The founder of this blog been a Prosper investor since 2010 and has over $300,000 invested in multiple p2p lending accounts. You can view Peter's p2p lending accounts and returns here. Review last updated in June 2015.] Prosper was the first p2p lending platform in the U.S. when it launched back in 2006.
Full Review
Prosper is a peer-to-peer lender that provides personal loans to borrowers with fair or good credit. The company says it has originated more than $17 billion in loans to over 1 million people since it was founded in 2005.
Peer-to-Peer investing is an excellent alternative investment. It can be compared to some other traditional investments to see whether it makes sense to invest in peer to peer platforms. Peer-to-Peer platforms solve two problems: Private lenders/investors need returns because savings rates are low.
Peer to peer lending is one of the most simple and effective ways I've ever found to make passive income. It has outperformed my stock picks, selling old baseball cards, my own business ideas – everything. I've earned more money through it than I've earned at anything else except my day job.
From my research, it appears the rate of loss is slightly higher than Lending Club. This doesn't mean Prosper is a bad investment. It means you must be more selective in the loans you choose.
Perhaps the most significant difference between Prosper and Lending Club is borrower qualifications. Lending Club requires a higher credit score, lower debt-to-income ratio, and longer credit history. In contrast, Prosper has developed a proprietary scoring formula called the Prosper Score.
Prosper must complete the loan review process before Prosper can transfer loan proceeds to your account. The loan review process itself will last no longer than seven business days. Loan proceeds should be available to you one to three business days after your listing is approved for funding.
You can get your interest rate instantly. Unlike some loans, checking your rate at Prosper won't affect your credit score. They just use a soft credit inquiry, which is visible to you but not other lenders.
Accessible to many borrowers: Prosper's minimum required credit score is 640, so loans are available to borrowers with good to excellent credit. No prepayment penalties: While you can choose a term of either three or five years for repayment, Prosper does not charge any fees for paying your loan off early.
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