Loans > Prosper Loans Review

Prosper Loans Review

Prosper Loans offers online personal loans with low rates, for a large variety of purposes.

Reviewed by
Updated January 10, 2022

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

You’re here because you’re searching for the best loan option, right? One that offers flexibility, and of course, good rates — it can be a tough search!

With the surge in unemployment and the increase in economic uncertainty, more people like you are inquiring about personal loans that don’t tie up your assets. In order to protect the health of their employees and community from COVID-19, banks are shutting down their branches, and people are staying at home.

This is having a rippling effect on the lending industry, resulting in a decrease in inquiries for personal loans from traditional lenders, and a move towards more accessible, online lending platforms. 

Prosper Loans is an online lender that offers unsecured loans to borrowers with excellent credit for almost any purpose – except one potentially crucial purpose.

In this guide, we go through what this is, and what makes Prosper Loans so different from a bank. Does it sound like Prosper has what you’re looking for?

Let’s find out.

Prosper Loans is an online marketplace that connects borrowers with investors. Borrowers can apply for a personal loan of up to $40,000 with low interest rates for those with excellent credit. Those with less than excellent credit will be met with less than ideal rates.

Fast Facts

  • Minimum Credit Score: 640+
  • APR: 6.95% – 35.99%
  • Loan Range: 3 or 5 years
  • Loan Amount: $2,000 – $40,000
  • Highlight: Huge range of loan purposes
  • Best for: High-credit borrowers


  • Usability: 8/10
  • Flexibility: 7/10
  • Customer Service: 8.5/10
  • Credibility and Trust: 10/10
  • Fees and Costs: 8/10
  • Overall: 8/10
Visit Prosper Loans on Prosper Loans’website

What is Prosper Loans?

Prosper, officially Prosper Funding LLC, is a subsidiary of Prosper Marketplace, Inc.

Founded in 2005, and headquartered in San Francisco, Prosper is recognized as the first peer-to-peer lending platform in the US, and has funded over $17 billion loans. 

The platform provides a marketplace for borrowers to connect with investors. Borrowers have easy access to unsecured loans of anywhere between $2,000 to $40,000. Additionally, Individuals and institutions can invest in the loans, without the need for a huge initial investment.

Unlike many lenders, where the purpose of the loan is restricted, Prosper loans can be used for a huge range of purposes, including debt consolidations, big purchases, medical expenses, home improvement, new vehicles, among others. 

The marketplace does restrict the use of loans for educational reasons, though. We’ll go through this more soon and tell you exactly why. 

As a P2P lending platform, borrowers won’t need to worry about the middleman (the bank) taking a cut. This means investors will get a bigger return on their funds. Typically, this also means that borrowers get a better interest rate.

Prosper Loans Summary

Prosper Loans is defined by several key points, which we’ve rounded up to the top five:

  1. Founded in 2005, and headquartered in San Francisco, Prosper is recognized as the first peer-to-peer lending platform in the US, and has funded over $16 billion loans.
  2. A key difference between a Prosper loan is that Prosper is not a bank.
  3. Currently, interest rates for Prosper range from 6.95% APR to 35.99% APR. 
  4. Prosper loan offers smaller amounts for diversification, a soft credit check, and charges no prepayment fee.
  5. Those with excellent credit will get better interest rates, and investors should be aware that investments are slightly riskier, and lack liquidity.

Is Prosper Loans a Good Option During COVID-19?

By March 2020, when stay at home orders were firmly in place, loan inquiries for cars, mortgages, revolving credit inquiries and other loan inquiries all dropped.

With 10 million people claiming unemployment benefits in April 2020, it is likely people are more cautious about getting loans that require collateral. At the same time, the pandemic may have contributed towards the increased demand to borrow

With bank doors shut, and social distancing firmly in place, people have moved towards online, personal loans that offer more flexibility, and lower rates by cutting out the middle-man (the bank).

