Prosper was one of the first peer-to-peer lending services, along with Lending Club, and one of the few originals to still be thriving. Peer-to-peer lending just means that ordinary people are not just the ones borrowing from Prosper, they are also the ones who fund the loans through investments. Basically, anyone can sign up to invest (after being approved by Prosper) and can choose to fully or partially fund any loan application that comes in.

How Does Prosper Work

Prosper works very similarly to Lending Club. You fill out an application online with personal and financial information. Once you submit that application, Prosper will assign your request a ranking that will help determine your interest rate. You then can specify your loan requirements, and include any other pertinent information that you think can help you get approved. Prosper then sends loan details to its investors, who have 14 days to decide whether to fund the loan.

Investors can decide whether to fund a portion of the loan or the whole thing. Multiple investors can contribute to one loan. Once your loan is funded, your funds will be in your bank account by the next business day.

If your loan is not fully funded but is funded up to 70 percent of the original amount, Prosper will allow you to approve a partial loan for that amount, although the decision to take it or not is up to you. You can also cancel the partial loan and apply elsewhere for the full loan amount.

What Sets Prosper Apart

The first thing that sets Prosper apart from other online loan services is not necessarily a plus. Prosper has pretty high standards when it comes to who it is lending money to. Generally, people applying for a loan must have a good credit score, a pretty solid income and a very low debt-to-income ratio. The payoff for this is lower interest rates in general, but Prosper isn’t the best online loan service for someone with poor credit.

In addition, Prosper offers partial loans, which is common for peer-to-peer lending services. If investors only decide to fund a portion of your loan request, and the total is 70 percent or more of your total loan request, Prosper will offer you a partial loan instead, which you can accept, or cancel and try applying again.

Another plus for Prosper is its financial tracking app. The company offers an app that you can use to track your finances and keep an eye on your spending. The app also will alert you if you have bills or subscriptions that you don’t need, so you can cancel and save money.

Like most other online loan services, Prosper offers both three-year and five-year loans. Terms of repayment are laid out in the loan agreement you sign.

Common Prosper Reviews

Generally, Prosper does well in professional consumer product reviews, usually getting at least four out of five stars. It’s no surprise, since Prosper has reasonable rates, proper funding and offers partial loans and financial education tools. The one downside most professional reviewers found was Prosper’s high standards when it comes to approving borrowers.

Customer reviews for Prosper are very similar. The company ranks 4.5 out of five stars on Credit Karma, with more than 300 Prosper customers leaving reviews. Most positive reviews talk about how fast and easy the service is, as well as how Prosper approved them when other banks had denied their loan request. Customers also seemed to like the payment process.

Negative reviews seem to focus on early repayment of loans. Although Prosper doesn’t charge an early payment fee, many consumers have apparently had problems with trying to pay back their loan early. Other negative reviews talk about the origination fee and high interest rates.

Is Prosper Right For You?

In a sea of stellar online loan services, Prosper can seem like the forgotten middle child of the family, but it actually has some great features that set it apart. Here are the questions to ask yourself when considering Prosper:

  • Do I have good credit?
  • Do I need the full amount of my loan?
  • Do I need help staying on top of my finances?
  • Do I have time to wait for the money?

Let’s be honest, Prosper requires a pretty good financial history in order to get approved for a loan. This can make it difficult for people with average or poor credit to be approved for even a partial loan. If you have average credit, there are other online loan services included in our reviews that would gladly accept you.

If you are not looking for an exact dollar amount or are OK taking what you can get, Prosper’s partial loan option might be good for you.

This is actually counter-intuitive since Prosper doesn’t usually approve people with money issues, but Prosper’s finance tracking app is a great tool to help you stay on top of your finances and make sure you are not paying for things you don’t need.

Like any peer-to-peer lending site, it is going to take a while to get approved for a loan. Once Prosper sends your loan application out to the investors, the investors have 14 days to decide whether to fund your loan. So if you don’t have more than two weeks to wait, this might not be the best service for you.

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