Prosper Loans Reviews

Are you looking for personal loans? Prosper loans is your sure bet

Prosper Loans Reviews
Prosper Loans Reviews

It’s an undeniable fact that times are quite hard, and sometimes emergencies pop up when we least expect them.

It could be having a huge expense like a home renovation project, a medical bill that can’t wait, a family vacation, or even digging out of a nagging pile of debt.

Whatever your circumstance, a personal loan from Prosper Loans can be a viable option.

Unlike other loans that are earmarked for a specific purchase, you can use personal loans for virtually any purpose and repay in flexible monthly payments over a fixed period.

Read on, and you’ll learn why we think Prosper Loans is a decent option.

More about Prosper Loans

Founded in 2006, is an online peer-to-peer lending platform and a leading provider of personal loans.
If you are looking for personal loans for any need, it’s worthwhile to include in your loan search.
Their original vision was to provide a marketplace where investors/lenders could lend out to individuals who need money for various needs. So, instead of relying on credit unions and traditional banks, borrowers would have a larger pool of lenders to choose from.

Prosper does not fund loans on its own. Instead it underwrites applicants based on their credit history, credit scores and other lending requirements, and then matches them with investors they are most compatible with. LendingClub which is also a leading provider of personal loans operates in the same model.

To get approved for a loan from, you don’t need collateral instead they’ll base their lending decision on your credit and income. Usually, the repayment term for their loans is 3 to 5 years.

How works

With a stable and reliable income and a good credit score of above 700, you can get a personal loan from at very competitive interest rates.

Prosper loans are available to borrows in the range of $2,000 and $40,000, and you can use them for virtually any purpose.
Interest rates are in the range of 6.95% and 35.99%. For borrowers with excellent credit scores, personal loans from come at very affordable interest rates.

It’s highly unlikely to be approved for a loan if you are a subprime borrower. However, if you get approved, you’ll have to part with a lot of cash as interest. This is to reduce the lending risk should you default on payments.

Although the interest is quite high for borrowers with less than perfect credit scores, the beauty of is that checking your rates through their platform will not damage your credit.

Prosper loans are payable in 3 to 5 years, and for every credit, you apply for, you’ll pay an origination fee of between 2.4% and 5% of the loan amount you ask for, and it is usually deducted from your loan proceeds.

For example, you applied for a loan of $40,000, and you get charged an origination fee of 3%, you’ll get $39,800 after the $1,200 has been deducted.

It’s important to note that prosper is not a direct lender. Instead it connects borrowers with lenders they are compatible with. They make money through the servicing and transaction fees.

When Prosper processes borrowers’ payment of principal and interest, and passes such payments to the investors, they earn a servicing fee of 1%. They also earn transaction fees ranging from 1 – 5% from WebBank for facilitating borrowers’ origination fees.

Prosper loans are ideal for borrowers who:

  • Want an accredited lender – their marketplace is approved and has been in operation since 2006. They, therefore, have the expertise of matching borrowers with reputable lenders.
  • Have good credit scores – prefers borrowers with a credit score of above 700. The minimum acceptable credit score, however, is 640.
  • Have a stable and reliable income – to be eligible for a loan from prosper, you must have a regular income of $89,000.

Benefits of personal loans

Below are circumstances where a personal loan would be the best option:

  • Debt consolidation
    If you have multiple debts and a huge credit balance, consolidating all these debts into a single payment may save you a lot of cash.
    Instead of paying several debts with varying interest, you can take out a personal loan at a lower interest and payoff all these loans, then focus on paying one lender at an affordable interest rate and flexible repayment term.
  • Finance a huge purchase
    You can take out a personal loan to purchase equipment that’s vital for your business.
    The most viable option would be to pay it in cash instead of using the equipment as collateral to pay in installments, but always weigh options.
    Ask the seller for an offer and compare it against the personal loan you intend to take. You can then make a decision based on which option is better and cheaper than the other.
  • Pay for a huge event
    Instead of using your credit cards to finance an event like a wedding, you could take out a personal loan that allows you to pay in flexible monthly payments, and at an affordable rate.
    Usually, the interest charged on credit cards is too high, and you are highly unlikely to pay off all the accrued balances and interest in a month.
  • Personal loans are a good way of building credit
    Since most lenders included will only lend out to borrowers with average or excellent credit scores, having an excellent credit rating is vital. A personal loan can make a positive impact on your credit scores.
    By taking out a personal loan, you’ll have mixed accounts on your credit report. So instead of your credit reports reading credit card payments and usage only, you’ll have a different loan, and this is favorable for your ratings.
    Taking out a personal loan that you can consistently pay off will also increase your scores significantly.