Prosper loans offers lenders a marketplace where borrowers can connect with investors to request unsecured loans of up to $40,000. 

Prosper is different because it is not a bank. It doesn’t do any actual lending itself. 

This structure gives borrowers the flexibility of getting a loan for something potentially less expensive, or more expensive.

By eliminating banks from the process, Prosper offers lower interest rates than most competitors, and meets the current consumer need for contactless lending.

Some Key Personal Loan Statistics

  • Total outstanding personal loan debt in the United States is $143 billion.
  • There are 21.1 million outstanding personal loans in the U.S.
  • Average interest rates for personal loans vary between 10% and 28%. Those with a higher credit score are able to get lower interest rates.
  • APRs vary drastically depending on the borrower’s credit score: ranging from an average of 7.25% for a 720+ score to over 100% for those with sub – 600 scores.

Prosper Loans Overview 

We’ve created a list of the best and worst of Prosper Loans:


  • Automated Quick Invest Feature
  • Excellent loan profile
  • Better search filters
  • Smaller amount for diversification
  • No fixed increments to invest
  • Soft credit check 
  • No prepayment penalty


  • Smaller pool of loans
  • Slightly higher risk 
  • Not everyone can invest
  • Interest rates can be high for some borrowers

What Fees Does Prosper Loans Charge?

Prospers personal loans allow borrowers to get up to $40,000, with the option to repay over either a 3- or 5- year term. While Prosper offers industry low rates for those with excellent credit, its rates for those with a fair credit score make it one of the best lenders for borrowers with fair credit.

Firstly, there is an origination fee of 2.41% to 5%, based on both your loan details and your credit. This is taken from the loan automatically before it’s funded into your account, so be sure to add this into your calculations when requesting a loan amount.

For loan repayments, expect them to be taken from your account automatically by default. Should you fail to pay, you will be charged a fee of $15. Late fees will be charged for payments made 15 days or later.

What Are Prosper Loans’ Interest Rates?

As with most loans, Interest rates are a part of the package. As a whole, COVID-19 has impacted lines of credit, resulting in reduced rates across the board. 

With Prosper, the interest rate charged is based on a borrower’s credit score. It also takes into consideration other factors like your annual income. Borrowers will get assigned a rating from AA (excellent) to HR (first-time borrowers).

Currently, interest rates with Prosper range from 7.95% APR to 35.99% APR. With industry rates averaging around 10% to 28%, those with excellent credit will get an industry-low rate.

Prosper Loans Compared

Estimated APR

7.95 - 35.99%

  • Term Loans: 7 - 30%
  • Startup Loans: 7.9 - 19.9%
Minimum credit score



Loan term

3 - 5 years

1 - 5 years

Loan amount

$2,000 - $40,000

$5,000 - $500,000

Best for

High-credit borrowers

Small business loans

Estimated APR
  • Term Loans: 7 - 30%
  • Startup Loans: 7.9 - 19.9%

5.99 - 24.99%

Minimum credit score



Loan term

1 - 5 years

2 - 5 years

Loan amount

$5,000 - $500,000

$5,000 - $35,000

Best for

Small business loans

Borrowers with good credit


Estimated APR

7.95 - 35.99%

  • Term Loans: 7 - 30%
  • Startup Loans: 7.9 - 19.9%

5.99 - 24.99%

Minimum credit score




Loan term

3 - 5 years

1 - 5 years

2 - 5 years

Loan amount

$2,000 - $40,000

$5,000 - $500,000

$5,000 - $35,000

Best for

High-credit borrowers

Small business loans

Borrowers with good credit

How Does Prosper Loans Work?

How to Qualify for Prosper Loans

A likely key reason for the increase in people inquiring about personal loans is their accessibility. So, how accessible is Prosper Loans?

The Prosper sign up process is quick and easy. To discover your rate instantly you can just complete a short form online. According to Prosper, it obtains your credit score through TransUnion and requests the following criteria:

  • Income greater than $0.
  • A debt-to-income ratio below 50%.
  • No bankruptcies in the past 12 months.
  • Less than 5 credit inquiries in the last 6 months.
  • A Minimum of 3 open credit lines on a credit report.

