- Who can borrow money on Prosper?
A Prosper borrower is any person who is a U.S. resident with a credit score of 520 or higher, a bank account, and a Social Security number or Individual Taxpayer ID. Borrowers must first be approved by Prosper's anti-fraud and identity verification systems before they can post a loan listing. Approved borrowers can request unsecured loans from $1,000 to $25,000 (may vary by state) at rates they select. It is recommended that borrowers join a group before creating a listing to attract more favorable interest rates.
- What kinds of loans are available on Prosper?
Borrowers can request 3-year, fully amortized, unsecured loans up to $25,000 (may vary by state). In other words, you will have three years to pay off the loan in full with set monthly payments. You don't have to offer any collateral, like a car or your house, to guarantee the loan. There are no penalties for paying off your loan early or for making partial prepayments.
- How quickly will I get my money?
If a borrower's listing ends with enough bids to create a loan for the amount requested, Prosper reviews the borrower's request and may require additional documentation before the loan is issued. Once a loan is issued, however, borrowers receive their loan funds within 2 to 4 business days. Learn more about borrower listing review.
- How do I create a listing?
To create a loan listing, you must be a member of Prosper. Join Prosper now. Membership is free.
If you are not a member of a group, we recommend that you join a group before creating your listing. Borrowers who join groups with a good reputation are likely to receive more favorable bids because its members pay on time. Learn more about joining a group. If you don't want to join a group, you can still post a loan listing as an individual.
When you are ready to create your listing, click on the "Borrow" tab and click "Create a listing".
First, you will be asked to provide your Social Security number, date of birth, bank account information, and employment details. Prosper uses this information to verify your identity and pull your credit score. There is no fee to you for pulling your credit score, which we use to categorize your credit score into one of seven credit grades. There is no fee to you for obtaining your credit grade. If your credit score is 520 or higher, you will be able to proceed to create a listing.
This won't affect your credit score. Although we are making a request for your credit score, we're doing so at your instruction so no inquiries viewable by subsequent users of your credit report will be placed in your credit file. That means your credit score won't be affected when you register or post a listing. Only if you obtain a loan through Prosper will an inquiry that others can see be placed in your credit file.
Your loan listing is what will inspire lenders to bid against each other to make you a loan. Your listing communicates very important details to lenders about you and your loan. Your listing will include what you need the loan for, how much, what group you belong to (if you belong to one), your credit grade, and additional data from your credit report which helps determine your grade. You can request a loan from $1,000-$25,000 (may vary by state), and you can also specify the maximum interest rate you want to pay. You decide how long you want your listing to be posted for bidding. You can add as much or as little personal information as you'd like, such as pictures or web links to a current project, like the independent film you're working on. You can review the details of your listing, including the estimated Annual Percentage Rate (APR), monthly payment, disclosures, and other legal terms.
Once your listing has been created, be sure to invite your friends to endorse your listing. Endorsements have been shown to boost loan funding dramatically. Learn more about getting endorsements from friends.
If you belong to a group that requires listing review, your group leader will have up to 7 days to review your listing and approve or decline the listing. You may withdraw your listing at any time during this process.
Once your listing is active and posted on the Prosper marketplace, you'll be able to see it and track it on the "Your Account > Borrowing" page. You can easily monitor the bids you are receiving by clicking on the listing title and scrolling down to see the bid history. Learn more about bidding.
- What interest rate should I specify?
When you create a listing, you specify the maximum interest rate that you are willing to pay, and lenders bid the interest rate down, unlike some other auctions where the price is bid up. Prosper displays average interest rates on funded loans, which can serve as a useful guide in determining what kind of interest rate you can expect.
Successful borrowers usually set a starting rate which is a few percentage points higher than past rates for their credit grade, group status, and amount requested. For example, if the historical interest rates chart says that borrowers with your credit grade, group status, and loan amount are getting interest rates around 12%, you might start the bidding on your listing around 14% to attract more lenders. Keep in mind, however, that the listing could close at the starting rate, so only specify a starting interest rate that you are prepared to pay.
If you can't choose the rate that you want, you might be bumping up against your state's interest rate cap.
- What is automatic funding?
If you are in a hurry to get your money and would rather not wait to have lenders bid during the full length of the listing (three to ten days), you can choose an "automatic funding" listing, which will be designated with the lightning bolt icon. This choice is for borrowers who just need the money quickly and are less interested in attaining the most desirable interest rate. In the case of automatic funding, as soon your requested loan amount is met by bidders, the listing will close and funds will be transferred into your bank account. In most cases, your loan will fund at the maximum rate specified.
If you don't choose automatic funding, your listing will close after the number of days you specified, from three to ten days later. The more days the listing is up, the greater possibility you have of lenders bidding the rate down.
- What is a bank draft?
When you are confirming your listing, you will have two options for making your monthly payment. The first option is electronic funds transfer, which is free. The second option is bank draft, which will result in an interest rate increase of 1.00%. Rates shown on listing and bid pages assume that the borrower will choose to use the free electronic payment service and will receive a discount of 1.00% from the interest rate that the lender charges to borrowers who do not agree to electronic payments. Borrowers who choose not to use the free electronic payment service will not receive the 1.00% discount. We expect that most borrowers will choose the free electronic funds transfers which are secure and convenient.
If you select bank draft as your method of payment, you are authorizing Prosper to write a check on a monthly basis on your behalf to cover your payment each month. This option has a fee because of the additional processing costs associated with it.
Note: If you choose the bank draft payment method, the additional interest will not be paid to lenders. It is a fee that will be paid to Prosper for processing bank draft payments. Do not choose bank draft as a method of offering higher interest to lenders.
- What does it cost to borrow money on Prosper?
There is a simple fee for obtaining a loan through Prosper, which depends on your credit grade:
Credit grade of AA-D: 1% of your loan amount.
Credit grade of E-HR: 2% of your loan amount.
The fee is deducted from the amount of your loan at origination. For example, if you have a credit grade of B and asked for a $5,000 loan, the 1% closing fee would be $50, and the total amount you would receive at loan closing would be $4,950.
After your loan is funded you will, of course, have to pay interest on your loan. As long as you make timely loan payments, you will not have to pay any other fees. Learn about Prosper fees.
- What next?
Get your friends to endorse your listing. Learn about getting endorsements from friends.