Is Prosper Legit — What Can You Expect From Prosper?

Andrew Reyes
Two professionals holding a folder in one hand and a phone in the other.

Prosper loans is a peer-to-peer lending platform that provides personal loans to consumers so they can consolidate debt, pay off student loans, or finance home improvements. Investors pool their money together through the platform to fund consumer loans. When borrowers pay off these loans, investors profit from the interest charged throughout the loan term.

If a borrower fails to pay off a loan through Prosper, all the investors involved in the funding of the loan take a hit. However, since there are many investors involved in each loan, the loss of funds isn’t as detrimental as it would be if there was only one lender funding the entire loan.

A consumer may apply for a Prosper loan if they want to fund a vacation, pay off debt, or host an event, such as a wedding or family reunion. If you’re considering taking out a personal loan, it’s important to review how Prosper works to determine if it’s the right lending platform for you.

Table of Contents

Pros and Cons

Prosper loan customers have reported both pros and cons to taking out a loan through the lending platform.


  • Apply online: You can apply for a Prosper loan directly on the website when you provide a few key pieces of information. The platform runs a soft credit history inquiry, which doesn’t affect your score, and instantly provides you with the loan options you qualify for.
  • No prepayment penalties: If you have the means to pay off your loan balance early, you’re not responsible for any prepayment penalties.
  • Change payment due date: Prosper allows you to change your loan payment due date to a time in the month that meets your needs.
  • No minimum annual income: While borrowers with higher earnings will receive better interest rates and loan terms, there are no annual income minimums to qualify for a Prosper loan.


  • Interest rates may be high: Unless you have a good credit score, you may be offered a loan with a high interest rate, which may not be helpful if you’re attempting to consolidate debt or pay off other loans.
  • Origination fee: Depending on your credit score, Prosper loans may charge you an origination fee when you apply for a personal loan.
  • Low loan amount: You can only qualify for a loan amount up to $40,000 through Prosper loans, which is generally a bit lower than some of its competing lender platforms.
  • Late payment and insufficient funds fees: If your payment is late, Prosper loans charges $15 or 5% of the payment amount, whichever is higher. If you make a payment but it’s returned for insufficient funds, you must pay a $15 fee.

Prosper Loan Details

The specific loan terms you’re offered after you apply for a Prosper loan will vary and are based on how the company’s risk rating system views you as a borrower. The system analyzes your credit history and score, your income, and current debts to determine the terms you qualify for.

Once the system has completed its rating, your profile is shopped around to different investors. You must have enough investor interest in your loan to fund 70% of it within 14 days or your application expires.

To qualify for a loan through this lending platform, you must have a credit score of at least 640 and at least two years of credit history. It’s also required that you have no bankruptcies within the past year and that there are less than five credit bureau inquiries on your credit report from the past six months. Excluding your home mortgage, your debt-to-income ratio must be 50% or less.

To increase your chances of qualifying for a good interest rate, you can apply for a joint loan with a co-applicant who has a stronger credit history. If you qualify for a loan, the annual percentage rate (APR) you’re offered will be between 7.95% and 35.99%.

Your loan term could be between three to five years and the personal loan amount you qualify for will be between $2,000 and $40,000. Once you’re approved and choose the loan terms that suit you, your loan is funded directly into your account within three to five days.

Are Prosper Loans Right for Me?

When deciding if a Prosper loan is right for you, it’s important to consider your current economic situation and credit history. If you have a good credit score and show strong financial stability, it’s more likely that investors will be attracted to your loan and you’ll be offered favorable loan terms.

If you need to work on improving your credit score and you don’t have a joint applicant to help raise your creditworthiness, the loan terms you’re offered may not benefit your financial situation. Whether a Prosper loan is the right personal loan for you also depends on what you plan to use the money for. If you want to consolidate debt or pay off other loans, it’s only beneficial if the loan terms you’re offered are better than what you have now.

Before you agree to the loan that you’re offered, ensure you understand your financial responsibility. Under the Truth in Lending Act (TILA), Prosper must disclose all fees and payments you’re responsible for with the loan before you agree to terms. Ensure you feel confident in your ability to pay the loan back before you move forward with the loan application process.

How to Qualify and Apply for Prosper Personal Loans

To be eligible for a Prosper loan, you must meet specific qualifications, which include the following:

  • A credit score of at least 640.
  • At least two years of credit history.
  • No bankruptcies in your last year of financial history.
  • A maximum debt-to-income ratio of 50%, excluding your home mortgage.
  • Less than five credit inquiries through bureaus in the past six months.

You can complete an online application for a Prosper loan on the company’s website. To apply for a personal loan with Prosper, follow these steps:

  1. Provide information on how much you want to borrow.
  2. Provide your contact information and other financial information when prompted.
  3. Give permission for a soft credit inquiry.
  4. Once approved, review the different loans you qualify for.
  5. Choose the loan term that works best for you.
  6. Receive your loan amount directly in your bank account within five days.
  7. Set up an online account with Prosper so you can make payments and manage your loan.

Whether you need a personal loan to update your spare bathroom or pay down your student loan debt, Prosper may be able to provide you with the money you need.

Before you apply for a personal loan with Prosper, review the company’s borrower qualifications to ensure you’re eligible. If you’re offered a loan through the lending platform, analyze the interest rate, loan amount, and monthly payments before you agree to the terms.

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