- Prosper's Background and Market Position: As the first peer-to-peer lending marketplace in the U.S., Prosper has originated over $29 billion since 2006, operates as a private company, and offers unique features like healthcare loans and a partial fee refund policy.
- Prosper's Key Advantages: Prosper provides a co-borrower option, specialized healthcare lending with lower APRs, no prepayment penalty, and a low complaint volume, making it appealing for specific borrower needs.
- Main Drawbacks of Prosper: With a higher APR floor at 8.99%, origination fees up to nearly 10%, no autopay discounts, and a maximum loan term of five years, Prosper may be less attractive to rate-sensitive or larger loan borrowers.
- Loan Terms, Rates, and Fees Overview: Prosper offers fixed-rate personal loans from $2,000 to $50,000, with APRs typically around 23.5%, and has a unique partial refund policy on prepayment that benefits early payoff borrowers.
- Regulatory and Reputation Insights: Despite a $3 million SEC settlement in 2019 for overstated returns and some regulatory issues, Prosper maintains a positive reputation with a Trustpilot rating of 4.6/5 and a strong volume of originations.
- Get a quote with Prosper Personal Loans.
Prosper Personal Loans Overview
Prosper holds a meaningful place in American finance as the first peer-to-peer lending marketplace in the United States. Founded in 2005 by Chris Larsen (who would later co-found Ripple) and John Witchel, Prosper launched its platform in 2006 with a radical idea: let individual investors fund personal loans directly, cutting out the traditional bank. That model attracted regulators’ attention, and the SEC shut Prosper down for nine months in 2008-2009 to require registration of its lending notes as securities. The company reopened, rebuilt, and has since originated more than $29 billion in loans through its marketplace.
Today, Prosper operates as a private company with approximately 490 employees. Loans are originated by WebBank, a Utah-chartered industrial bank regulated by the FDIC, and then listed on Prosper’s marketplace for investor funding. Full-year 2024 revenue was $173 million. The company has been through several leadership transitions, with David Kimball taking over as CEO in late 2016 after Aaron Vermut’s departure.
Prosper’s current product occupies the middle of the personal loan market. It is not as fee-friendly as SoFi or as broadly accessible as Upstart, but it offers a few things competitors do not: a co-borrower option (shared with LendingClub but rare among online lenders), a specialized healthcare lending division with lower starting APRs, and a unique origination fee refund policy that returns a portion of the fee if you pay off your loan early. The tradeoff is a higher APR floor than most competitors, an origination fee that can reach nearly 10%, and a regulatory history that includes a $3 million SEC settlement.
Prosper Pros and Cons
Pros
- ✓ Co-borrower option available. Like LendingClub, Prosper allows joint applications where both borrowers’ credit and income are considered. This can improve approval odds and potentially lower your rate. The co-borrower’s minimum credit score is 600, which is lower than the primary borrower’s 640 threshold. Most online lenders, including SoFi and Upstart, do not offer co-borrower or co-signer options at all.
- ✓ Specialized healthcare lending. Prosper acquired American Healthcare Lending in 2015 and offers dedicated healthcare financing with APRs starting at 6.99%, lower than the standard personal loan floor of 8.99%. Coverage includes elective surgery, dental work, fertility treatments, mental health services, and other medical expenses. If you are financing a specific medical procedure, this is a meaningful differentiator.
- ✓ Partial origination fee refund on early payoff. This is unique to Prosper among the lenders in this series. If you pay off your loan early and your origination fee exceeded 5% of the original principal, Prosper refunds the difference. On a $20,000 loan with a 9% origination fee ($1,800), an early payoff would return $800 (the amount above the 5%/$1,000 threshold). No other major online lender offers this.
- ✓ No prepayment penalty. Beyond the partial fee refund, you can make extra payments or pay off your loan at any time with no additional cost. Interest stops accruing the moment you pay off the balance.
- ✓ Low CFPB complaint volume. Prosper received just 39 personal loan complaints through the CFPB in 2024. For a platform with nearly two decades of operation and $29 billion in total originations, that is a low number. By comparison, LendingClub has roughly 489 complaints in the database, and SoFi has 129.
- ✓ 15-day grace period on late payments. Prosper charges the greater of $15 or 5% of the monthly payment, but only after a 15-day grace period. That 15-day window gives you more time to catch up than many competitors, which charge late fees the day after a missed due date.
