for college, or start a business. That’s why a lot of people are asking if they should apply for a Prosper loan when they need a personal loan. It’s a good question. Since, according to the company, “more than 150,000 people have used Prosper to create personal financial solutions for themselves and their loved ones,” it’s likely the right one.

When you need a loan, selling your personal information to dozens of lenders can be overwhelming, so there has to be a quicker way for you to get the funds you need to take care of debts and expenses. So does the fact that Prosper is a peer-to-peer lending company make it easier to get a personal loan? The answer is “yes.” The company has been around since 2006, so it now has a proven track record. And perhaps even more importantly, Prosper is not an online payday loan company. That’s because it doesn’t lend directly to consumers. Prosper’s peer-to-peer lending investors provide the funds that individuals need to pay off debts and manage their cash flow.