Prosper Personal Loans: 2023 Review

Q: Are Prosper loans legitimate?

Yes, personal loans through Prosper are legitimate. The company founded its peer-to-peer lending platform in 2005 and says it has facilitated more than $23 billion in loans to over 1.3 million people since then.

Q: What is the minimum credit score for a Prosper loan?

Primary applicants need a credit score of at least 640 to qualify for a personal loan through Prosper. With joint applications, the secondary co-borrower may need a minimum FICO® Score of at least 600.

Q: Are Prosper and Upstart the same?

No, Prosper and Upstart are not the same. Prosper is a peer-to-peer lending platform founded in 2005. The company is formally known as Prosper Funding LLC. Meanwhile, Upstart Holdings Inc. is a publicly traded financial technology company unaffiliated with Prosper. Upstart opened up shop in 2012 and works with its bank partners to provide consumers with Upstart-powered loans.

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Sulaiman Abdur-RahmanUpdated January 22, 2023

Overview of Prosper

Prosper offers unsecured personal loans ranging from $2,000 to $50,000 through a peer-to-peer lending marketplace. Borrowers can choose loan terms ranging from two to five years. APRs on these loans can range from 6.99% to 35.99%. One of the major drawbacks with Prosper personal loans is borrowers may have to pay origination fees of up to 5% of the loan amount.The Takeaway: Prosper personal loans can be used for a variety of purposes, including debt consolidation or covering unexpected expenses. Getting a personal loan through Prosper’s peer-to-peer platform may be right for you if you need to borrow money quickly for any household purpose.

Pros and cons

Pros

Loans can be used for a wide variety of household purposes
Can apply with joint applicant
No fee for paying off loan early

Cons

Charges origination fees and other fees
Loans cannot be used for postsecondary educational expenses
Loan amount cannot be changed once set

Pros of Prosper

As highlighted in the Prosper reviews above, customers generally appreciate the pros of Prosper personal loans. These loans can be used for a variety of purposes, including covering home improvement expenses and other large purchases. Prosper offers joint personal loans to co-borrowers, and there’s no prepayment penalty for paying the loan off early.

Cons of Prosper

Prosper may charge personal loan origination fees of up to 5% of the loan amount, plus late fees if you fail to make required payments within 15 days after your due date. Prosper personal loans cannot be used for postsecondary educational expenses, because Prosper’s lending platform is not compatible with federal laws regulating private education loans. Prosper doesn’t allow applicants to edit their requested loan amount upon submitting the application.

Prosper Personal Loan Terms, Rates, and Fees

Loan amounts: $2,000 to $50,000APR range: 6.99% to 35.99%Loan terms: Two to five yearsPrepayment penalty: NoApplication fee: Origination fee can range from 1% to 5% of the loan amountCo-borrowers allowed: YesApproval speed: Personal loan preapproval within minutes, funding can be received within one business dayInformation accurate as of Jan. 21, 2023.

Who May a Prosper Personal Loan Be Right For?

A Prosper personal loan may be right for the following demographics:

Consumers who need to borrow a $2,000 personal loan
Borrowers seeking a $4k loan for unexpected expenses
Borrowers who need quick personal loans from a legitimate lender rather than a loan shark
Consumers who need vacation loans to help cover travel-related expenses

Who Prosper May Not Be Right For

A Prosper personal loan may not be right for the following demographics:

Consumers who need to borrow large personal loans of up to $100K
Borrowers who don’t want to pay origination fees and daily simple interest on a personal loan
Consumers who prefer open-end credit vs. closed-end credit
Students enrolled in a postsecondary educational program

What to Watch Out for With Prosper Personal Loans

Here are aspects to watch out for with Prosper personal loans:

These quick personal loans may charge APRs as high as 35.99%
Prosper personal loans cannot be used as private student consumer loans
Failing to pay and defaulting on a personal loan can have a major impact on your credit score
There’s no guarantee that your loan request will receive full funding from Prosper’s investors

Prosper Personal Loan Eligibility Requirements

Prosper personal loans may have the following loan eligibility requirements:

At least 18 years of age
Have a personal U.S. bank account
Have a Social Security number
Meet minimum underwriting standards (640+ credit score)
Borrowers and co-borrowers must be U.S. residents in a state where loans through Prosper are available (not available to borrowers residing in Iowa or West Virginia)

Recommended: 5 Typical Personal Loan Requirements

Repayment Options for Prosper Personal Loans

Here are some loan repayment options that may be available to Prosper customers:

Automated recurring payments
Manual one-time payments online
Payments over the phone
Mailing a personal check, money order, or cashier’s check

How to Apply for a Prosper Personal Loan

Apply online. Applicants can get started by answering basic questions on a digital platform, including how much money you would like to borrow and your reason for the loan. Applicants can check to see if they prequalify for funding through Prosper’s platform. Seeing your loan options won’t affect your credit score, but applying for one may trigger a hard inquiry that can cause your credit score to drop by several points.
Verify information. Prosper may request applicants and co-applicants to provide additional supporting documents for verification purposes. You may need to provide proof of identity, such as a current driver’s license, passport, or other government-issued photo identification card. Prosper may decline your application if it is unable to independently verify the information in your documents.
Accept the loan. Approved applicants may accept the loan offer at this stage. Borrowers may receive their Prosper personal loan funds within one business day. In some cases it may take up to three business days to receive funding in your bank account. It’s your choice whether to accept the loan or cancel the loan application.

Alternatives to Prosper Personal Loans to Consider

As highlighted above, personal loans through Prosper have several pros and cons. When you need to borrow money, it can be wise to compare private lenders before submitting any loan applications. Here are some alternatives to Prosper personal loans that you may consider:

LightStream: LightStream is a Truist Financial Corporation brand that offers consumer loans ranging from $5,000 to $100,000. Loan terms can range from 24 to 144 months depending on the purpose of the loan, and the APR may range from 5.99% to 24.49%. One drawback with LightStream personal loans is the funds cannot be used to buy stocks or bonds.
Marcus by Goldman Sachs®: Marcus by Goldman Sachs offers personal loans ranging from $3,500 to $40,000. Borrowers can choose loan terms ranging from 36 to 72 months, and the APR can range from 6.99% to 24.99%. Marcus personal loans feature no late fees and no origination fees, but nonprime or subprime borrowers may have difficulty qualifying.
Upstart: Upstart is a cloud-based lending platform offering personal loans ranging from $1,000 to $50,000. Borrowers can choose between three-year or five-year terms, and some creditworthy applicants may qualify for interest rates under 7%. One drawback with Upstart personal loans is you may be charged an origination fee that’s deducted from your loan proceeds.
Lantern: Lantern by SoFi can help you quickly find online personal loans ranging from $1,000 to $50,000. Just fill out one simple form to compare possible lending options and select a lender of your choice.

Frequently Asked Questions

Are Prosper loans legitimate?

What is the minimum credit score for a Prosper loan?

Are Prosper and Upstart the same?

About the Author

Sulaiman Abdur-RahmanSulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.

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