Personal Loans

Prosper Personal Loan Review 2021–Pros and Cons

Prosper offers personal loans with low fixed interest rates. Learn more about Prosper personal loans to find out if they're the right loan option for you.
A women uses her tablet device to apply for a personal loan from Prosper.
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By Rebecca Lake
Updated on: September 30th, 2021
Editor's Rating

Personal loans are a financial tool that can you can put to work in a variety of ways. For example, you might need a personal loan to get caught up on bills if you’ve fallen behind because of a job loss. Or you might use a personal loan to consolidate high-interest debt so you can pay it off faster and save money on interest. Having access to personal loans can provide you with some financial peace of mind if an unexpected expense comes up.

A Prosper personal loan is one option for getting personal loans online. Founded in 2005 as the first peer-to-peer lending marketplace in the U.S., the platform has helped 1.14 million borrowers to secure more than $19 billion in loan funding over the years. But is it right for you? Our Prosper review offers a closer look at how this company’s personal loans work.

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Pros and Cons of Prosper

When comparing personal loan options, it’s important to consider the advantages and potential disadvantages, if any. As part of this Prosper review, we’ve highlighted the most important pros and cons to know about borrowing through the platform.

Pros Cons
Prosper offers personal loans ranging from $2,000 up to $40,000 Some personal loan lenders may offer higher borrowing limits
Borrowers can choose between 3- and 5-year loan repayment terms Customers may pay loan origination fees
Funding as soon as one business day after approval once all requirements completed Loans cannot be used to pay for college tuition or expenses
Checking your rate won’t affect your credit score Limited repayment term options
No prepayment penalties for paying loans off early Autopay discount not offered

Who Is a Prosper Personal Loan For?

Prosper may be a better fit for some borrowers than others. When comparing personal loan lenders, it’s helpful to find one that checks off most or all of the boxes on your list in terms of features and benefits.

With that in mind, Prosper could be good for people who:

  • Need to borrow between $2,000 and $40,000
  • Want to get an unsecured personal loan
  • Don’t mind the possibility of paying a loan origination fee
  • Are looking for a personal loan with a fixed rate
  • Want to take out a joint personal loan with a co-borrower

One thing to note is what Prosper loans can be used for. As mentioned, you can’t use these loans for college expenses. But you can use Prosper personal loans for any of the following:

  • Debt consolidation
  • Home improvement
  • Medical and dental expenses
  • Large purchases
  • Vehicle purchases or repairs
  • Household expenses
  • Special occasions
  • Starting or funding a business
  • Paying taxes
  • Vacations
  • New baby expenses

Overall, Prosper is pretty flexible when it comes to how you can put loan proceeds to work.

Top Features of Prosper

Prosper is a peer-to-peer lending marketplace that connects people who need to borrow money with investors who are able to fund loans. So if you apply for a loan here, you’re getting a loan from one or more investors, with Prosper acting as a go-between.

In terms of what people seem like to best about Prosper, the top features include:

  • Competitive loan amounts. It’s possible to borrow up to $40,000 with a single Prosper personal loan. That may be sufficient for funding any number of financial goals, from getting caught up on bills to consolidating credit card debt.
  • Joint loan option. Prosper allows creditworthy borrowers to apply for a joint personal loan. The better your credit scores, the lower your rates are likely to be if approved.
  • Check rates without affecting credit. You can get a rate quote from Prosper without triggering a hard pull of your credit report. That means your score won’t be impacted unless you decide to move forward with a full Prosper loan application.
  • Next day funding. If approved for a Prosper personal loan, it’s possible to have the funding deposited to your bank account as quickly as one business day. That’s important if time is of the essence because you need to cover an emergency expense.
  • No prepayment penalty. Paying a personal loan off early could save some money on interest. Prosper won’t charge you a prepayment penalty if you decide to clear your loan balance ahead of schedule.

