Prosper

Founded in 2005, Prosper established itself as America's first peer-to-peer lending marketplace, pioneering a model that connects borrowers directly with individual and institutional investors willing to fund their loans. This innovative approach disrupted the traditional lending landscape by removing banks as intermediaries, potentially offering more favorable terms for both borrowers and investors. Over the years, Prosper has facilitated more than $22 billion in loans to over 1.3 million people, solidifying its position as a significant player in the alternative lending space.

Prosper's personal loans range from $2,000 to $40,000 with fixed terms of either 36 or 60 months. Their interest rates vary based on the borrower's credit profile, loan amount, and term length, with origination fees ranging from 2.4% to 5% of the loan amount. What distinguishes Prosper's model is that loan applications are evaluated not just by traditional credit metrics but are also presented to potential investors on their marketplace platform. This approach can sometimes provide opportunities for borrowers who might not fit the rigid criteria of conventional lenders but have strong financial profiles in other ways.

The application process with Prosper is straightforward and entirely online, typically taking just a few minutes to complete. Borrowers receive their personalized rate offers without impacting their credit score through a soft credit inquiry. Once a loan is approved and funded by investors on the platform, funds are typically deposited into the borrower's account within 1-3 business days. Unlike revolving credit lines, Prosper loans have fixed rates and monthly payments, providing borrowers with predictable repayment schedules. While their rates may not be the lowest available for borrowers with excellent credit, Prosper's marketplace model offers an alternative funding source that has helped thousands access personal loans for debt consolidation, home improvements, major purchases, and other significant expenses.