What to look out for when taking out personal loans

Before applying for a loan, it’s important to consider the following:

  • APR – the annual percentage rate is the total amount charged on your loan plus the interest. While many borrowers are more concerned with the interest rate, APR indicates the actual cost of the loan. It includes all the fees that come with a loan. Some of the charges involve an origination fee, processing fee, late payment fees, and prepayment fees.
  • Interest rate – this is the cost of borrowing. It is expressed as a percentage, and it’s the amount you pay on top of your loan amount.
  • Repayment terms – loans are payable in 3 to 5 years. A longer repayment term would mean spending a lot on interest while a short repayment means huge monthly installments. It is, therefore, essential to choose what works best for your current financial situation.
  • Terms and conditions – before signing the loan agreement form, it’s important to read the fine prints of your loan terms. Ask if you don’t understand and you have a right to reject a loan if you don’t agree to the conditions provided.

The step by step loan application process

  • Pre-qualification
    This first step involves checking if you qualify for a personal loan from Prosper.
    You’ll enter your credit details on the loan application form on their website, and will get back to you with a wide range on interest rates. If you are not eligible for a loan from them, they’ll tell you.
    The beauty of is that the pre-qualification step is usually a soft pull on your credit, and it will not impact your scores negatively.
  • Request the loan
    If you are pre-qualified, it means you are eligible for getting a loan from them, and therefore you can request a loan.
    To increase your odds, it’s important to be honest while requesting the loan. You’ll need to create a profile with them, and include all your details.
    Although they don’t mind the purpose of the loan, it would do you some good if you indicated why you need the cash and what interest rate you are most comfortable with.
  • Lenders review your application and bid for it specializes in offering peer-to-peer loans to borrowers who would not be eligible for loans from traditional banks.
    The striking point is that after submitting your loan application, lenders will check it out and compete to fund you.
    If you are a prime borrower, the likelihood that you’d get funded very quickly is quite high. Subprime borrowers, on the other hand, may not get funding.
  • Verification and funding
    Before the funds are credited to your bank account, Prosper carries out a stringent verification process where you confirm your details and identity.
    You’ll have to speak to one of their representatives on the phone and send your proof of address by faxing your credit card statements and utility bills.
    Once the verification process is complete, you’ll get the loan amount you requested for minus the origination fee. It takes 1-3 business days for the funds to reflect in your account.
    Usually, deducts payment from your checking account every month towards your debt obligation.

Benefits of using

Below are some of the advantages of using for your borrowing needs:

  • Gives borrowers who don’t qualify for bank loans access to funding – if you are not eligible for financing from traditional banks, you can still be approved for loans from as long as you meet their lending criteria.
  • The soft check does not affect your credit – checking your rates through their platform will not appear on your credit report as a hard pull until you request or finance the loan.
  • You qualify for better interest rates – with several lenders bidding for your loan application, you stand a chance of getting loans with competitive interest rates.
  • There are no prepayment penalties – you don’t have to pay prepayment fees for paying off your loan earlier than the planned schedule.
  • ives you a chance to tweak your profile and sell yourself to lenders and let them know why you are a good fit for their loans.


  • The platform favors prime borrowers over subprime borrowers – if your credit scores are less than perfect, be ready to pay double digits interest rates.
  • The repayment term is fixed at 3 to 5 years.
  • If you are a high-risk borrower, you may have to pay a high origination fee.

