Prosper Personal Loans Review: A Solid Peer-to-Peer Lender for Fair-Credit Borrowers
Review
Updated
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A Prosper personal loan may be for you if you're a highly qualified borrower eligible for the best interest rates. In our complete Prosper review, we'll explore the lender's most attractive characteristics and which features could be improved.
Great for: Best for peer-to-peer lending
Prosper loans are different from most personal loans in the sense that Prosper is a peer-to-peer lending platform. In other words, Prosper doesn't directly loan money itself, but it connects borrowers with investors (both individuals and institutions) who invest in the loans to earn interest income. Prosper matches borrowers with investors, and also services the loans it originates.
Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.
| Lender | APR Range | Loan Amount | Min. Credit Score | Next Steps |
|---|---|---|---|---|
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Fixed: 8.99%-29.99% APR (with all discounts)
|
$5,000 - $100,000
|
680
|
|
Apply Now for Discover Personal Loan
Powered by Credible
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
7.99% - 24.99%
|
$2,500 - $40,000
|
660
|
Apply Now for Discover Personal Loan
Powered by Credible |
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
6.70% - 35.99%³
|
$1,000 - $50,000¹
|
300
|
Prosper's top APR could make it difficult to repay a loan, especially for those already facing financial difficulties. Prosper loans come with an origination fee ranging from 1% to 9.99%. A borrower with a low credit score would likely end up with a high origination fee.
It's worth checking out Prosper. A highly qualified borrower may find that lenders are willing to compete for their business by offering the lowest rates.
While I wouldn't discourage those with lower credit scores from applying, I would encourage them to check other lending sources, such as their home bank or credit union.
At Motley Fool Money, personal loans are rated on a scale of one to five stars. We primarily focus on APRs, fees, and loan offerings. These categories take into account factors like autopay discounts, origination fees, loan terms, and more. Our highest-rated lenders generally offer competitive APRs, low fees, and diverse loan offerings.
See our full methodology here: Ratings Methodology
As someone who's spent many years researching and writing about financial issues, I know firsthand that a personal loan can be a great way to achieve goals like consolidating high-interest debt and making home repairs.
Personal loans are not suitable for everyone, but for the borrower with the discipline to use the funds wisely, personal loans provide an excellent way to reach a goal while enhancing their credit.
Since I've never personally borrowed from Prosper, I checked to see what borrowers think about their experience with this peer-to-peer lender.
The majority of borrowers report being pleased with the process overall, giving the lender 4.4 stars out of 5. One borrower referred to the loan process as "hassle-free," while others say it was quick and easy. Still others appreciated how quickly their loans were funded.
It appears that many Prosper borrowers used the funds to consolidate high-interest debt. But some loan applicants were unhappy with what they called "bait and switch on advertised terms" and hard credit inquiries they did not expect.
Average review site rating: 3.9 / 5.0 stars
We looked at five top review sites to learn more about what they think of Prosper loans, and there was quite a bit we agreed on. It's good that borrowers with fair credit have a chance of receiving a loan offer, but Prosper's origination fee can be costly. And other reviewers lament that cosigners aren't accepted.
We agree that Prosper's instant approval means borrowers won't waste their time, and its streamlined app makes applying easier. And Prosper even offers a hardship program for borrowers in need -- other reviewers called this perk out, too.
In terms of differences between our view and that of other reviewers, one reviewer found Prosper's lack of physical branches to be a downside. However, we believe that most of today's borrowers are happy to complete the entire loan process from home.
Prosper offers several features that might appeal to personal loan borrowers -- here are a few of the standouts.
Prosper offers personal loans ranging from $2,000 to $50,000. While the $50,000 upper limit isn't exactly the highest in the industry, it is sufficient for most borrowers. And on the lower end, $2,000 is less than many competitors are willing to loan.
Prosper funds its loans as soon as one business day following final approval. To be clear, this is when Prosper sends the money -- the timetable for it to show up in your bank account depends on their processes as well.
Prosper makes it easy for borrowers to get personalized rate offers without affecting their credit score. The online prequalification process takes just a couple of minutes and performs a soft credit check to reveal a variety of loan options.
Prosper is among the few personal lenders that allow joint loan accounts. For example, if you and your spouse wanted to apply for a loan together, that's an option.
Prosper offers personal loans for three specific purposes -- debt consolidation, healthcare expenses, and home improvements. The process of getting these loans are identical to one another; all have the same loan minimums and maximums, and in all cases, the money is distributed to the borrower's bank account just one business day after accepting a loan offer.
It's also worth noting you can use personal loan proceeds for just about anything you want -- after all, the entire concept of personal lending is that the loan isn't backed by any specific asset (like a mortgage is backed by a home).
There's no such thing as a perfect lender for everyone, and Prosper isn't an exception. While there are several things to like about Prosper's lending process, here are a few potential drawbacks.
The APR given to each particular borrower depends on a variety of factors, but Prosper's rates on both the low and high ends of the spectrum are relatively high. And to be clear, these APRs include Prosper's origination fee.
