Prosper Review

Pros

• The application process is fast and easy
• No prepayment penalties
• Customer service is helpful

Cons

• Some additional fees are charged
• Funds can take a while to disburse

Prosper Overview

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), personal loans can be ideal for startups. Read our article on using personal loans for business to learn more.

While some customers have expressed frustration with certain aspects of Prosper’s service, most customers report positive experiences in their Prosper reviews. I’d still recommend making a few comparisons before deciding, but if Prosper offers you the best terms and fees, there’s no compelling reason to turn them down.

Read on for more details!

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Services Offered By Prosper

Prosper offers personal loans that can be used for business purposes.

Prosper Borrower Requirements

These are the loan requirements you need to meet to get a Prosper personal loan:

Because creditworthiness is based entirely on you and not on your business, Prosper does not require a certain amount of 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 seven credit inquiries in the last six months
• Minimum three open trades on your credit report
• Minimum credit history of two years

If you meet all those qualifications, you have a pretty good chance of being accepted.

Prosper Interest Rates & Fees

These are the terms & fees for Prosper’s loans:

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 every month.

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).

Application Process

The application process is performed completely online.

To begin the process, you’ll be required to check your rate. This involves creating 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 it can offer you. This step does not affect your credit.

If you choose to continue the process, you will have to fill out a 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, your loan, once funded, will be sent to your bank account. Generally, the total approval time is a week or less, but it may be longer, depending on how long the application takes or how long your loan takes to fund.

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Sales & Advertising Transparency

Although you can find information on Prosper’s personal loan terms & fees in small print at the bottom of the homepage (other information is available if you dig through the help center), I’d like to see a more prominent disclosure of Prosper’s rates & fees for an 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 — one 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. However, some have had frustrating experiences when trying to sort out technical problems or get ahold of a specific representative (see below).

Prosper Reviews, Complaints, & Testimonials

Negative Reviews & Complaints

In the last three years, Prosper has racked up 111 complaints on the BBB. Given the size of Prosper, and that some of the complaints come from investors, this is not a surprising number. Prosper 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 merely a marketing tactic. Once Prosper gathers more information about your situation, the company might find that you do not meet its underwriting standards. You won’t officially have your approval 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 it’s because they had to submit documents multiple times, the auto-withdrawal system malfunctioned, or something else. Occasionally the issues 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 reviews on the BBB as well as on other sites. Here’s what reviewers like about Prosper:

• Quick application process
• Transparent advertising
• Helpful customer service
• Automatic repayments

Additionally, many borrowers 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.

Prosper currently gets an average rating of 4.5 out of 5 on Trustpilot based on nearly 6,300 reviews. Clearly, a large majority of Prosper’s customers come away satisfied.

Final Verdict

Prosper loans are easy to apply for and to pay off, barring minor technical or verification problems. Despite the company’s poorly-organized website, you’ll never be surprised by hidden fees or other unexpected clauses. 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 worth considering.

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Are you interested in your other options? Check out our full list of startup business loan reviews.

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