Prosper and LendingClub mainly offer their lending services to borrowers whose credit score is fair or good. These peer-to-peer lenders are similar in many ways, but still have a number of differences that you need to be aware of when choosing a perfect personal loan.
Check your personal loan rates
Check your personal loan rates
Prosper vs LendingClub: a Comparative Chart
| Prosper | LendingClub | |
|---|---|---|
| APR Range | 7.95 - 35.99% | 8.3 - 36% |
| Term | 36 - 60 months | 36 - 60 months |
| Loan amount | $2,000 - $40,000 | $1,000 - $40,000 |
| Min Score | Fair (580-669) | Poor (300-579) |
| Pros |
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| Cons |
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How to choose between Lending Club & Prosper
We will delve into the features of LendingClub and Prosper to select the right lender for you.
Terms
Both lenders offer similar loan terms, averaging 3 to 5 years, but Prosper provides a personal loan for 2 years as well. The longer the term of the loan, the lower the amount you have to pay each month. However, this increases the overall overpayment on the loan.
Loan Amounts
The maximum possible loan amount at Prosper is $50,000 which is $10,000 higher than at LendingClub. However, the minimum loan amount at LendingClub has no limits versus $2,000 at Prosper.
Credit Score and Annual Income
Applicants are allowed to have a fair FICO score of 640 for Prosper and 600 for LendingClub personal loan. You can also find other types of LendingClub personal loans on our website.
Some sources declare that none of the lenders requires a minimum income. However, their questionnaires include a question about your total annual income. It means you can try to apply without proof of minimum annual income, but having these documents will increase your approval odds.
LendingClub accepts applicants with a debt-to-income ratio of 40% or lower, but Prosper allows borrowers to carry a substantial debt with DTI ratio up to 50%, mortgages are not included.
Debt Consolidation
Both Prosper and LendingClub suggest an opportunity of a debt consolidation, which means combining all your existing debts into one loan which is easy to manage. A loan with a fixed rate that is tailored to your existing budget and needs may be the key to better management of your repayments.
Rates and Fees
Lenders’ APRs are pretty much the same, but sometimes even a small difference matters. LendingClub’s rate varies between 8.3 - 36%, and Prosper’s APR starts with 7.95 - 35.99%.
When comparing loan offers, do not neglect additional fees that can significantly increase the overall cost of a loan. Origination fee is usually charged for maintaining your credit account. This lump sum will be deducted from the loan amount at once before you receive the money. LendingClub’s origination fee is between 3 - 6%. Prosper charges 2.41 - 5% of a loan sum.
Lenders prefer to deal with reliable borrowers, so their rates may differ significantly depending on the applicant. The higher your FICO score and the better your credit history, the lower rates you can expect.
Payment flexibility
Both lenders allow extra payments or early pay back without any additional fees. In case of a late payment you will be charged 5% of the due amount or $15, whichever is greater.
Moreover, LendingClub has an option of temporarily changing the payment due date by phone or via email.
Availability
LendingClub provides personal loans to US residents throughout the country, except Iowa. The minimal requirements to prospective borrowers are the following:
- 18 years old and elder;
- US citizenship;
- at least one verified account in any of American banks.
Prosper’s loans are available throughout the US. Major requirements to applicants include:
- 18+ years old;
- US citizenship;
- debt-to-income ratio up to 50% (excluding mortgages).
Application Procedure
The whole procedure is online and similar for both lenders:
- You visit official websites: www.lendingclub.com or www.prosper.com
- You fill out a short questionnaire, indicating the required amount, loan term and purpose, how you are going to use the borrowed money (debt consolidation, big purchase, home improvement, medical care or other).
- After you enter your name, date of birth, address, email, phone number and annual income, the system asks you to create a password.
- The last step is your ID verification. You need to enter your Social Security Number.
- Now you can check your rate without affecting your credit score.
- Once your rate is checked, you will get a customized offer with APR and terms.
- If you agree with these terms, you may proceed with this particular offer, fill in a formal application form and wait for the lender's final decision.
- After the application is approved, you will receive funds on your bank account or lender will pay your creditors directly.
Once you have chosen a loan and agreed with its terms, Lending Club sends your application to private investors. They will need to fund a minimum 60% of the loan amount during 30 days. Only after that you get funds. 30 days is the maximum period, but in practice, approval takes several days on average.
Prosper offers the exact lender after your rate is checked. You still need to wait while the chosen lender accepts your application, but the good thing is that Prosper transfers the money within 1 business day after loan approval.
Adding a Co-Signer or Co-Borrower
If you do not meet the basic loan requirements on your own, you may want to consider a cosigner who has a good credit history and a solid income. Unfortunately, neither LendingClub nor Prosper offer this option. However, both lenders allow you to apply with a co-borrower.
The difference is that the co-signer only helps you qualify for the loan, while the co-borrower shares equal responsibility for repaying the loan. When several co-borrower are applying, the lender checks the creditworthiness and income of both applicants. If at least one borrower does not meet the requirements, your application may be rejected.
Even if you qualify on your own, adding a co-borrower with a good or excellent FICO score and high annual income can significantly boost your chances of getting a better interest rate or more money.
LendingClub vs Prosper. Which One to Choose?
Prosper and LendingClub are popular online lending marketplaces with good trustworthy reputation. They both provide similar credit products with minor differences in APR and other basic terms.
LendingClub usually settles slightly lower rates than Prosper, but even 0.1% matters when considering a 2 - 5 years period. Nevertheless, check for the special offers that may help you to save money.
Check LendingClub personal loan rates
For example, right now Prosper’s loans start with 6,99% APR which is lower than usual rate for this lender.
Select LendingClub if you need less than $2,000, but definitely choose Prosper if the required amount is more than $40,000, but does not exceed $50,000.
Prosper would be a better option for applicants with substantial debt. Even if your monthly debt is half of your income, you still qualify for a loan. Prosper accepts a DTI ratio up to 50% compared to LendingClub with 40% for individual and 35% for joint borrowers.
Check Prosper personal loan rates
Personal loan is a great opportunity to cover unexpected expenses, but it is always an additional commitment. Before agreeing to the terms of the lender, carefully study all the available offers on the market. Read the loan agreement and clarify the information about hidden fees and commissions in advance, otherwise, it can greatly increase the overall overpayment on the loan.