Prosper Personal Loans Review
What are Prosper Personal Loans?
Prosper personal loans are generally used to allow people to consolidate debt. They can also enable people to take advantage of lower interest rates and obtain financing for a wide range of purposes.
This includes home renovations, medical expenses or various large purchases. The site offers peer-to-peer, or marketplace, lending. This means that instead of obtaining loans from a bank or standard lending institution, people obtain loans from individuals.
Investors are able to determine whether they want to fund a loan. This allows people who do invest to profit from their lending by collecting interest on these loans. Essentially, individual people act as a funding vehicle. Several individuals may choose to fund a single person’s loan. It’s not uncommon for loans that are thousands of dollars to be funded by numerous investors supplying as little as $25 per person.
The site works by matching prospective borrowers and lenders with each other. Both borrowers and lenders must be approved by the system to make or obtain loans. Prosper assigns ratings to borrowers based on their credit history. The Prosper rating a borrower receives determines their interest rate. It helps potential lenders to decide if they want to fund an individual’s loan.
Who Should Apply for Prosper Personal Loans?
Loans from Prosper are geared towards individuals with higher incomes and solid credit ratings. The minimum credit score to be eligible for a loan is 640, but the average for borrowers is 710. There’s no minimum income requirement to obtain a loan on the site, the average income for users is $86,400. You’ll also need to have a debt to income ratio of no more than 50 percent excluding a mortgage if you have one. Another peer-to-peer lender that is very similar to Prosper is Lending Club.
When you’re struggling with debt and have a poor credit rating, these probably aren’t the loans for you. However, if you’re looking for a loan with a very low interest rate or want to consolidate your debt , a Prosper loan may be a great solution.
What is Involved in the Prosper Loans Application Process?
Before you can actually apply for a loan, you have to go through the Prosper loans application process. This ensures you meet the minimum requirements to seek a loan through the site. Once you enter your information into the site, Prosper will run a soft credit check. This is the type of credit check that doesn’t reduce your credit rating.
Based on the data Prosper gathers, you’ll see a range of interest rates that may be available to you. Prosper will also let you know at that point if it’s likely that you’ll be eligible for a loan through the site. If you’re approved, you’ll then be able to set up a profile and a loan request.
There’s no charge to set up a loan request, and it only takes a few minutes to set up a profile. In your profile, you’re allowed to go into details about why you want a loan. You will also pick the type of interest rate you’re looking for or are willing to accept. Then you can provide other information that you may think will help lenders decide to fund your loan. There are also message boards where you can ask for help on using the site as well as tips for getting a loan funded.
How Is The Prosper Loan Funded?
Once you’ve set up a profile and loan request, lenders can start competing to fund your loan. This means that you may end up with a loan that is funded quickly and with a lower interest rate than the one you asked for. If lenders think you’re too big of a risk, you may have to wait a while to have your loan funded. There always is the possibility you may not obtain funding at all. If loans are funded up to 70 percent, you are able to take out the amount that’s been funded. Should the rest of your loan be funded, you’ll have access to those funds at that time.
If you’re able to obtain funding, you’ll be contacted by Prosper. At this point, your identity will be re-verified. The process is very thorough, and you can expect to send copies of your ID as well as two verifying documents. This can be utility bills or credit card statements, verifying your address. You’ll also likely need to speak with a Prosper representative.
How do Prosper Loans Work?
You should be aware that the terms of loans are less flexible than through other lenders. If you’re late on a payment, you’ll be charged a fee. Additionally, you can’t change your payment schedule; payments are withdrawn from your bank account on the first day of each month. Late payment fees are $15 or five percent of the payment amount owed, whichever is greater. If a payment doesn’t go through, you’ll be charged $15.
Prosper allows you to borrow between $2,000 and $35,000, and loan durations are available for either three or five years. However, you can pay off your loan early, and there’s no pre-payment penalty. The interest rates charged for loans can vary significantly, and the lowest available rate is just 5.99 percent while the highest rate you can be charged is 36 percent.
If you are approved for a loan, you can expect to be charged an origination fee, and it is between one and five percent of your total loan. The origination fee rate will be based on your Prosper score. Funds from your loan should arrive in your bank account between three and five days of approval.
What Are Alternative Online Personal Loan Options?
Using a lending network can be a great way to apply for an online personal loan. You just fill out one easy form and you get access to their network of lenders. This can help you get the exact personal loan you are qualified for and that meets your needs. To apply with a lending network just visit PersonalLoans.com – Personal Loans Up To $35,000