Need Help Finding a Loan?
- Date Established
- San Francisco, CA
- Competitive terms and fees
- Fast application process
- No prepayment penalty
- Good customer support
- Excellent support materials
- Must have at least fair credit
- Potential application process delays
While it’s unlikely the Vulcans are referring to this company in their traditional greeting, getting a loan from Prosper may be the logical thing to do.
Founded in 2005, Prosper is at the forefront of the online lending movement. The company only offers personal loans, but these loans can be used for business purposes. Because the underwriters are taking your personal creditworthiness into account (as opposed to that of your business), this type of lending is best used for startups. For more information on how you can use a personal loan for business, check out this article.
While some customers have expressed frustration with certain aspects of Prosper’s service, most customers report positive experiences. I’d still recommend making a few comparisons before settling, but if Prosper offers you the best terms and fees, there’s certainly no compelling reason to turn them down.
Read on for the details!
Table of Contents
Prosper offers personal loans that can be used for businesses.
These are the qualifications required to get a loan from Prosper:
|Time in business:||N/A|
Because creditworthiness is based entirely on you and not on your business, Prosper does not require a certain time in business or revenue.
Instead, Prosper will look at your personal creditworthiness and financials. In addition to having a credit score of 640 or above, you need to have:
- A debt-to-income ratio below 50%
- A source of income
- No bankruptcies in the last year
- Fewer than 7 credit inquiries in the last 6 months
- Minimum 3 open trades on your credit report
- Minimum credit history of 2 years
If you meet all those qualifications, you have a pretty good chance of being accepted.
Terms & Fees
These are the terms and fees for Prosper’s loans:
|Borrowing amount:||$2,000 – $40,000|
|Term length:||3 or 5 years|
|Origination fee:||2.4% – 5%|
|APR:||6.95% – 35.99%|
Prosper’s loans are traditional, fixed-term installment loans. That is, you will pay a set amount each month until the principal and accrued interest have been repaid. Repayments are made on a monthly basis.
The lender charges an origination fee, which is deducted from your principal before Prosper sends the loan to you. Otherwise, borrowers may incur fees for late or failed payments or paying by check, but for no other reasons (such as repaying your loan early).
The application process is performed completely online.
To begin the process, you’ll be required to check your rate. This involves making an account and entering basic information about yourself. Prosper will use this information to determine if you’re eligible for a loan and, if so, what terms and fees they can offer you. This step does not affect your credit.
If you choose to continue the process, you will have to fill out a complete, more detailed application. When your application is complete, your profile will be made available on Prosper’s marketplace for funding. Prosper will also run a hard credit check at this point (which will affect your credit) and perform other steps to verify your information.
Assuming everything checks out, once funded your loan will be sent to your bank account. Generally, the time from application to funding is a week or less, but may be longer depending on how long the application takes or how long your loan takes to fund.
Sales & Advertising Transparency
Although you can find information if you dig through their help center and other difficult-to-access pages on the website, the Prosper website doesn’t provide a whole lot of useful information up-front. I’d like to see a more overt disclosure of Prosper’s rates and fees for easy comparison of loan options and a more thorough rundown of what to expect during the application process.
Customer Service & Technical Support
Prosper has a very in-depth help center, which is capable of answering all your basic questions and more.
If your question is not answered there, or if you encounter a technical error, Prosper is available by phone. If you have a Prosper account, you can also email for assistance.
Most current customers are happy with the level of support provided. Overall, reviewers say that customer service is knowledgeable and helpful, though some have had frustrating experiences when trying to sort out technical problems or get a hold of a specific representative (see below).
Negative Reviews & Complaints
In the last three years, Prosper has racked up 137 complaints on the BBB. Given the size of Prosper, and that some complaints come from investors, this is not a surprising amount of complaints. The company also has numerous customer reviews on TrustPilot and Credit Karma.
Most reviews on the borrower side tend to revolve around the same problems:
- Denial After Pre-Approval: Getting a letter stating that you’ve been “pre-approved” is basically a marketing tactic. Once Prosper gathers more information about your situation, they might find that you do not meet their underwriting standards. You are not officially approved until your information has been verified and your loan funded by investors.
- Expensive Rates & Fees: Some customers felt that their interest rate or origination fee was too high.
- Inability To Change Due Dates: Currently, your monthly payments are due on the day your loan originated. If you received your loan on the 15th of January, your monthly due date is going to be the 15th of every month until you’ve paid off your loan. This can be less-than-convenient for some people, depending upon when or how they get their income.
- Technical Errors: Some customers have reported problems with Prosper’s application, whether its because they had to submit documents multiple times, the auto withdrawal system malfunctioned, or something else. Occasionally the problems are due to borrower error, but sometimes it’s a fault in Prosper’s systems.
- Customer Service Problems: Some customers have reported having difficulty getting in contact with customer service representatives for verification calls or other problems that arise during the application and borrowing process.
Positive Reviews & Testimonials
Prosper has some positive experience reviews on the BBB, as well as a number of positive reviews on other sites. Reviewers are happiest with the:
- Quick application process
- Transparent advertising
- Helpful customer service
- Automatic repayments
In addition, many like the fact that people with good credit can potentially get low interest rates, and that the loans are funded by individual investors, not big businesses.
Barring minor technical or verification problems, Prosper loans are easy to apply for and easy to pay off. Despite the company’s poorly organized website, you’ll never be surprised by hidden fees or other unexpected clauses. Obviously, whatever else it is, Prosper is not a scam.
Merchants with the absolute best credit scores benefit from getting low interest rates. You may be able to get better rates if you go to a bank, and those with the inclination and ability should certainly do so. On the other hand, due to the streamlined application process, Prosper has the potential to save you valuable time and effort.
For qualified entrepreneurs that cannot yet get a loan based on the strength of their business, Prosper is certainly worth considering.
Interested in your other options? Check out our full list of Startup Business Loan Reviews.
To learn more about how we score our reviews, see our Business Loan Rating Criteria.