Debt Consolidation

The Complete Guide to Prosper Personal Loans

Written by Rebecca Lake

When you’re knee-deep in credit card debt and paying big bucks in interest, digging your way out of the mess can seem impossible.

Taking out a personal loan to consolidate your cards is a smart move if you want to snag a lower APR and have just one payment to deal with each month. You can apply for a personal loan online and get pre-approved in as little as 60 seconds without hurting your credit score.

In fact, consolidating your debt with a personal loan can actually help your credit. Instead of having several maxed out credit cards, you’ll have a single installment loan. That lowers your credit utilization ratio which can boost your score in the process.

If you’re ready to combine your high interest credit cards, the first step is finding the right lender. You could go through a traditional bank but online peer to peer lenders like Prosper have a lot to offer. Take a look at our in-depth guide to getting a personal loan through Prosper  to decide if it’s the best fit for your borrowing needs.

Prosper Highlights

Here’s a quick guide to Prosper’s pros and cons:


  • Borrowing limits up to $35,000
  • 5.99% APR for qualified borrowers
  • Fixed rate for the life of the loan
  • No application fee
  • No prepayment penalty
  • 3 and 5-year loan terms
  • Minimum FICO score required for approval is 640


  • Maximum APR is 36%
  • Loan closing fee of 1 to 5%
  • Loan funding isn’t guaranteed
  • Lengthy underwriting and approval process

How Prosper Works

Prosper is a peer-to-peer lender that offers unsecured personal loans funded by individual investors. To get a loan, you put a listing on the site describing how much you want to borrow and what you need the money for. Investors look at the different loan listings and decide which ones they want to fund.

Once the loan is funded you have to go through Prosper’s verification and underwriting process before you can get the money. After the loan funds are released you’ll make one payment to Prosper each month with interest. The payment is divvied up among the individual investors who ponied up money for the loan.

Prosper loans are issued through WebBank, a Utah-chartered Industrial Bank. WebBank is an FDIC member, which means you have the same account protections as you would if you were borrowing from a traditional bank.

Who Can Get a Loan Through Prosper?

To apply for a Prosper loan you have to be at least 18 and a U.S. citizen. You also have to live in a state where Prosper loans are available. Currently, Iowa, Maine and North Dakota are excluded from that list.

All applicants must have a bank account and a minimum credit score of 640 (Prosper uses Experian to check credit scores). The initial rate check only counts as a soft inquiry and won’t affect your credit, but if you apply for a loan and it’s funded, a hard inquiry will show up on your credit report. Prosper also assigns borrowers a risk rating based on its internal credit scoring system.

Applying for a Loan

The first step in getting a Prosper loan is checking your rate. To get started, you just fill in the amount you want to borrow, what you want to use the loan for and your estimated credit score range on Prosper’s online form.

About the author

Rebecca Lake

Rebecca Lake is a personal finance writer and blogger specializing in topics related to mortgages, retirement and business credit. Her work has appeared in a variety of outlets around the web, including Smart Asset and Money Crashers. You can find her on Twitter at @seemomwrite or her website,

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