Prosper has over funded over $15 billion in loans, since 2005, serving over 900,000 borrowers. Prosper is a pioneer of peer-to-peer lending (also called p2p lending). Peer-to-peer lending provides a marketplace that matches consumers seeking a personal loan at an attractive interest rate with consumers seeking to invest and receive a good return. Borrowers who are approved by Prosper receive money due to the funds provided by the consumers who invest in them through Prosper.
Prosper offers loans between $2,000 and $40,000, at interest rates between 6.95% and 35.99% APR, as of May 2019. To determine if you qualify for a loan and what rate you are offered if you do, Prosper looks at your credit score, credit history, and the information on your loan application.
Prosper personal loans have an origination fee that ranges from 2.41% to 5.00%, depending on how creditworthy a borrower Prosper rates you. The fee is taken from your loan proceeds before they are transfered to you.
If you lend through Prosper, you can invest as little as $25 in each loan you select. Prosper charges investors a 1% annual servicing fee.
The most common reason borrowers apply for a Prosper personal loan is for debt consolidation.
Prosper makes unsecured personal loans available to borrowers who might not qualify for a loan through a bank or credit union due to their credit scores and history. Prosper approves some loans without verifying income, relying on other factors to demonstrate ability to repay the loan, so some borrowers who would not meet the income verification requirements of traditional lenders can get a Propser personal loan.
Prosper uses a proprietary algorithm to assign a "Prosper Rating" that ranks borrowers by risk, breaking them into 7 separate ranking groups. The least risky borrowers are ranked "AA" and the lowest approved borrowers ranked "HR."
Borrowers' rankings determine the loan terms available, the interest rate and length of repayment term. The ranking also signals investors the risk of lending to you.
Investors choose the type of borrower to whom they wish to lend, earning higher returns for lending to riskier borrowers. Investors can earn a higher return than is available with low-risk CDs or savings accounts.
The Prosper.com website is well-designed and easy to navigate. Disclosures are clear.
Rates for borrowers, as of April, 2018, range between 5.99% APR and 35.99% APR. Debt consolidation loans for high-interest credit cards are the most common loan purpose, along with home improvement.
Credit score is weighed heavily in determining a borrower's rates. Origination fees of 1%-5% are charged and are included in the APR rates above. Repayment terms are either 3-years or 5-years.
Prosper loans are available in all of the USA, except for Iowa and West Virginia, as of May 2019.
I recently got a loan through Prosper. The application process was simple and I ended up getting an interest rate that is about half of what my credit cards charge. I have good credit, with my middle FICO score at 723.