Consumer complaints about and the solution they offer

To make the process of finding a loan smoother for consumers, let’s look at a few complaints consumers have when trying to access funds from, and possibly find the most viable solutions.

  • Complaint no.1 – Borrowers are often denied loans

Because of the stringent lending guidelines, most borrowers’ loan applications are usually rejected.
As stated above, for you to qualify for a loan from, you have to have a regular income, a good job, but most importantly, your credit score has to be above par. If you have a credit score of less than 640, your chances of approval are nil.
The most viable option if you get rejected would to wait for at least six months and work on building your credit before applying again.
Another option would be to get a loan at LendingClub which also specializes in offering peer-to-peer loans by using the same model as Prosper.
LendingClub is more lenient and may still offer loans to borrowers who were rejected by Their interest rate is also quite competitive.
If you choose to wait and work on your credit first, here are a few tips on how to improve your credit scores:

  • Get your annual credit reports from the three reporting bureaus.
  • Analyze them, and if you find any errors or negative information that’s false, you have a right to raise disputes with the credit bureaus.
  • The credit bureaus will look into your inquiry and the facts you presented as proof, and if your allegations are right, they’ll get back to you in 30 days with the amendments and a new credit rating.
  • Once you repair your credit, you can improve it further by keeping a low credit utilization rate. Also, make sure you get rid of accounts that might hurt your credit score.
  • Pay your credit card balances on time every month.
  • If you have a running loan, make monthly payments on time to avoid creditors treating it as a delinquent account. Only apply for loans you can comfortably pay off without missing payments.
  • Change your spending habits and only take loans you can conveniently repay.
  • Instead of borrowing, you can put off expensive purchases until your paycheck arrives.
  • If you have to apply for loans, avoid loans with high-interest rates and APR instead work on your credit to qualify for low interest loans from banks and credit unions.
  • If your loan request was recently rejected, it’s prudent that you wait for at least six months before trying again. Several loan applications can dent your credit further since every inquiry will show as a hard pull on your credit report.
  • Have some saving aside that will wade you through emergencies to keep you from borrowing.
  • Pay your bills on time every time.

A good credit score, therefore, is vital if you want to qualify for better loans. By implementing the above strategies, your credit scores will undoubtedly improve, and you’ll be in a better position to be eligible for low-interest peer to peer loans from

  • Complaint no. 2 – the monthly repayments are too expensive for most borrowers

Borrowers have complained of the high monthly payments since most of them cannot afford them. Prosper loans are in the range of $20,000 to $40,000 with monthly payments of over $1,000 per month. This is not affordable for most borrowers making it difficult to repay their loans consistently.
Tip: take out loans that you can comfortably repay. Before applying for a loan, check your income versus expenditure.
Ask yourself if you can pay off the loan and still meet your daily expenses with your current income. Missed payments on your credit reports will negatively affect your ratings.
Another alternative would be to prepare a budget and stick to it until you clear your loan.
A budget helps you track your income and expenses and makes you financially prudent.
Cut on impulse purchases to free up some cash towards your debt obligation by only spending on necessities. You can sacrifice on expensive purchases, family vacations, and entertainment.
If you delay or miss payments by a month, will send you reminders. However, failing to pay consistently will force them to forward your details to debt collecting agencies.
The debt collector will bag you with calls, emails, and messages reminding you to repay your loan. This can be so annoying.
Some lenders, unfortunately, can take legal action against you and ask the court for permission to garnish your wages.
If you’re still unable to pay off your debt, the lender will report your details to the credit bureaus, and it’ll show on your credit reports as delinquent accounts.
If your reasons for missing payments are genuine, the most prudent thing to do is to honestly communicate your situation to prosper representatives and work out a way out before your accounts go to collection.

  • Complaint no. 3 – Prosper loans are unavailable in some states
    Unfortunately, there is no way around this problem. If you live in North Dakota, Maine, and Iowa, you’ll have to find another lender when looking for a personal loan. Prosper loans are not available in these states.

