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Prosper is worth a look if you’re hoping to borrow a bigger chunk of your equity (up to 90 percent of the property’s value. It’s also a good pick if your credit isn’t in pristine shape; the company considers scores as low as 640. On the downside, it’s a completely digital outfit, and not an actual lender – which could be drawbacks if you like an in-person, personal experience.
Prosper is a peer-to-peer lender: It doesn’t fund loans itself, but connects borrowers with a group of investors or investment company that will. A pioneer in P2P when it launched in 2005, Prosper originally focused on personal loans, but the company has become a notable name in the home equity lending space in recent years, handling more than $492 billion worth of HELOCs and HE Loans. All home equity products are underwritten and issued by Prosper’s lending partners.
Prosper offers both variable-rate HELOCs up to $500,000 and fixed-rate home equity loans up to $249,999.
When you close on the HELOC, you’ll be required to draw at least $50,000 ($60,000 in Texas) or 50 percent of the line. After that, you’ll need to wait 90 days before you make another draw. At that point, each draw must be at least $1,000 ($4,000 in Texas). The amount you can borrow varies by state, but the maximum is 90 percent of your home’s value (80 percent in Texas).
With the lender’s home equity loan, you can borrow up to 90 percent of your home’s value, provided it’s your primary residence. For second homes or investment properties, that threshold shrinks to 80 percent. (The final determination depends on your financials and creditworthiness, of course.)
Because Prosper’s rates are relatively high for borrowers who don’t have excellent credit, we gave it a 1.6 out of 5 for affordability.
Because Prosper is licensed to lend in more than half the country and it accepts credit scores as low as 640, the company scores a 4.5 out of 5 for availability.
We gave Prosper a 3.8 out of 5 for its borrower experience, reflecting its lack of physical branches and lock-in features, along with limited customer support hours.
Prosper requires a minimum 640 credit score for home equity loans and HELOCs. Properties can be primary residences, secondary residences, or investment properties for loans; first or vacation homes for HELOCs. Borrowers should have homeowners insurance and flood insurance, if applicable.
Those seeking to borrow more than $250,000 may need to incur the cost of an in-home appraisal and obtain title insurance.
To apply for a Prosper home equity product, you’ll need to fill out an online application. The initial application asks for information about how much you want to borrow, your income and your location. Within minutes, you’ll have a personalized interest rate offer; this initial application does not affect your credit score. If you want to proceed, you’ll move on to the next part of the application. If you have questions about a line of credit or loan, you can call 800-954-2172 first, or at any time.
Bankrate insight
You can tap into your home equity — the difference between your home's worth and what you owe on your mortgage — with a home equity loan or a HELOC. With those funds, you can tackle a variety of expenses, like debt consolidation or home renovations.
However, before you dive in, it's important to figure out your loan-to-value ratio (LTV). Lenders use your LTV to determine how much of your equity stake you can actually borrow. (It’s typically 80 percent, although some lenders let you access as much as 90 percent.) The amount of equity they’ll let you tap is one consideration when choosing a lender. Be it a retail bank, online lender or credit union, it may offer different home equity loan rates and terms, too. That’s why it’s important to shop around for the best deal.
Prosper receives rave reviews on Trustpilot: Based on more than 13,000 reviews, the company has a 4.6 out of 5 rating with many customers commenting on the speed and ease of the application process. However, the company has a significantly worse profile with the Better Business Bureau, which has closed more than 500 complaints about Prosper in the past three years.
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Prosper
Bankrate score
3.3
Bankrate scores are objectively determined by our editorial team. Interest rates, fees, loan terms, borrower requirements and customer service are some of the factors that make up Bankrate's score.
Customer score
N/A
Star ranking and total number reflects the lifetime customer reviews received while this lender has been an advertiser on Bankrate. To help serve you with relevant information, the customer reviews shown are limited to only those that this advertiser has received during the past 12 months.
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Bankrate score
Bankrate scores are objectively determined by our editorial team. Interest rates, fees, loan terms, borrower requirements and customer service are some of the factors that make up Bankrate's score.
Customer score
Star ranking and total number reflects the lifetime customer reviews received while this lender has been an advertiser on Bankrate. To help serve you with relevant information, the customer reviews shown are limited to only those that this advertiser has received during the past 12 months.
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Bankrate score
Bankrate scores are objectively determined by our editorial team. Interest rates, fees, loan terms, borrower requirements and customer service are some of the factors that make up Bankrate's score.
Customer score
Star ranking and total number reflects the lifetime customer reviews received while this lender has been an advertiser on Bankrate. To help serve you with relevant information, the customer reviews shown are limited to only those that this advertiser has received during the past 12 months.
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Loan amount |
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Up to $500,000 for HELOCs; up to $249,999 for home equity loans |
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Min. credit score required |
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640 |
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Repayment terms |
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3/10-year draw period/15/27-year repayment term for HELOC; 5–30 years for home equity loans |
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Funds available in |
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As little as 11 days |
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Recent customer review |
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Customer review No reviews available yet. N/A |
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This lender has 0 recent reviews.
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