What’s the Application Process Like? 

If you match this criteria, here’s a step-by-step guide through the Prosper application process so you know exactly what to expect and get no surprises when applying.

Prosper Check Your Rate Page
Prosper Loans offers a check your rate feature.

When on the Prosper website, click one of the Check Your Rate buttons and begin by entering the amount you’d prefer to borrow (again, don’t forget to account for the origination fee).

Prosper loan Application Process
Prosper’s personal loan application process is quick and easy.

Then, Prosper will ask for some information on the purpose of the loan. If you select “other”, a note will appear telling you that your loan will not be awarded if you plan to use it for post-secondary education expenses. This includes fees, tuition, books, and/or room and boarding costs at a university, college, or vocational school.

Prosper Application Process
Prosper will ask if you want to add a co-signer.

Next, you’ll be asked to pick whether you want to take out a loan by yourself if you’d like to add a cosigner – one of the reasons Prosper Loans is one of the top low interest personal loans. However, it must be noted that the co-signer- will also be obligated to make repayments too.

Once you have all the information about the loan entered, you will be asked to start answering some questions about yourself.

Prosper Application Personal Details
You’ll be asked to enter some initial details.

On the next pages you’ll be asked to enter your contact information and annual income. Prosper will use this information to determine whether you will be able to afford consistent repayments.

Prosper Application Income Details
You’ll have to disclose your primary source of income.

When you enter your annual income along with your monthly rental costs, the last steps are to enter your password and create a password. This can all be done in a few minutes, and your rate will come through in just a few moments.

Once you’ve applied, you might receive a call from Prosper asking more questions about your income, employer, and credit history, if needed. When it comes to your credit history, it’s good to know that it is possible to remove something from your credit report, as it might matter for your financial future. 

The additional screening process could take several days to complete before the loan gets approved.

Where Prosper Loans Shines

We’ve covered, fees, and how Prosper Loans works, now here are some of the best features with Prosper Loans.

Prosper Loan Purposes 

One reason for the popularity of personal loans is their flexibility. Borrowers can use a loan for almost anything, from buying an engagement ring to a boat.

In a survey by Lending Tree, we see that 61% of customers will use a loan to pay off debt, broken down into 39.2% using it for general debt consolidation and 21.8% for credit card refinancing.

The overall survey’s findings highlights that personal loans have increased in popularity because of their simple and effective means of consolidating debt, with the other responses pointing to the flexibility of the loan.

What Can I Use a Prosper Loan For?

Here are some of the purposes that Prosper allows its loans to be used for:

  • Debt Consolidation
  • Auto and Vehicle Loans (for purchase or refinance)
  • Small Business Loans
  • Home Improvement
  • Short-term and Bridge Loans
  • Baby and Adoption Loans
  • Special Occasion Loans
  • Engagement Ring Financing
  • Military Loans
  • “Green” Loans (financing for installing renewable energy systems)

Instant Rate Check

The Prosper application process takes less than five minutes to complete. You can also find out your interest rate instantly. While some loans will negatively affect your credit score by checking them, Prosper uses a soft credit check that will not. 

Those with better credit generally get a lower rate, which is why using the leading credit repair software to fix bad credit can ultimately save you money.

Unsecured Loans

With the personal loan boom, Prosper offers something that borrowers want: flexibility. Personal loans won’t tie your assets to your loan. Were you to stop paying , the lender will not have the right to seize any assets. Instead, they will penalize you with fees that will negatively affect your credit score.

Fixed-Rate Loans

The loans come with a fixed interest rate throughout the lifetime of the loan. The shorter the loan range, the lower the rate. For example, a 3 year loan will have a lower rate than a 5 year loan. 

