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Prosper Loans Review

Prosper Loans ReviewProsper is a peer to peer lending network that allows people to invest in each other. Borrowers seek out Prosper Loans because they can get a personal loan without the hassle of a bank.

Loans range between $2,000 and $35,000. Each loan is fulfilled by individual investors that only need to contribute a minimum of $25.

Each note is listed online and includes detailed (yet anonymous) information about the borrower. This includes the borrower’s credit history and credit score. In addition, investors have access to a borrowers loan description and other relevant details.

Borrowers can even post endorsements from friends or family for investors to see!

These unsecured personal loans are funded by individual investors, but the servicing of the loan is handled by the peer to peer lending website.

Basics of Peer to Peer Lending

Peer to Peer Lending sites have specific approval criteria for all borrowers. The detailed loan application process guarantees a certain level of transparency for investors. More accurate information helps lenders assess their risk factors and calculate the potential of default.

Unlike traditional bank financing, like Chase Personal Loans, Prosper loans are guaranteed by individual investors – not banks. This gives you a greater advantage of getting the money you need without the high interest rates.

Borrower Requirements:

All borrowers of must be U.S. residents in a state where Prosper Loans are available. There are currently only three states where Prosper Loans are not open to applicants. In addition to location requirements, all borrowers must have:

  • Bank account
  • Social Security number
  • Credit score of at least 640

Prosper Loan Amounts:

  • Minimum of $2,000
  • Maximum of $35,000

Prosper loans are only available in the following states:

  • Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

Prosper Loans are NOT Available to Borrowers in the Following States:

  • Iowa
  • Maine
  • North Dakota

Unsecured Personal Loans Interest Rates:

Currently personal loan interest rates range from 6.93% to 35.64% APR. A borrower’s interest rate will vary based on a number of factors such as:

  • Prosper Rating
  • Expected loss rate
  • Loan term
  • Economic environment
  • Competitive environment

Terms of Prosper loans:

  • 1 year fixed loan
  • 3 year fixed loan
  • 5 year fixed loan

Penalties and Fees:

Before taking out an unsecured personal loan it is imperative to consider any additional fees or penalties associated with the loan. Currently there are no penalties for paying off Prosper loans early or for making partial prepayments.

There are also no fees for posting a loan listing on Prosper.

In the event that loan is funded and the money is successfully transferred, the borrower may encounter fees. These include closing costs, late payment or failed payment fees. Closing fees are taken out of the total loan amount and will vary based on the borrowers Prosper rating. Here is a list of potential penalties and fees:

  • Closing fee of 0.50% for AA rated Prosper Borrowers
  • Closing fee of 3.0% for A or B rated Prosper Borrowers
  • Closing fee of 4.5% for C – HR rated Prosper Borrowers

These fees are subject to change without notice.

The closing fee will be taken from the loan amount before the money is transferred to the borrowers bank account. All borrowers should add the appropriate closing percentage to the requested loan amount before applying. This will guarantee that the borrower will receive the correct amount requested.

Prosper Marketplace provides a great opportunity for anyone with good credit to secure a personal loan. Many people seek out financing for wedding loans, home improvement loans, motorcycle loans, or to payoff credit card debt.

However, unsecured loans are not available for post secondary educational expenses.

All Prosper Loans are unsecured lines of credit. If a loan defaults it will be reported to all major credit reporting agencies.

Before taking out one or more loans from a Peer to Peer lending site, please consider all the risks and costs involved.