LendingClub vs Prosper personal loans: Which is the best?
LendingClub or Prosper personal loans? Which one is best? They are both peer-to-peer loans with similar features. So, if you want to know which one is best for you, keep reading!
by Victória Lourenço
LendingClub or Prosper: loan comparison
The idea of consolidating your debt is appealing. But with so many personal loan options out there, it can be hard to know which one will work best for you. So, we did the research and found that LendingClub and Prosper offer loans at competitive rates that could help you pay off your debts faster than other methods like credit card consolidation. But which one is the best for you? LendingClub or Prosper personal loans?
LendingClub and Prosper have many similarities. They are both peer-to-peer lenders that offer similar terms and loan amounts. However, they have some differences, and we will describe them in this post to help you decide which one can help you pay off your debt and improve your financial life! So, read on!
|APR||From 7.04% to 35.89%.||From 7.95% to 35.99%.|
|LOAN PURPOSE||Pay off debt or for any other emergency.||Debt consolidation, credit card debt, home improvement, and large purchases, such as vehicles and medical expenses.|
|LOAN AMOUNTS||From $1,000 to $4,000.||From $2,000 to $40,000.|
|CREDIT NEEDED||Minimum of 600 points.||Fair credit score.|
|TERMS||Three to five years.||Three to five years.|
|ORIGINATION FEE||From 1% to 6%.||From 2.4% to 5%.|
|LATE FEE||$15 or 5% of the unpaid amount, whichever is higher.||5% or $15, whichever is greater.|
|EARLY PAYOFF PENALTY||No early payoff penalties.||There is no early payoff penalty.|
LendingClub is a company that offers personal loans for those with fair credit scores. This personal loan can be good for those looking to consolidate debt or make large purchases. Also, this loan option can be quite flexible regarding payments, and you can make loans from $1,000 to $40,000. Moreover, the company only does a soft credit check to see if you pre-qualify for the loan option you chose.
In addition, the company has a transparent way of showing its rates and fee on its official website. So, the origination fee charged to process your loan can range from 1% to 6% of the loan amount. And there is a late payment fee that is 5% of the late amount or $15, whichever is greater. Also, the fees that will apply to you will depend on your credit and other requirements.
Moreover, some personal loans charge an early payoff fee, but the LendingClub does not, so you can make an early payment you need with no charge. Also, if you need to make a loan with a partner or friend, there is the joint loan application option.
You cannot use this loan to repay another personal loan, and there are only two repayment term options. However, you can see if you pre-qualify on the company’s official website, and they only perform a soft credit check at this part of the application process.
Prosper personal loans
Prosper is a lending marketplace, which is a place where peer-to-peer lending occurs. This place allows borrowers to take loans from investors. So, with Prosper, you can apply for a loan, and the company will consider your credit history and debt-to-income ratio. After that, investors will be able to see a score created by Prosper, and they will decide whether to give money for your loan.
However, if your request is not funded by at least 70% in 14 days, your loan application will expire. But Prosper gives a three-day approximation for your loan to be completely funded. Also, you need to have at least a fair credit score to get a chance to qualify for a loan with Prosper.
Moreover, Prosper has some other valuable features, such as joint loan applications, loan payment date changes, payment reports to all three credit bureaus, and more. Also, you can apply for a personal loan to cover small or large expenses because the loan amount ranges from $2,000 to $40,000.
In addition, you can get your funds in as little as one business day, as stated on Prosper’s website. Also, you can make your application completely online on their official website. And you can check if you pre-qualify with only a soft credit check.
Benefits of LendingClub
- There are joint loan options available.
- You can choose another payment date for your loan.
- If you need a personal loan to consolidate debt or credit card debt, there is the option to make direct payments to creditors.
- You can see if you pre-qualify for a loan with only a soft credit check.
- You have a chance of qualifying for a loan even with a fair credit score.
Benefits of Prosper
- There are joint loan options.
- You can see if you pre-qualify with only a soft credit check.
- There is the option to change your loan payment date.
- Prosper offers a wide range of loan amounts: from $2,000 to $40,000.
Disadvantages of LendingClub personal loans
- There is a relatively high APR range.
- Many personal loan companies offer discounts when you set up automatic payments. However, LendingClub does not have any discount for automatic payments.
- There are origination fees and late payment fees.
- You cannot use this personal loan to pay for another personal loan.
Disadvantages of Prosper personal loans
- There is an origination fee for every loan.
- You can only choose between a three-year or five-year loan repayment term.
- Prosper does not offer the option to make direct payments to creditors.
- There are no discounts for setting up autopayments.
LendingClub or Prosper personal loan: which you should choose?
As we mentioned, both lenders have similar features. Both are very large online lenders that offer peer-to-peer loans. Also, both offer up to $40,000 loan amounts and loan terms of three or five years. Moreover, to qualify for either personal loan, you need to have at least a fair credit score. But as both lenders consider other requirements in the loan applications, you might have a chance if you have a lower credit score.
However, they differ in some aspects. For example, LendingClub has a minimum loan amount of $1,000 and Prosper of $2,000. Also, LendingClub has an origination fee that ranges from 1% to 6%, and Prosper charges a higher range of 2.4% to 5%.
LendingClub can be a good option for those who need to make a loan with a co-borrower and have a 40% or lower debt-to-income ratio. If you need a lender that can make direct payments to creditors, this can also be a great option. And Prosper can be a good option if you have a high and stable credit score but need a loan to pay off some high debt. However, Prosper does not offer the feature to make direct payments to creditors.
So, before applying for any of these personal loan options, remember to read all the terms and conditions and fees. Before making a loan, you need to plan out very well how you will pay for it afterward.
And if you think that none of these loan options will be a good fit for you, we can help you with another personal loan option. Plus, this personal loan has no requirements for a minimum credit score. So, check out our post below with a full review of the OneMain Financial personal loan!
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