No Prepayment Penalty

Loans can be paid off early with no prepayment fees. If you pay off your loan early, or even pay a little more every month, you will save on interest over the loan term.

Accessible to Those With Less Than Excellent Credit

While applicants with excellent credit scores will secure the best rates, those with a less than perfect score can still access Prosper loans. Applicants can potentially qualify for a loan with a credit score of only 640. If your credit score is less than this, there are other loans for borrowers with bad credit that guarantee your approval.

Special Loans: The Small Business Loan & the Prosper Healthcare Loan

 Something that’s especially interesting about Prosper Loans, is the small business loan. This is because typically, business owners have a tougher time securing financing, particularly when it comes to new or recently established ventures. Small businesses could do a lot with a loan of up to $40,000.

Another specialized option is the Prosper Healthcare Loan (PHL). This is a specialized loan program that customers can access to help finance a medical procedure. More specifically, the PHL is for financing medical procedures that health insurers do not typically cover.

Medical procedures that the PHL program covers:

  • Cosmetic dentistry
  • Cosmetic and plastic surgery
  • Bariatric surgery
  • Fertility and reproductive procedures

This program also allows borrowers to get a maximum of $40,000 on a 5 year repayment plan. The loan can be applied for online or by phone, and get a preapproval in about 2 minutes. 

This is a soft inquiry and so your credit score will not be impacted negatively. To qualify for the PHL loan, you will need to work with a doctor or healthcare provider who will participate in the PHL program.To establish this, you can email Prosper Healthcare Support from the website.


As well as personal loans, Prosper added HELOC (home equity lines of credit). This is a loan that is secured by your house to access up to $300,000. Rates for HELOC start at 2.99%.

In the first quarter of 2019, available home equity reached an all-time high of $6.3 trillion. While equity is available to many homeowners, the traditional method of getting a HELOC (home equity lines of credit) was complex, long and cumbersome.

Prosper has created a fast and easy process to obtain a HELOC, through a partnership with BBVA. This partnership is a rare example of a fintech platform working successfully with a bank to offer customers a long-term relationship product such as HELOC to customers with ease and efficiency.

Key Benefits of HELOC

  • Quick and simple online application
  • Competitive interest rates
  • Flexible monthly repayments, and a line of credit is accessible in weeks as opposed to months
  • Access to a dedicated client service team

Peer-to-Peer Investing

Prosper is for more than just borrowers. Those looking to invest can choose from the loans they prefer and Prosper will build a portfolio automatically for you. 

While we will go into more detail about this below, we will note that historic returns with Prosper’s peer-to-peer investing averages 5.1%, according to Prosper. However, results can vary widely depending on the portfolio of loans chosen.

Where Prosper Loans Could Improve

While Prosper provides an innovative platform for both borrowers and investors, there is an origination fee, and as a whole, the process can take longer than competitors.

Origination Fees

Borrowers will usually get charged a higher origination fee of 5%. And while those with excellent credit will be charged a fee of 2.4%, competitors like Lending Club reward borrowers with excellent credit with a charge of just 1%. For this reason, many investors use top credit monitoring services to keep their rating up.

Slower Matching Process

Investors are required to commit to funding the loan before Prosper’s review process. Because Prosper is not a bank – it’s an individual or company investing in your – they have 14 days to decide if they want to invest in your loan or not – even if Prosper has already completed the review and approved the application. 

While you might get some preliminary figures in the application process, like an interest rate and repayment terms, lenders need to fund your loan.

Should your loan request not get a minimum of 70% funding within 14 days then the application will be declined.

Lower Loan Amount

Loans with Prosper only go up to $40,000. Competitors like SoFi for example, offer up to $100,000 and Payoff offers up to $50,000.

Lack of Liquidity

When investing in P2P loan notes, there is an expectation that you will hold them until they mature. This means that if you decide to liquidate your investments, you won’t have the option to sell them to other investors. The only way you can regain your investment is by holding them until the loans are paid off with the loan term.