Cons
- ✗ Highest APR floor in this review series. Prosper’s minimum APR of 8.99% is higher than SoFi (7.74%), LendingClub (6.53%), Upstart (6.6%), and LightStream (6.94%). Even with excellent credit, you will not access the sub-8% rates available elsewhere. The average borrower APR of 23.53% (for 3-year terms funded in the first half of 2025) suggests that most borrowers are paying rates well into the double digits.
- ✗ Origination fee up to 9.99%. While not quite as high as Upstart’s 12% ceiling, a nearly 10% origination fee is substantial. On a $20,000 loan, a 9.99% fee means you receive $18,002 and owe interest on the full $20,000. SoFi and LightStream charge no origination fee.
- ✗ No autopay discount. Unlike SoFi (0.25%), Upstart (0.50%), and many bank lenders, Prosper does not offer any rate reduction for enrolling in automatic payments. What you see at prequalification is what you get.
- ✗ $50,000 maximum loan amount. SoFi and LightStream both go to $100,000, Upstart to $75,000, and LendingClub to $60,000. If you need to borrow more than $50,000, Prosper cannot accommodate you.
- ✗ Five-year maximum term. The longest Prosper loan is 60 months. SoFi and LendingClub offer terms up to 84 months, and LightStream goes as long as 20 years for certain purposes. Shorter maximum terms mean higher monthly payments on larger loans.
- ✗ SEC fraud settlement in 2019. Prosper paid a $3 million penalty to the SEC for overstating annualized net returns to more than 30,000 investors between July 2015 and May 2017. The company had excluded non-performing charged-off loans from return calculations, which in some cases doubled reported returns versus actual performance. Prosper settled without admitting or denying the findings.
Prosper Rates and Fees
Prosper’s published APR range is 8.99% to 35.99% fixed. There is no autopay discount and no other rate reduction mechanism. The rate you receive depends on your credit score, income, debt-to-income ratio, loan amount, and term. The average borrower pays 23.53% APR on 3-year terms, according to Prosper’s own disclosure for loans funded between January and June 2025. That average is significantly higher than what prime borrowers would receive at SoFi or LightStream, reflecting Prosper’s broader credit spectrum.
The origination fee ranges from 1% to 9.99% of the loan amount and is deducted from your proceeds before disbursement. At the high end, a 9.99% fee on a $15,000 loan means you receive $13,502 in your bank account but owe interest on the full $15,000. Prosper’s unique partial refund policy provides some relief: if you prepay your loan and the origination fee exceeded 5% of the original principal, Prosper refunds the excess. That means on a 9.99% fee, you would get back roughly 5% if you paid off early.
The late fee is the greater of $15 or 5% of your monthly payment, assessed after a 15-day grace period. This is a standard fee structure in the industry, though the 15-day grace period provides more cushion than some competitors. There is no prepayment penalty.
Healthcare Lending Rates
Prosper’s healthcare financing division has historically offered a lower starting APR than the standard personal loan product, with rates starting as low as 6.99% and origination fees ranging from 1% to 7.99%. Loan amounts and terms are the same ($2,000 to $50,000, two to five years). If your loan purpose is specifically medical, dental, fertility, or mental health-related, it is worth checking the healthcare product separately, as the terms may be more favorable than a standard Prosper personal loan.
Total Cost Comparison
The table below shows the total cost of a $15,000 loan at 12% APR over 36 months, comparing Prosper’s fee structure against a zero-fee lender.
Prosper (5% Fee) | Zero-Fee Lender | |
Loan Amount | $15,000 | $15,000 |
Origination Fee | $750 (deducted) | $0 |
Cash Received | $14,250 | $15,000 |
Monthly Payment (36 mo.) | $498 | $498 |
Total Interest Paid | $2,930 | $2,930 |
Total Cost (Interest + Fee) | $3,680 | $2,930 |
Extra Cost from Fee | $750 | — |
Prosper Loan Terms and Options
Prosper offers personal loans from $2,000 to $50,000 with four fixed repayment terms: two, three, four, or five years. That is a narrower range than SoFi and LendingClub (both offering two to seven years) and LightStream (up to 20 years for certain loan purposes). The $2,000 minimum is higher than LendingClub and Upstart, both of which start at $1,000, but lower than SoFi’s $5,000 floor.
