SoFi and Prosper are two big lenders with good terms for clients. Since both organizations offer personal loans at competitive rates, it is not always easy to decide which one to choose right away.
SoFi, which launched in 2011, initially targeted college students. At the moment, the range of services of this company has expanded significantly. Prosper, on the other hand, has been operating since 2005 and started as a peer-to-peer lending site. Now, the company also offers a large number of different loan products.
SoFi requires that you have at least a good credit score to apply for a personal loan. Prosper has less strict requirements for a personal loan (your credit score must be 600+), but it pays more attention to the length of your credit history. SoFi offers financial advice and career coaching to its clients. Prosper, in turn, is a pioneer in peer-to-peer lending.
SoFi offers a few more in addition features, including a larger loan amount and more client options.
However, it is worth taking a closer look at the key differences between the companies. So, SoFi vs Prosper. Who is better?
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SoFi vs Prosper: a Comparative Chart
| SoFi | Prosper | |
|---|---|---|
| APR Range | 7.99 - 23.43% | 7.95 - 35.99% |
| Term | 24 - 84 months | 36 - 60 months |
| Loan amount | $5,000 - $100,000 | $2,000 - $40,000 |
| Min Score | Good (670-739) | Fair (580-669) |
| Pros |
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| Cons |
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How to choose between SoFi & Prosper
Both SoFi and Prosper are good private lenders. Below are the most important things you should consider when applying to any of them.
Terms
Prosper
Great option if you want to:
- Consolidate debt;
- Get flexible credit terms;
- Get the right amount without a perfect credit history.
- Requirements and approval odds. To get approved for Prosper loans you must have a minimum credit score of 600 and a credit history of at least two years. Debt must consist of no more than 50% of your income, excluding mortgages. For single applicants, the following conditions apply: an average credit score of 722, an average annual income of $106,000, and an average debt-to-income ratio of around 18%.
- Application approval time. The Prosper loan and financing approval process typically takes five to eight days.
- Expenses. APR Prosper ranges from 7.95 - 35.99%.
- Fees. Prepayment Fee – never charged.
- Origination Fee - Loan processing fee. Its value is from 2.41 - 5% depending on the Prosper rating. Your annual percentage rate (APR) already includes the opening fee.
- Check Payment Fee - A check processing fee added to the monthly payment amount. It is equal to 5% of the payment amount or $5 (if the payment exceeds $100, you should always add $5).
- Late Fee - If you do not pay the full amount of your monthly payment within fifteen (15) calendar days after the due date, you will be charged a late fee of $15 or 5% of the unpaid amount, whichever is greater. You will only be charged one late payment fee.
- Insufficient Funds Fee - If you are unable to make a payment, due to insufficient funds in your account or you do not have access to your account, you will be charged a fee of $15 for each returned or failed payment.
Pros:
- More loyal attitude to the client's credit history. To get a loan through a company, a minimum credit score of 600 is enough. This means that many people without a perfect credit history have a chance to get the money they need;
- You can take a smaller amount. When contacting SoFi, you will need to take at least five thousand dollars, in Prosper you can get a personal loan, in the amount of two thousand dollars.
Cons:
- Origination and other origination and other fees. The amount of commission charged by Prosper for issuance ranges from 2.41 - 5% of the loan amount;
- Not being able to add a guarantor;
- No discounts on automatic payments. You will be able to sign up for auto payments, however, you will not be given a discount on the interest rate.
Sofi
Great option if you want:
- Consolidate debt;
- Get a large amount;
- Get a loan with a floating interest rate.
Whether you need to consolidate debt or do a massive home renovation, SoFi has your needs covered. The lender can give out up to $100,000.
- Requirements and approval odds. The minimum credit score for SoFi clients is 680. Also, the lender's requirements include the need for job seekers to have sufficient income from other sources, or a job offer that they will start within three months.
- Application approval time. The entire process, from loan approval to financing, takes four to seven days — slightly less than Prosper.
- Expenses. SoFi APR ranges from 7.99 - 23.43%, below Prosper's maximum level of 35.99%.
Pros:
- You can take a loan for a long period. SoFi customers can repay the debt within seven years;
- Unemployment protection. SoFi offers an unemployment protection program. If you find yourself in a difficult financial situation, and you can prove it, you will be allowed to defer loan payments for three months at a time, up to 12 months;
- Cosigner accepted. SoFi is a rare company that provides personal loans with a cosigner. Usually, this role is played by a friend or relative with a good credit history and a stable income. This will increase your chances of getting a loan with a better interest rate;
- Discount for automatic payment. If you sign up for auto payment from your bank account, you will receive a 0.25% discount from SoFi.
Cons:
- Not available to all US residents. Unfortunately, SoFi loans are not available to Mississippi residents.
- You need good or excellent credit. With SoFi, you usually need a credit score of at least 700 to qualify for credit. Otherwise, you will need a cosigner.
- Higher loan minimum. If you only need a few thousand dollars, SoFi may not be right for you as the minimum you can borrow is $5,000.
When is SoFi Better? / When to choose Prosper?
If the sum you need is less than $5,000, it is better to choose Prosper. The minimum loan that can be taken from this lender is only $ 2,000, while at SoFi this amount is $ 5,000. On the other hand, if you urgently need a large amount of money, apply for a SoFi personal loan. SoFi provides loans of up to $100,000. This is twice the maximum loan amount from Prosper. If you want to consolidate a large debt or cover large expenses, SoFi will provide you with a large amount.
Check Prosper personal loan rates
If you are interested in a cheaper loan, SoFi is for you. The advantage of SoFi is the absence of commissions for issuing a loan and lower interest rates compared to Prosper.
Check SoFi personal loan rates
If your credit score is less than good, apply for Prosper personal loan. The credit requirements are lower there so it’s a higher chance to get approved.
If you need more flexibility regarding the loan term, choose SoFi. SoFi offers personal loans of 24 - 84 months compared to the Prosper. Prosper - for 36 - 60 months only.
Conclusion
Thus, it can be noted that both SoFi and Prosper have their own advantages and disadvantages. If you need the best conditions in terms of the cost of the loan (rates and fees) and the term, it is recommended to consider SoFi first of all.
If you don't qualify for SoFi and can't find a guarantor, or if you need less than $5,000, then Prosper is a good option to get the funds you need.
To make the right choice, compare the conditions and decide which ones will be convenient for you.