Slightly Riskier for Investors

The notes available to investors carry slightly more risk and come with a higher APR than some competitors like Lending Club.

Who is Prosper Loans Best for?

Debt Consolidation for Bad Credit

Prosper is a leading lender for debt consolidation loans for those with bad credit. Those with several high interest credit cards might be able to streamline payments into one monthly payment with a lower interest rate at Prosper. If you get a rate that’s lower than the rate on your card, you will save money and might be able to pay off your loan quicker.

High-Credit Borrowers

Those with good to excellent credit could qualify for industry low rates. The best rate offered is 7.95% APR which is competitive for almost every borrowing purpose, apart from a home loan.

Alternative Investors

With the impact of COVID-19 on the P2P lending market, it is set to grow rapidly in the coming years. This could make it an ideal time for investors looking to diversify their portfolio outside of the stock and bond markets. 

Furthermore, peer-to-peer loans can produce a much higher ROI than those from a bank. In fact, Prosper states that the average rate of return by investors on the platform is 5.1% per year.

Prosper’s average investment returns by grade is as follows:

Prosper’s average ROI
Prosper’s average ROI on its loan investments.

Some of Prosper’s investment processes are unique to the platform. If investors can option a General Investment Account or an IRA account. 

Prosper’s minimum investment requirement is as low as $25 for individual accounts. IRA accounts have a minimum investment of $5,000.

Investors will pay a servicing and a collections fee. The servicing fee is 1% of the outstanding balance of a loan.

So, if the loan pays 8%, you will get a net return of 7%. The collection fee is charged when the loan goes into collection, which could be up to 17%.

Investing in Prosper Loans:

  • Must be least 18 years old
  • Hold a valid social security number and driver’s license
  • Meet suitability requirements established by your state of respidents
  • Available in 31 states

Who Should Not Use Prosper 

Borrowers Who Don’t Want to Pay Origination Fees

As we mentioned, Prosper charges a 5% origination fee. Many lenders, including Payoff, don’t charge any fees at the beginning of a loan. The fee is also higher than some competitors like Lending Club who charges a 2.4% fee.

Those Looking for an Educational Loan

Prosper loans can be used for just about any reason you can think of. Though, there is one exception. Prosper loans cannot be used for post-secondary educational expenses. Why?

This is because some federal law rules do not work with P2P lending. 

More specifically, federal law states that borrowers must have a minimum of 30 days to decide whether they will accept or reject the loan offer. Since Prosper doesn’t offer this window, they cannot offer loans for educational purposes.

Risk-Averse Investors

Although investing in Prosper Loans can be a good investing decision, it is riskier than bank investments. For example, when you receive payments on your investment each month, you receive principal too. 

This means that the loan will be paid off within 3 to 5 years. If you were using these payments as income, your account could drop to 0. In addition, loan default rates are high, especially on lower-grade loans. Should a loan default, you will lose your investment in the loan.

Of course, the more loans you invest in the less risk but there’s also a chance that a borrower will stop making repayments.

Is Prosper or Lending Club Better?

QualificationProsper LoansLending Club Personal Loans
Minimum Credit Score640+600+
APRfrom 6.95% APR to 35.99% APR10.68 - 35.89%
Loan Range3 or 5 year terms3 or 5 year terms
Loan Amount$2,000 to $40,000$1,000 to $40,000
Best ForHigh-credit borrowersGood credit score and a long credit history

Prosper Loans and Lending Club both have different qualifications. Lending club requires a lower credit score, a lower debt-to-income ratio, and longer credit history. In contrast, Prosper has developed a proprietary scoring formula called the Prosper Score.

Summary: Is Prosper Loans a Good Option?

With enduring demand for personal loans, and the Brexit finale up-and-coming, P2P lenders will be tested. Prosper Loans is set to past this test due to its sheer scale and resources. Borrowers with an excellent credit score should, therefore, look to Prosper Loans as an option.