All Prosper loans carry a fixed interest rate. Accepted uses include debt consolidation (which accounts for roughly 70% of all Prosper originations), home improvement, medical expenses, household expenses, vehicle purchases, vacations, weddings, and other personal purposes. Prosper does not allow loan funds to be used for post-secondary education, gambling, or illegal purposes. The total outstanding balance across all Prosper loans cannot exceed $50,000 per borrower.
The co-borrower option is a meaningful feature. Joint applications combine both borrowers’ credit profiles and income, which can improve approval odds and potentially secure a lower rate. Co-borrowers must have a minimum FICO score of 600 (compared to 640 for individual applicants), at least one open trade on their credit report, and no bankruptcy within the past 12 months. Both parties share equal responsibility for repayment, and both have access to the loan account.
Eligibility and Application
Prosper requires a minimum FICO score of 640 for individual applicants and 600 for co-borrowers. You must be a U.S. citizen or permanent resident, at least 18 years old, with a U.S. bank account. There is no published minimum income, but Prosper verifies income through pay stubs, tax returns, or bank statements and evaluates your ability to repay. There is no published maximum debt-to-income ratio.
Prequalification uses a soft credit inquiry that does not affect your credit score. If you accept an offer and submit a full application, Prosper performs a hard credit pull. The platform evaluates standard credit factors: your score, credit history length, payment history, outstanding balances, and income.
Prosper loans are originated by WebBank, a Utah-chartered industrial bank regulated by the FDIC and the Utah Department of Financial Institutions. WebBank handles the credit underwriting and origination, while Prosper services the loan, processes payments, and manages the investor marketplace. From the borrower’s perspective, the experience is entirely through Prosper’s website and app.
Prosper Funding Speed
Prosper reports that funds can arrive as soon as one business day after loan approval and acceptance, though the typical timeline is one to three business days. The full process from application to funding can take up to 13 business days in some cases, depending on how quickly income verification is completed and how fast your bank processes incoming transfers.
The marketplace model introduces a timing variable that direct lenders do not have. After your loan is approved by WebBank, it is listed on Prosper’s marketplace for investors. Individual and institutional investors typically commit to full funding within one to three days. Once funded, WebBank transfers the proceeds on the same day, and your bank usually processes the deposit within one to three additional business days.
This is meaningfully slower than SoFi’s same-day funding (if approved by 7 PM ET) or Upstart’s next-business-day guarantee (99% of loans). If speed is your primary concern and you have the credit to qualify, SoFi or Upstart will get you your money faster.
Prosper Customer Experience
Prosper holds a Trustpilot rating of approximately 4.6 out of 5 based on more than 10,000 reviews. Positive reviews consistently cite a smooth application process, fast funding, and helpful customer service. Negative reviews tend to focus on technical issues with autopay enrollment and occasional payment processing delays. The Better Business Bureau assigns Prosper an A+ rating, and the company has been BBB-accredited since November 2012.
The Prosper mobile app earns a 4.6 out of 5 on Google Play. The app allows borrowers to manage their loans, make payments, and track balances. Prosper also operates a separate investment app for the marketplace side of the business. Customer support is available by phone and email, though the company does not offer live chat or 24/7 availability.
The CFPB received 39 personal loan complaints about Prosper in 2024. The most commonly cited issues include difficulties with the payoff process and unexpected fees or interest charges. Prosper responded to all complaints in a timely manner, with 37 closed with explanation and 2 closed with nonmonetary relief. For the scale of the platform, this is a low complaint volume. Prosper does not appear in the top tier of J.D. Power’s consumer lending rankings.
Prosper Financial Strength and Reputation
Prosper is a privately held company, which means it does not report quarterly financial results the way publicly traded competitors do. However, because its lending notes are registered as securities, Prosper files 10-K and 10-Q reports with the SEC. Full-year 2024 revenue was approximately $173 million. The company has originated more than $29.1 billion in loans since its inception through June 2025. In April 2025, Prosper announced a $500 million forward flow agreement with Fortress Investment Group and Edge Focus to expand loan sourcing capacity on its marketplace.
