About Prosper Loans
Prosper Loans was founded in 2006 as a part of the Prosper Marketplace Inc. and Prosper Funding LLC peer-to-peer lending industry. It is a place where borrowers and lenders meet online to exchange funds under certain conditions.
Prosper Loans operates through the website Prosper.com and provides a way for private investors to employ their money in the form of personal loans. Not only that, but it also paves a way for lenders to request to borrow money from these investors.
From 2006 to 2009, the company operated a variable rate model, where borrowers and lenders decided on the interest rate and conditions of each exchange through a Dutch auction-like model.
Since 2010, Prosper changed the way this was done and started using pre-set rates based on the borrowers’ credit risk.
In 2016, the company continued to improve its business model by launching the mobile app Prosper Daily. It allows clients to view all of their financial accounts in one place, track their spending and make financial decisions in a more efficient manner.
Unlike traditional lending institutions such as banks and investment funds, Prosper does not lend you money. Instead, you are able to borrow money from a larger group of investors through the website.
In other words, it is a meeting place of potential borrowers and lenders. The company simply acts as the loan underwriter and charges fees for its mediator services.
How Does It Work?
When you are looking to invest or borrow money through Prosper, you need to know that there are no restrictions in terms of using the money acquired this way. In addition, if you wish to apply for a personal loan through them, you don’t need to pledge collateral to get approved.
Instead, your income and your credit score will be the decisive elements of your application. As a result, you will be approved to repay your loan over three to five years, depending on credit rating and the amount of money you are looking to lend.
To borrow money, simply submit your application online and provide your basic information. This includes your address and Social Security number as well as your income information, along with adequate proof and bank account information.
Investors are able to browse through the creditworthy borrowers, select the individual loans, or use the Auto Invest feature to build a target portfolio based on the selected criteria. That way, they are able to earn solid monthly returns that are deposited directly into their account.
Cost and Price Plans
Borrowing through Prosper.com is usually much cheaper than the traditional ways of acquiring money, including credit cards.
However, if you have a bad credit score, you will not be able to use their services. The company has a minimum credit score requirement of 640 and the better your score is, the less money you will have to pay for your loan.
You will pay an interest rate, just like with any other loan. However, you will have to pay some other fees as well, such as origination fee, check fee and late fee. The annual percentage fee (APR) on loans ranges from 5.99% to 35.99%.
The origination fee is calculated as a percentage (1-5%) of the amount you borrow and is automatically deducted from your loan proceeds. Check processing charge is applied to the date check received and is around $5.
If you fail to pay your debt within fifteen calendar days after the due date, you will be charged with a late fee that amounts to $15 or 5% of the unpaid amount.
In addition to all of this, if you try to make a payment and it fails because there are insufficient funds on your account, you will also be charged with a $15 insufficient funds fee for every failed payment.
On the other hand, if you pay off the debt earlier than it is arranged, there are no prepayment fees. There are no additional costs and fees for using the Auto Invest option, either.
To reach their customer support team, send an email to [email protected] If you prefer a phone call, you are able to get the Borrower Services on 1-866-615-6319 and Investor Services on 1-877-646-59-22.
Lastly, if you wish to report a security issue, send an email to [email protected]
Prosper.com is a legitimate online lender that connects and works with several millions of satisfied members. It received its BBB accreditation in 2012 and has an A+ rating. However, you should be careful, as the company’s name is lately being used in frauds.
The real website will never charge you with any fees upfront and if you identify such suspicious activity, you are to file a complaint with IC3.
Competitors and Alternatives
To assess the question “do Prosper loans affect/hurt your credit score?” make sure you are able to pay off your debts and loan money for the right purposes. However, you should also evaluate all of the alternatives, including competing companies as well.
Where to Buy?
To borrow or lend money with this company, apply online on its official website at https://www.prosper.com.
If you are looking to borrow or invest your money into personal loans through a peer-to-peer secure system, Prosper is the way to go.
However, be sure to assess your options carefully, as getting behind on your payments may result not only in additional fees but will cause your credit score to go down as well.