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If you are in debt, you can find relief in a variety of ways through different financial services. One of the options is a peer to peer loan. Prosper is one of the online lender companies that offers this type of loan to individuals who have good credit. If you need a loan, you might want to consider one through Prosper. Here is a review to help you decide if its peer to peer loans are right for you.

Prosper is Good for Users Who Have/Want

  • Good Credit Score: Prosper is a good fit for individuals who have a good credit score. Generally, the minimum score for Prosper is 640, but on average, Prosper’s customers have a credit score of 703.
  • Good Annual Income: Although there is really no minimum salary requirement, customers tend to have a good annual income on average. Prosper’s customers have an average income of $76,000 and typically have multiple lines of credit.
  • Loan from a Longtime Lender: Prosper was founded in San Francisco, California in 2006. In its 11 years of existence, the company has originated over $7 billion in loans to customers.
  • App to Manage Money: Prosper is the owner of the personal finance app BillGuard, which is now known as Prosper Daily. The app allows borrowers to track their spending habits and loan payments, as well as offers a free service of monitoring their credit score and keep on top of credit card payments.

How Does Prosper Work?

Unlike other online lenders, Prosper doesn’t fund loans with its own money. Instead, it has investors who charge a fee that matches up with approved borrowers and services all types of loans. From there, the lender gives all borrowers a grade after analyzing data about their past borrowing behavior and combining it with their credit scores and debt to income ratios. The grade a borrower gets determines whether an investor wants to fund a loan to them as well as the interest rate the individual gets with a loan.

Loans from Prosper aren’t as flexible as those from other companies. There is a strict payment schedule that cannot be adjusted and the borrower can face a late fee if a payment is missed. However, the company’s app comes in handy for just this purpose as it allows users to stay on top of their payments.

How to Apply for a Loan with Prosper

One of the things to take note of with Prosper is that the application process is a bit more complicated than that of other loans. The process takes around three to five days but may take even longer depending on how fast you are able to provide appropriate documents.

First, you fill out a loan application on the company’s website for the amount you want. After you submit it, Prosper does a soft credit check from Experian, one of the three major credit bureaus. It doesn’t affect your credit score but allows the company to come up with terms for your loan, interest rates and more.

Then, you can look through loan offers and choose one that’s best for you. Afterward, you must fill out another application that asks for more details and agree to the terms of the loan. Your loan will them go up on Proper’s site for investors to fund.

While you wait for funding for your loan, Prosper verifies your identity, income and other information that can result in you having to provide more documents. You can check under your loan listing whether you still need more information for verification. The more information is verified, the more credible you appear to investors.

If your loan is funded by investors at 70 percent or greater, you can then borrow that amount. However, if your loan is funded under that amount, you can create a new listing.

After your loan is funded and you have been verified, the company will perform a hard credit check, which can affect your credit scores. At this point, the funds from the loan are also transferred into your account, except for the origination fee.

You can easily keep track of your spending and loan payments by using the Prosper Daily app.

Overall, the loan from Prosper is fair, but there are stringent requirements that might prevent you from qualifying. Likewise, even if you qualify for a loan, if investors are unwilling to finance your loan, it can very well be worth looking elsewhere at another company.