Though, it also offers competitive fees for those with a less than perfect score. The platform accepts applications for a huge variety of purposes, except post-secondary expenses.

Borrowers can also potentially benefit from Prosper’s home equity lines of credit that offer loans of up to $300,000 with rates starting from 2.99%.

The platforms origination fees, and slow matching process might put some potential borrowers off.

Investors, on the other hand, can expect a high ROI of 7.41%, according to Prosper themselves. This is a much higher return than what you can expect from traditional fixed income investments, like those from your local bank. 

However, you should be aware that they are slightly riskier and there is a lack of liquidity in these investments.

Prosper Loans FAQs

  • Is prosper a good lender?

    You can access personal loans of up to $40,000, though those with less than excellent interest rates could be met with higher rates. According to Prosper, the company has funded $16 billion in loans to over 1 million customers which makes it a reputable lender.

  • What is the minimum credit score for a Prosper loan?

    The minimum credit score to be considered for a Prosper loan is 640. However, potential borrowers will also need to meet some additional criteria.

    These include having an income of more than $0, a debt-to-income ratio below 50%, a minimum of 3 open credit lines on their credit report, as well as less than 5 credit inquiries in the last 5 months. Knowing how to properly understand a credit report will help you go a long way.

  • How long does it take for a Prosper loan to be approved?

    The application process with Prosper only takes a few minutes however, investors have 14 days to decide whether they want to fund the loan or not. 

  • Do Prosper Loans hurt your credit?

    Checking your rate with Prosper won’t hurt your credit. This company uses a soft credit check that is visible to you but not to other lenders.

  • Does Prosper call your employer?

    In order to verify a borrower’s income, Prosper will request to see documents such as tax returns, recent pay stubs, or bank statements. To verify employment, Prosper may contact your employer or use a database.

  • Can you pay off a Prosper loan early?

    Prosper does not charge any prepayment fee or penalty fee for paying off a loan before the loan term is over. You can pay off your loan or check how much you have left on your loan at any stage by signing into your Prosper account. A line titled “Remaining balance” will show the total amount due at that time.

  • Does prosper do a hard inquiry?

    Prosper loans will use a soft inquiry for prequalification purposes. This will not affect your credit score.

    A hard inquiry will be used once your offer is accepted. A hard enquiry will impact your credit score temporarily.

  • Does Prosper Loans have origination fees?

    Yes, Prosper Loans charges an origination fee of 5% when your loan is approved. Those with excellent credit will be charged a fee of only 2.4%.

  • What happens if you default on a Prosper loan?

    When it comes to fixed rate loans, they can be charged off after 120 days of nonpayment, two months less than for credit cards. This means that if your account is delinquent for four months, it can be reported as a loss and therefore can negatively impact your credit score.

  • Which credit bureau does Prosper use?

    According to Prosper, it uses TransUnion to access your credit score. It also requires a debt-to-income ratio of 50%.

  • Can you change your Prosper Loans payment date?

    Unfortunately, no. Prosper does not currently allow borrowers to change their payment due date.

  • What are the 5 C’s of the credit decision?

    In the lending industry, there are 5 characteristics of the borrower that are weighed against the conditions of the loan, in an attempt to estimate the chance of default and, in turn, the risk involved for the lender. These are character, capacity, collateral, and conditions.

  • What is the best reason to give when applying for a personal loan?

    Your reason for getting a personal loan won’t affect your interest. However, debt consolidation is the most popular reason given for a personal loan. Debt consolidation works by paying off credit card debt from multiple cards and streamlining them into one easy, monthly payment, resulting in a lower interest rate.

  • Why would a loan application be rejected?

    In most cases, borrowers are denied loans either because they have bad, or no credit. Lenders look to see if you borrowed money in the past and your track record of repayments which is reflected in your FICO scores.

    If it doesn’t look like you will be able to repay the new debt then your application will be denied.

Prosper Loans and the Competition

See how Prosper Loans compares to the top lending platforms by reading one of the reviews below.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.