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Monday, May 20, 2024

Prosper Marketplace Lending: Fair Interest Rates for Borrowers & Competitive Returns for Investors

Prosper Marketplace Lending
Ashley Fricker

Written by: Ashley Fricker

Ashley Fricker
Ashley Fricker

Ashley Fricker has more than a decade of experience as a finance contributor and editor, and has specialized in the credit card industry since 2015. Her credit card commentary is featured on national media outlets that include CNBC, MarketWatch, Investopedia, and Reader's Digest, among many others. She has worked closely with the world’s largest banks and financial institutions, up-and-coming fintech companies, and press and news outlets to curate comprehensive content and media. Ashley holds a bachelor's degree in multimedia journalism from Florida Atlantic University.

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Edited by: Lillian Guevara-Castro

Lillian Guevara-Castro
Lillian Guevara-Castro

Lillian Guevara-Castro brings more than 30 years of editing and journalism experience to the CardRates team. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct journalism instructor at the University of Florida. Today, Lillian edits all CardRates content for clarity, accuracy, and reader engagement.

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Advertiser Disclosure

In a Nutshell: The Prosper Marketplace connects people who want to borrow money with those that have money to invest. These loans have fair interest rates, better terms, and superior convenience over a traditional bank loan. Prosper is the original marketplace lender with over $6B in funded loans to date, and anyone who meets the qualifying criteria can invest in a Prosper loan with as little as $25. Having grown by nearly 1,500 percent in recent years, Prosper is recognized as one of Silicon Valley’s fastest-growing FinTech companies.//

With a decent credit score, accessing a loan at a fair rate shouldn’t be an issue, and yet for many it still can be. Brick-and-mortar banks aren’t handing out loans with interest rates that compete well with those of Silicon Valley “FinTech” juggernauts who are disrupting traditional financial institutions and the way consumers handle their money.

For about a decade now, marketplace (or peer-to-peer) lending has been steamrolling its way through old-fashioned bank lending and offering consumers a new and improved way to borrow, with superior customer service and convenience, and most importantly — better interest rates. Many people utilize marketplace loans to refinance high-interest unsecured debts such as credit cards.

Prosper is the Original Marketplace Lender & The Only One to Develop Financial Management Products for Its Users

Founded in 2006, Prosper is the original marketplace lender (MPL). Since its launch, rival marketplace lenders – or what American Banker refers to as the “me too” MPLs — have steadily appeared, having realized the entrepreneurial and consumer-facing value of the concept.

Prosper Logo

To separate itself from the increasing competition, Prosper remains focused on its mission to advance its borrowers’ and investors’ financial well-beings. Just last year, Prosper acquired BillGuard — an award-winning personal finance app — to provide its users with a suite of powerful tools that help advocate smarter financial decisions.

Today, Prosper is the only peer-to-peer lending company developing financial management products that educate consumers and allow them to manage and protect their finances.

How to Get a Loan of up to $35,000 in 3-5 Business Days

To qualify for a Prosper loan, applicants are required to have a minimum credit score of 640 and three open tradelines (credit accounts). Loans are available between $2,000 and $35,000 and can be requested for a variety of reasons, with APRs ranging from 5.99 percent to 36 percent:

  • Debt Consolidation Loans
  • Home Improvement Loans
  • Personal Loans for Small Businesses
  • Auto & Vehicle Loans
  • Short-Term & Bridge Loans
  • Green Loans (Financing for environmentally friendly projects)
  • See all Prosper Loan Types

“Prosper offers fixed-term, fixed-rate loans with competitively priced interest rates to people with good credit. The loan terms are transparent and easy to understand and there are no pre-payment penalties,” said Prosper’s CEO, Aaron Vermut.

Aaron Vermut, Prosper CEO's photo

Aaron Vermut, Prosper Marketplace CEO

“Many people borrow through Prosper to refinance high-interest debt, helping them get on top of their finances. People also borrow through Prosper to pay for large purchases. The fixed-term, fixed rate loan is a smart alternative to paying for large purchases that won’t be paid off in full within one month,” he added.

To get started, fill out the preliminary form and agree to the terms and conditions. Prosper will perform a soft credit check to determine your eligibility and provide rate estimates and potential loan offers. If qualified, you’ll select an offer and proceed to the full application, and your loan request will then be listed on Prosper’s Marketplace.

The Prosper Marketplace is where investors will review your request and decide whether or not to fund a portion of your loan.

As long as your personally identifying information checks out, Prosper will formally approve your loan request, and assuming your listing has received sufficient investor commitments to fund, your loan will be deposited in three to five business days.

“Prosper offers fixed-term, fixed-rate loans with competitively priced interest rates to people with good credit. The loan terms are transparent and easy to understand and there are no pre-payment penalties.” — Aaron Vermut, Prosper CEO

Once the loan originates (i.e. is funded), a hard credit check is posted. All loans are funded by WebBank, a Utah-chartered industrial bank, member FDIC.

How to Fund a Loan & See Returns Starting at 5.32%

To invest in a Prosper loan, you must be 18 years of age or older, have a valid Social Security number and checking or savings account, and reside in one of the following eligible states:

  • Alaska
  • California
  • Colorado
  • Connecticut
  • Delaware
  • District of Columbia
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Louisiana
  • Maine
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nevada
  • New Hampshire
  • New York
  • Oregon
  • Rhode Island
  • South Carolina
  • South Dakota
  • Utah
  • Virginia
  • Washington
  • Wisconsin
  • Wyoming

Some states — Alaska, California, Idaho, Missouri, Nevada, New Hampshire, Oregon, Virginia, and Washington — have financial eligibility requirements.

Every loan application is assigned a Prosper Rating – a proprietary system that allows Prosper to maintain consistency in its evaluation. Prosper Ratings allow potential investors to easily consider a loan application’s level of risk because the rating represents an estimated average annualized loss-rate range to the investor.

“For Notes purchased since July 2009, every Prosper investor with 100 or more Notes has experienced positive returns. 100 Notes can be obtained with an investment of just $2,500,” according to

Screenshot of

Choose which loans you wish to fund and see your returns deposited into your Prosper Investment Account.

Creating your Prosper Investment Account takes just two minutes, and you can invest as little as $25 in each loan listing you select. Prosper then deposits your returns directly into your account.

Over $6B in Funded Loans & 1,434% Growth in Recent Years

Prosper has grown by 1,434 percent in recent years, and recognized as the 24th-fastest growing company on Deloitte’s Fast 500, the 3rd-fastest growing company in San Francisco, and named one of Forbes’ FinTech 50.

The tremendous growth in this industry is indisputably impressive — Morgan Stanley estimated that MPLs will encompass 8 percent of consumer unsecured lending and 16 percent of small business lending by 2020.

Whether you’re looking for a loan with a lower interest rate than what you’re currently paying, or an investor looking to diversify your portfolio with the added benefit of lending a financial hand to your peers, Prosper is a good place to achieve either of those goals. Visit for more information.

Advertiser Disclosure is a free online resource that offers valuable content and comparison services to users. To keep this resource 100% free, we receive compensation for referrals for many of the offers listed on the site. Along with key review factors, this compensation may impact how and where products appear across (including, for example, the order in which they appear). does not include the entire universe of available offers. Editorial opinions expressed on the site are strictly our own and are not provided, endorsed, or approved by advertisers.