Tips on how to get your Prosper loan approved faster

Here are pointers on how to get your loan request successfully approved even with a less than perfect credit score:

  • Make your Prosper posting as honest as possible – it’s illegal to give false information about your credit, and lenders can quickly detect when you falsify your posting. It’s essential, to be honest, to increase your chances of being approved.
  • Be brief and precise – like other borrowers, you are trying to grab lenders’ attention. Be precise and write the most critical information in the shortest words possible.
  • Market yourself like a pro – remember you are trying to attract investors, and get them to believe that you are the best investment decision they can ever make. Tweak your Prosper loan profile by talking about what you like, some of your obligations both at work and at home, and some of your past financial accomplishment that would portray you as responsible. By selling yourself well, you are trying to get lenders to trust you.
  • Focus on the future – instead of dwelling on the past and how you got yourself in the financial mess you are in, think about the impact the loan would have on your finances, and how you plan to maintain a good credit score once your loan is fully repaid. If you keep talking about your bad credit, lenders are likely to view you as a high-risk borrower and reject your loan request.
  • Prepare a budget and include it in your loan application – a budget will clearly show lenders your income vs. expenditure. If you take out a 3-year term loan, lenders should know how you plan to repay it. Can your income pay for your daily expenses, your past debts, and still have some left to service the loan you plan to take. If lenders can see that your income to debt ratio is above par, then they’d gladly fund you.
  • Clearly explain your credit – you don’t need to over justify why your credit sucks or why your credit utilization rate is high. Briefly tell lenders how the loan will help you turn your situation around and how you plan to maintain a good credit score once you clear your loan. Take responsibility for your credit and don’t give excuses no matter how genuine they are.
  • Give your employment details – without giving out your employer’s name, describe your job. Prosper prefers borrowers with a regular source of income after all it’s what you’ll use to service the loan. You could talk about what you do, the position you hold if any, your recent accomplishment, and promotions. With a stable and consistent income, it’s highly unlikely that your loan request will be rejected.
  • Personify your profile by putting a photo – you’ll increase your odds of being funded if you put a picture on your profile. Lenders will most likely finance borrowers they like and are more comfortable with.
  • Avoid closing your posting too soon – by choosing automatic funding, you’ll lock out lenders who may want to bid on your loan. Prosper loans allow you to close your listing as soon as enough bids are received. This feature only benefits lenders because it reduces the stiff competition. Automatic funding gives lenders an impression that you are a high-risk borrower and this may turn them off. It also means you’ll pay the high interest rates you choose because lenders will not try to outbid each other to get you the best rates.
  • Be reasonable when selecting interest rates – don’t choose a lower interest rate with the hope that lenders will accept it. If you have bad credit, chances are that if you select a low interest rate, lenders will reject your application. With good credit, however, even if you choose a higher APR and leave your bid open to many lenders, you’ll most likely get a low interest loan because lenders will try to outbid each other to give you the most competitive rates.
  • Be part of a group – if you belong to an investment group or church group that has an account on prosper, your chances of getting funded are quite high. Prosper allows groups on their platform to pre-approve borrowers and funds them. Usually, these groups form a network of investors/lenders and pull funds together to lend out peer to peer loans to borrowers in their group. By being a member in such groups, you’ll be regarded as a low-risk borrower since they know you.

Borrowers’ responsibility

  • Before taking out a loan, be sure you can repay it. Taking out an expensive loan means you’ll most likely miss the monthly payments if your income is low. Missed payments will impact your credit scores negatively, and this will hurt you when looking for better loans in the future.
  • As a borrower, it’s essential to carry out due diligence before taking out a loan. You could do this by comparing different lenders, and settling for those with the most affordable interest rates and flexible repayment terms.
  • Always read the terms and conditions of any loan you apply for before signing the loan agreement form. You are not obliged to accept a loan offer that you feel its terms are outrageous.

Bottom line

Is Prosper a decent option for personal loans? Our answer is yes. is a reputable and reliable peer to peer marketplace that connects lenders and borrowers with less than perfect credit scores, and if you are searching for personal loans for any need, would be a sure bet.
Fill out their loan application forms and find out if you qualify for a loan. The process is quite simple and will not dent your credit.

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