Prosper’s regulatory history warrants attention. Beyond the 2008-2009 SEC-mandated shutdown (which led to industry-wide peer-to-peer lending reforms), the company paid a $3 million penalty to the SEC in 2019 for overstating investor returns. Between July 2015 and May 2017, Prosper excluded non-performing charged-off loans from its annualized return calculations, causing reported returns for more than 30,000 investors to be materially higher than actual performance, in some cases by as much as double. The error was caught when a large institutional investor questioned the calculations. Prosper settled without admitting or denying the findings.
More recently, in March 2024, the Minnesota Department of Commerce issued a consent order with a $30,000 civil penalty for unlicensed debt collection activities. While the amounts involved are small relative to the business, these episodes reflect a pattern of compliance missteps that borrowers and investors should be aware of. On the positive side, the $500 million Fortress agreement in 2025 suggests institutional confidence in the platform’s future and provides significant new capital to support loan growth.
Who Is Prosper Best For?
Ideal Borrowers
- Debt consolidators. Nearly 70% of Prosper’s loan volume goes to debt consolidation. The platform is built for this use case, and the co-borrower option can help borderline applicants qualify to consolidate high-interest credit card debt into a single fixed-rate payment.
- Borrowers who need a co-borrower and cannot get one at LendingClub. Prosper and LendingClub are the two major online lenders offering co-borrower options. If LendingClub has turned you down and your co-borrower has at least a 600 FICO score, Prosper is worth trying.
- Healthcare financing needs. If you are financing a specific medical, dental, fertility, or mental health expense, Prosper’s healthcare lending division offers lower starting APRs (6.99%) than the standard product. This is a genuine differentiator that other general-purpose personal loan lenders do not match.
- Borrowers who plan to prepay. The partial origination fee refund policy is unique to Prosper. If you expect to pay off your loan early, the refund reduces the effective cost of the origination fee, partially offsetting the fee disadvantage compared to zero-fee lenders.
Not Ideal For
- Rate-sensitive borrowers with strong credit. With an 8.99% APR floor and no autopay discount, Prosper cannot compete with SoFi (7.74% floor with discounts), LendingClub (6.53%), or LightStream (6.94%) on rates. If your FICO is 700+, you will almost certainly find a better rate elsewhere.
- Borrowers who need more than $50,000. SoFi and LightStream both offer up to $100,000, Upstart goes to $75,000, and LendingClub reaches $60,000. Prosper’s ceiling is the lowest among major online lenders.
- Borrowers who need long repayment terms. With a five-year maximum, Prosper cannot offer the six- or seven-year terms available at SoFi and LendingClub. On a $40,000 loan at 15% APR, the five-year monthly payment is $952, compared to $723 over seven years at a lender offering longer terms.
- Borrowers who prioritize speed. Prosper’s marketplace funding model can take up to 13 business days in edge cases. If same-day or next-day funding matters, SoFi or Upstart are better choices.
- Borrowers are concerned about regulatory history. The SEC fraud settlement and Minnesota consent order may give pause to borrowers who weigh institutional credibility heavily. SoFi and LendingClub, both FDIC-insured banks with active regulatory oversight, offer a higher level of institutional assurance.
How to Apply
- Check your rate. Visit Prosper’s website and enter your loan amount, purpose, and personal information. Prosper runs a soft credit pull and returns prequalified offers within minutes. This does not affect your credit score.
- Review your offers. Compare the APR, monthly payment, term, and origination fee for each option. If applying with a co-borrower, both applicants’ information is required at this stage.
- Accept an offer and complete verification. Submit income documentation (pay stubs, tax returns, or bank statements) and verify your identity. Prosper performs a hard credit pull at this stage.
- Loan listed for investor funding. Once approved by WebBank, your loan is listed on Prosper’s marketplace. Individual and institutional investors typically commit to full funding within one to three days.
- Receive your funds. After the loan is fully funded and WebBank originates it, the proceeds are transferred to your bank account. Most borrowers receive funds within one to three business days of origination.
