LendingClub vs. Prosper

How do loan amounts compare with LendingClub vs Prosper?

Loan amounts with LendingClub and Prosper are similar. Prosper loan amounts can range from just $2,000 all the way up to $40,000. LendingClub also offers personal loans in amounts up to $40,000. If you need access to even more cash than this, you will want to look at other online lenders such as LightStream and SoFi that can offer loan amounts of up to $100,000. Keep in mind that interest rates and terms can vary depending on the loan amount. You will want to compare a variety of factors including loan amounts before selecting the appropriate lender.

How do interest rates compare with LendingClub vs Prosper?

Even a small difference in interest rate can greatly impact how much you will pay in interest over the lifetime of the loan and the amount of your loan payment each month. For this reason, it pays to shop around for the best deal as well as ensure that your credit score is as high as possible before applying for a new personal loan.

Interest rates on personal loans from LendingClub range from 7.04% to 35.89%. Prosper's interest rates are extremely comparable with a slightly higher range of 7.95% to 35.99%.

There are some scenarios where you may need to accept a personal loan offer with a higher interest rate. For example, let's say you need to borrow $10,000. You may qualify for $10,000 with one lender at 10.99%. You may qualify for $8,000 with another lender at 9.99%. In this scenario, you would need to decide if you want a lower interest rate or you want to borrow $10,000 at a higher rate. It all depends on what will best fit your financial needs.

How do credit score requirements compare with LendingClub vs Prosper?

Credit score requirements can make or break your chances of getting approved on your loan application. The good news is that even disqualified applicants can apply with a co-borrower.

Prosper application qualifications include a minimum credit score of 600. At the same time, LendingClub loan applications also require a credit score of at least 600. However, applicants with both companies can benefit from the best rates if they have a credit score of at least 660.

Both lenders can look at several factors including credit score when evaluating applications. Income and debt-to-income ratio may also play a pivotal role in qualifying.

How do loan terms compare with LendingClub vs Prosper?

The loan term that you select for your personal loan matters because it has a large impact on both your monthly payment and the amount that you will pay in interest over the lifetime of your loan. The shorter the loan term, the larger the monthly payment may be, but the faster you can get out of debt and the less you pay in interest. The longer the loan term, the smaller the monthly payment, but the longer it may take to pay off and the more you pay in interest.

Applicants with Prosper have just 2 options for their loan repayment periods and can choose from a loan term of either 3 or 5 years. Likewise, LendingClub loan terms also include the option to finance your loan for either 3 or 5 years.

How do origination fees compare with LendingClub vs Prosper?

Origination fees are a common occurrence with online lenders. An origination fee is essentially a processing fee or administration fee that is designed to cover the cost of setting up the loan.

Charging these fees allows lenders to stay competitive with their interest rates and even extend financing to certain borrowers who would otherwise be considered a credit risk. Not all lenders charge origination fees, and those that do often base their fees on the applicant's income and credit score. It is important to take note of the origination fees associated with each potential lender you are looking at, in order to avoid paying unnecessary fees that can easily reach into the hundreds or even thousands depending on your loan amount and the fee percentage.

Potential origination fees with Prosper range from 2.41% to 5%. On the other hand, LendingClub charges anywhere between 3% to 5% of the loan amount.

The exact amount these lenders will charge you for an origination fee can vary depending on your credit score and other information included in your loan application. Origination fees are typically included in your APR and are deducted from your loan at the time of approval.

How do other minimum qualifications compare with LendingClub vs Prosper?

Each personal loan lender has their own minimum requirements for both credit score and annual income. Both Prosper and LendingClub are fairly generous with their minimum qualifications to obtain a personal loan.

With Prosper, these qualifications include a minimum credit score of 600 and no disclosed annual income requirement. Similarly, in order to get a loan with LendingClub, applicants will need a credit score of at least 600 and no disclosed annual income requirement. Both lenders also look for a reasonably low debt-to-income ratio as further proof of your ability to repay.

How do you determine which lender is best for you?

There are a few different factors in determining which lender has the best loan offering for you. Many times, looking at a comparison chart or getting prequalified can help you see what kind of loan terms and interest rate you can expect to receive from each financial institution.

In general, credit unions and online lenders have more competitive interest rates and better loan offerings for applicants than that of a traditional bank. In addition, online lenders and credit unions make personal loans more accessible to the majority of consumers by approving applicants who may not otherwise qualify for loans without a cosigner if they apply through a traditional bank. This is because credit unions are member-owned not-for-profits with local personalized service, and online lenders have fewer operating costs than large banks do as well as the tendency to recoup some of their lost funds through fees like origination fees.

When comparing which personal loan product is right for you, you will need to consider a few different factors. You'll want to take a look at the potential interest rate, available loan terms, loan amounts, loan requirements, and potential for any origination fees and other charges.

For example, if you are looking for a loan that allows you to borrow up to $100,000, you will need to look for lenders with loan amounts this high. And if you need to use a cosigner to apply for your loan, you will need to look for a financial institution that allows the use of cosigners. Lastly, if you know that your credit score is lower than average, you'll have to consider the credit score thresholds of each lender that you are thinking of applying for a loan with.

Knowing these requirements ahead of time before you apply can save you both time and an unnecessary hard inquiry on your credit report. This is also why prequalification is a great first step to take in comparing different lenders and looking for a loan with the best deal on rates.