All loans made by Prosper have origination fees, which vary from 1% to 9.99%, depending on the borrower. These are included in the quoted APR, but the important thing to understand is that these origination fees are deducted from the loan proceeds before they are distributed. In other words, a $10,000 loan with a 5% origination fee would result in $9,500 being deposited into your bank account.
As Prosper is a peer-to-peer lending platform, it relies on individual and institutional investors to fund loans. Because of this, even if you're approved for a loan, there's no guarantee your loan will have enough backers in a timely manner, or even at all. This is rarely an issue in practice, but it's worth noting.
For borrowers with a thin credit history or working to improve their credit scores, landing a personal loan with a low interest rate can be next to impossible. However, if a well-qualified borrower cosigns their application and loan, the lender considers that person's creditworthiness.
As long as the cosigner qualifies, both applicants qualify. So by not allowing cosigners, Prosper limits the number of people who will be approved for a loan.
To qualify for a personal loan through Prosper, you must be a creditworthy borrower, meaning that your income, other debts, and credit situation meet Prosper's minimum standards. Here's what you'll need to qualify:
If you don't have all of these qualifications, it's also worth mentioning that Prosper allows co-borrowers. If you don't qualify on your own, you can apply with a creditworthy individual. It also means that you can apply for a loan jointly, such as with a spouse.
The personal loan application process with Prosper is simple. It works like this:
It's also worth mentioning that if you decide to accept a personal loan offer through Prosper, a hard credit inquiry is part of the final approval process. This is standard practice throughout the industry.
Deciding whether to take out a personal loan is highly personal, depending on your specific needs. However, it may be right for you if:
While Prosper considers an applicant's entire list of qualifications, it requires a minimum credit score of 560 to consider someone for a loan.
A credit score requirement of 560 is certainly on the lower end for the personal loan industry, so as long as an applicant has credit above this threshold, stable employment, and a debt-to-income ratio that meets Prosper's standards, it isn't terribly hard to get a loan. It's also worth mentioning that Prosper allows co-borrowers, but not cosigners.
Obtaining a new personal loan from Prosper (or anywhere else) can hurt your credit in the short term. New accounts and credit inquiries are two potentially negative items in the FICO® Score formula. However, any negative impact is likely to be temporary, as long as you pay your loan on time every month. In fact, making regular payments on an installment loan can be a great way to build credit over time.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands. Terms may apply to offers listed on this page.
*Upstart Loan Disclaimer
¹ Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).
³ The full range of available rates varies by state. A representative example of payment terms for an unsecured Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.60% and a 8.51% origination fee of $851, for an APR of 23.07%. In this example, the borrower will receive $9149 and will make 60 monthly payments of $258. APR is calculated based on 5-year rates offered in December 2024. There is no downpayment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
*SoFi Personal Loan Disclaimer
Fixed rates from 8.99% APR to 29.99% APR. APR reflects the 0.25% autopay discount and a 0.25% direct deposit discount.
SoFi Platform personal loans are made either by SoFi Bank, N.A. or , Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 3/06/23 and are subject to change without notice.Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors.
Loan amounts range from $5,000–$100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive.
Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
Direct Deposit Discount: Direct Deposit Discount: To be eligible to receive an additional (0.25%) interest rate reduction on your Personal Loan (your “Loan”), you must set up Direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A., or enroll in SoFi Plus by paying the SoFi Plus Subscription Fee, all within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled Direct Deposit to an eligible Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount will be lost during periods in which SoFi determines you have turned off Direct Deposit to your Checking and Savings account or in which you have not paid for the SoFi Plus Subscription Fee. You are not required to enroll in Direct Deposit or to pay the SoFi Plus Subscription Fee to receive a Loan.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands. Terms may apply to offers listed on this page.
*Upstart Loan Disclaimer
¹ Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).
³ The full range of available rates varies by state. A representative example of payment terms for an unsecured Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.60% and a 8.51% origination fee of $851, for an APR of 23.07%. In this example, the borrower will receive $9149 and will make 60 monthly payments of $258. APR is calculated based on 5-year rates offered in December 2024. There is no downpayment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
*SoFi Personal Loan Disclaimer
Fixed rates from 8.99% APR to 29.99% APR. APR reflects the 0.25% autopay discount and a 0.25% direct deposit discount.
SoFi Platform personal loans are made either by SoFi Bank, N.A. or , Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 3/06/23 and are subject to change without notice.Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors.
Loan amounts range from $5,000–$100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive.
Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
Direct Deposit Discount: Direct Deposit Discount: To be eligible to receive an additional (0.25%) interest rate reduction on your Personal Loan (your “Loan”), you must set up Direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A., or enroll in SoFi Plus by paying the SoFi Plus Subscription Fee, all within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled Direct Deposit to an eligible Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount will be lost during periods in which SoFi determines you have turned off Direct Deposit to your Checking and Savings account or in which you have not paid for the SoFi Plus Subscription Fee. You are not required to enroll in Direct Deposit or to pay the SoFi Plus Subscription Fee to receive a Loan.