How Prosper Compares
Feature | Prosper | SoFi | LendingClub |
APR Range | 8.99-35.99% | 7.74-35.49% | 6.53-35.99% |
Loan Amounts | $2K-$50K | $5K-$100K | $1K-$60K |
Terms | 2-5 years | 2-7 years | 2-7 years |
Origination Fee | 1-9.99% | None | 0-8% |
Min. Credit Score | ~640 | ~680 | ~600 |
Co-Borrower Option | Yes | No | Yes |
Same-Day Funding | No | Yes | No |
Healthcare Lending | Yes (6.99%+) | No | No |
Fee Refund on Prepay | Partial | N/A (no fee) | No |
Trustpilot Rating | ~4.6/5 | 4.4/5 (9K+) | 4.6/5 (7K+) |
Prosper sits between SoFi and LendingClub on most dimensions, with two notable exceptions. Its healthcare lending division offers specialized medical financing that neither competitor matches, and its origination fee refund policy reduces the effective cost of prepayment in a way no other lender replicates. On the other side, Prosper trails both on rate competitiveness (higher APR floor), maximum loan amounts, and term length. LendingClub offers the same co-borrower feature with a lower credit threshold (600 vs. 640) and a higher loan ceiling ($60,000 vs. $50,000), making it the stronger choice for most fair-credit borrowers unless healthcare financing or the prepayment refund is specifically valuable.
Final Verdict
Prosper earns a 3.5 out of 5, a score that reflects a serviceable but unexceptional personal loan product with a few genuine differentiators weighed down by higher costs and a checkered regulatory record. The healthcare lending division, the co-borrower option, and the partial origination fee refund are features you will not find together at any other online lender. For a borrower specifically financing a medical procedure or planning to pay off a loan early, Prosper offers something uniquely valuable.
But for general-purpose personal lending, Prosper trails the field. The 8.99% APR floor is the highest in this series; the origination fee can run close to 10%, there is no autopay discount, and the five-year maximum term limits your options on larger loans. If you have good credit (680+), SoFi’s zero-fee model is simply a better deal. If you have fair credit and need a co-borrower, LendingClub matches that feature at a lower credit threshold and with a higher loan ceiling. Prosper is not a bad lender, but in a competitive market, it occupies a narrow lane where its specific strengths align with your specific needs.
Methodology
This review is part of a series evaluating 16 personal loan lenders across six weighted categories: Rates & Fees (25%), Loan Terms & Flexibility (20%), Eligibility & Accessibility (20%), Speed & Application Process (15%), Customer Experience (10%), and Transparency & Reputation (10%). Scores are based on data collected directly from lender websites, SEC filings, the CFPB Consumer Complaint Database, J.D. Power’s 2025 U.S. Consumer Lending Satisfaction Study, and app store ratings.
Frequently Asked Questions
Answers to your questions about Upstart Personal Loans.
Prosper requires a minimum FICO score of 640 for individual applicants. If you apply with a co-borrower, the co-borrower needs a minimum of 600, with at least one open trade on their credit report and no bankruptcy within the past 12 months.
No. Prosper uses a soft credit inquiry for prequalification, which does not impact your credit score. A hard pull occurs only after you accept an offer and submit a full application.
Yes. Prosper allows joint applications where both borrowers’ credit and income are considered. Both parties share equal responsibility for repayment. Your combined outstanding Prosper loan balance cannot exceed $50,000.
Funds can arrive as soon as one business day after approval, but the typical timeline is one to three business days. The marketplace funding model can extend the overall process to up to 13 business days in some cases.
No. There is no prepayment penalty. In fact, Prosper offers a partial refund of your origination fee if you prepay and the fee exceeded 5% of your original principal. This is a unique benefit among online lenders.
If you pay off your loan early and your origination fee was more than 5% of the original loan amount, Prosper refunds the portion above 5%. For example, on a $10,000 loan with a 9% origination fee ($900), you would receive a $400 refund (the amount above the 5%/$500 threshold) upon prepayment.
No. Prosper is a lending marketplace, not a bank. Your loan is originated by WebBank, a Utah-chartered industrial bank regulated by the FDIC. Prosper handles the application process, loan servicing, and investor marketplace, but WebBank is the legal lender of record.
In 2019, Prosper paid a $3 million penalty to the SEC for overstating annualized net returns to investors between July 2015 and May 2017. The company had excluded non-performing charged-off loans from return calculations. Prosper settled without admitting or denying the SEC’s findings. The issue affected investor return reporting, not borrower loan terms.