Shopping for a lender that can meet your needs and offer you a competitive loan is time consuming. But it doesn't have to be. At Acorn Finance you can check personal loan offers up to $100,000 from top national lenders. Within 60 seconds or less you can receive offers with no impact on your credit score. Acorn Finance lending partners can offer APRs as low as 6.99% and terms up to 12 years, depending on credit score and other requirements.

What are the pros of Prosper personal loans?

One of the main perks of seeking out a loan with Prosper is that their personal loan application process is easy to go through and funds are easy to qualify for. Some of the pros of Prosper personal loans include:

Low credit score requirement of 600

No minimum income requirement

Competitive interest rates

Variety of loan amounts

Offer micro-loans of $2,000

What are the cons of Prosper personal loans?

Although Prosper has some very attractive loan offerings, there are a few downsides to keep in mind when considering a personal loan from Prosper. Some of the cons of a Prosper personal loan include:

Origination fees starting at 2.41%

Maximum loan amount of $40,000

Limited repayment options (3 and 5 year terms available)

No available in the state of Iowa

Funding times may be longer than some of their competitors (funds may take up 5 days to deposit to your account, although funding times can vary)

What can you use a Prosper personal loan for?

Like most other types of personal loans, a Prosper personal loan can be used for anything you need cash for. Common uses for personal loans include weddings, vacations, business costs, home renovation projects, car repairs, RVs, medical bills, tuition, and other major life expenses.

Just keep in mind that loan amounts at Prosper range from $2,000 to $40,000 and must be repaid in loan terms of either 3 years or 5 years. As long as your personal financial needs will be accommodated by those loan options, Prosper is a great choice for your personal loan lender.

When is it better to choose Prosper for a personal loan?

There are a few occasions where it makes better financial sense to choose Prosper over LendingClub to finance your personal loan needs.

For example, if you have poor credit or any other negative circumstance, Prosper's unique peer-to-peer lending process allows applicants who may not otherwise qualify for financing a better shot at getting approved. In addition, the upper end of Prosper's origination fee range is lower than with LendingClub, so if you have poor credit you may get more of a break on your fee by going with Prosper.

Ultimately, you will want to compare offers between these two lenders, or maybe more, to determine which lender can offer you the best personal loan.

What are the pros of LendingClub personal loans?

LendingClub is a legitimate lender that can offer competitive personal loans. Let's take a look at some of the pros of obtaining a personal loan through LendingClub.

No prepayment fees, application, or brokerage fees

Competitive interest rates

Requirements to qualify are relatively lax

Can fund loans faster than Prosper (most loans are funded within 1 to 2 business days, although funding times may vary.

What are the cons of LendingClub personal loans?

There are a few downsides to taking out a personal loan with LendingClub. Since loan offers can vary, the pros and cons of a loan with a particular lender can vary depending on what you qualify for. In general, here are some cons of LendingClub personal loans.

Limited repayment terms (only 3 and 5 years available)

Origination and late fees may apply

Maximum loan amount of $40,000

Interest rates may be higher than other lenders for borrowers with bad credit

What can you use a LendingClub personal loan for?

You can use a LendingClub personal loan for anything that a typical personal loan would be used for including funding major life events such as a wedding, making large purchases such as kitchen appliances, paying for a child's private school tuition, starting a business, or even taking a vacation. Personal loans are also an ideal way to cover unexpected expenses and emergencies such as car repairs and medical bills.

The only restrictions that LendingClub's borrower agreement places on the use of their funds include:

Higher education

Illegal activities

Investing

Buying cryptocurrencies.

When is it better to choose LendingClub for a personal loan?

There are a few circumstances when borrowers might have better luck going with LendingClub than choosing Prosper as their online lender. If you need funds quickly, you may be better off going with LendingClub. LendingClub can fund loans as soon as 1 to 2 business days, although funding times may vary. Prosper may take up to 5 business days to fund loans, although funding times may vary.

As we mentioned earlier, there are several factors that should be considered when choosing the personal loan that is best for you. In some cases, it may be neither of these lenders. Always compare offers and pros and cons before choosing a personal loan.

Can you have a cosigner on Prosper or LendingClub personal loans?

LendingClub does not have the option to apply for a loan using a cosigner. What they do offer, however, is the ability to apply for a joint personal loan with a co borrower. With a cosigner, only the borrower has access to the funds while the cosigner remains legally on the hook. But with a co borrower, each individual has equal rights to the loan funds as well as an equal responsibility to repay the loan. Just like with a cosigner, the co borrower can help the initial borrower qualify for terms and financing they may not otherwise be able to get approved for.

Similarly, Prosper does not allow co-signers on their personal loan offerings, but they are set up to accommodate joint applicants or co borrowers. During this joint personal loan application process, the income and credit scores of both applicants will be considered, both parties will have access to the loan funds, and both will be equally held responsible for loan repayment.

Can you prequalify for Prosper and LendingClub personal loans?

Both Prosper and LendingClub offer a way for borrowers to check their potential interest rates without the need to undergo a hard inquiry that could affect your credit score. Once you share your basic information and fill out a simple online form, both lenders can extend a personalized loan offer to you. While you may need to submit more information to finalize an approval, a prequalification lets you know what you should qualify for. If you decide to follow through with the loan application, you will then complete the full application and underwriting process.