Prosper Personal Loan Review (2019)
Personal loans are a powerful financial tool but knowing when to use them and which company to do business with is critical to utilizing this type of loan correctly. Prosper offers personal loans which can be tailored to meet customers needs. Personal loans range from $2,000 up to $40,000. Repayment terms can be set for three or five year increments. Best of all, you can check your rate without impacting your credit score. We will review the features, benefits and when a personal loan might be the right choice for you.
Proper Personal Loans Key Features
When searching for a personal loan there are several key factors to consider. The most important question to ask is what you are using your loan for. Will you save money over the life of your personal loan? Is the need for funding pressing? These are questions that can only be answered on a case by case basis. Several key factors that will apply for all loan seekers include:
- The interest rate of your personal loan
- Terms of the loan – how many months/years for repayment?
- Fees associated with the loan (origination fees, early repayment, etc)
- How quickly are funds disbursed after approval
The above four key points are going to be the features you will want to focus on when selecting which bank you do business with. Ultimately, whichever bank provides you the lowest interest rate will be your best bet – all other factors being equal. With this said, one of the most concerning features about Prosper Personal Loans is that the origination fee varies between 2.41%-5%. At a 5% fee, a $10,000 loan would result in $500 in charges right off the bat. This is why it will be important to compare all factors when making your decision.
Save With Prosper Personal Loan Mail Offer
If you have received a direct mail offer with Prosper you are invited to view your rate with no impact to your credit score. If you are interested in accepting your loan, you can then complete the entirety of the application process. First, you will need to complete the following short form:
After entering your confirmation number you will be transferred to your offer. Here you will be able to view the interest rates and select the funding level you are interested in receiving. If you have arrived at this page but do not have a confirmation number you can still proceed with loan process.
When Is A Personal Loan Right For You?
For a full review of personal loans and when they may be a good option I recommend reviewing our overview article about personal loans. One of the most common reasons individuals seek personal loans is to pay off high interest credit card debt. This can be a great financial process to save money. The most important consideration in this case is determining the total cost of the loan and the total cost of not taking out the loan. Fees like the initial origination cost of the loan should also be considered.
Interest rates with Prosper can be significantly lower than a typical credit card. Credit car rates are typically around 20%. A Prosper Personal Loan may be lower than 7%. In this case, there is a great chance that you will save significantly over the life of your repayment period.
Another common reason for taking out a personal loan is unexpected financial burdens. These will need to be viewed on a case by case basis. Fortunately, funding with Prosper can be received in less than a couple of business days. In these instances, the speed of funding is often a major factor.
Prosper Loan Fees
As mentioned above, the most worrisome fee with Prosper Personal Loans is the origination fee. There are many personal loan options (such as The TD Express Loan or SoFi Personal Loans) which do not charge any origination fee. Potential Prosper customers need to include the cost of their origination fee when determining if their loan is a better option than a competitor.
Most personal loan issuers all charge some sort of late payment fee. Prosper is no different in this regard. Customers will incur a $15 or 5% of balance late payment fee when they miss a payment. This is a fairly steep charge and customers should make every attempt to avoid missing a payment.
Final Thoughts – Prosper Personal Loans
Overall, due to the origination fees, there will likely be better options available for many consumers. However, as you can check your interest rate at no cost, savvy consumers should absolutely see what their interest rate will be with Prosper. If Prosper is offering you a much lower rate, then the origination fee may be worth paying. Have you taken out a personal loan lately? Which provider did you use and why? Let us know in the comments below.