How to Apply for a Prosper Personal Loan

Prosper makes it as simple as possible to apply for personal loans online. The first step is checking your rate. To do that, you’ll need to tell Prosper:

  • How much you want to borrow
  • What the money will be used for
  • Whether you plan to apply individually or with a co-borrower
  • Your name and email address
  • Your date of birth

Once you’ve created your profile, Prosper will review your information and present you with loan offers. If you want to proceed, you can move on to the full application process. At this point, you’ll be asked for additional information, including your income, driver’s license number and Social Security number.

Getting your rate won’t affect your credit but applying for a loan can. Prosper uses a proprietary rating system for determining loan approvals and interest rates. This system is based on your credit history, income and other financial information. Prosper generally looks for borrowers with a 640 credit score or higher.

Loan applications are subject to a review process, which can take around five business days. Once loans are approved, it’s possible to receive next day funding.

Rating the Features

Throughout this Prosper review, we’ve touched on what’s good (and sometimes not so good) about this platform. To wrap up the review, here’s a rundown of how Prosper’s key features rate.

User Experience

Prosper has an easy-to-navigate website and getting a quote is a simple process. You just have to plug in the aforementioned information to get quotes delivered to your inbox. From there, you can decide which loan offer you want to apply for to start the full application process and go through the five-day loan review.

Prosper does have a mobile app but it’s only for investors who are funding loans. So if you’re a borrower, you’ll need to use the desktop site to manage your account.

Fees and Rates

In terms of fees, Prosper can and does charge origination fees for loans. This fee is 2.4% to 5% of the loan amount, based on your Prosper rating.

Additionally, Prosper charges fees for paying by check, paying late or having insufficient funds to process a payment. The check fee is $5 or 5% of your payment, whichever is less. The fee for late payments is $15 or 5% of the late payment amount, whichever is greater. The insufficient funds fee is $15. There is no prepayment penalty.

Personal loan rates range from 7.95% to 35.99%, as of September 2021. The lowest rates are assigned to the most creditworthy borrowers. There is no rate discount for autopayments.

Transparency

Prosper does give you a chance to see the rates you might pay for a loan before you move forward with a full application. And if you’re offered a loan, you’re not obligated to follow through with it if the rates or repayment terms dont’ work for you.

There’s an online Help Center that features answers to some of the most commonly asked borrower questions. You can also contact Prosper by phone or email if you need help.

Flexibility

Prosper offers personal loans of up to $40,000, with $2,000 being the minimum you can borrow. Again, these loans can have three or five-year repayment terms; you can choose what you’d prefer.

Your first loan payment is due the month after the day funds are sent to your bank. But if you need to change your payment due date that, you can do that by logging into your Prosper account online.

It’s worth noting that Prosper loans are only available in certain states. As of 2021, you can’t apply if you live in West Virginia or Iowa.

Customer Support

As mentioned, Prosper’s mobile app is just for investors. So if you’re looking for a personal loan you can manage from your mobile device, you may need to look elsewhere.

If you need help, Prosper is available by email or phone. The Help Center is available at 1 (866) 615-6319 Monday through Friday, from 9 am to 8 pm ET and Saturdays from 9 am to 5:30 pm ET.

Bottom Line

A personal loan could help to fill a short-term funding need or make it easier to pursue your long-term financial goals. Prosper could be a worthy candidate for getting a loan if you’re comfortable going through a peer-to-peer lending marketplace and you don’t need to borrow more than $40,000. Checking your credit beforehand can give you an idea of how likely you are to qualify for a Prosper personal loan. And remember to crunch the numbers to make sure a personal loan payment fits into your monthly budget.

About the Author

Rebecca Lake joins AmOne as a contributor writing about personal loans, credit and debt, small business, and other personal finance topics.

Rebecca brings her expertise as a personal-finance journalist to AmOne, having written about money for over five years. Her work has appeared online at U.S. News and World Report, Life + Money by Citi, CreditCards.com, and Bankrate. Connect with her on LinkedIn.