How to apply for a loan with Prosper
Like its online brethren, Prosper aims to give prospective borrowers loan information in just a few clicks. Fill out some basic identifying information, like how much you’re looking to borrow and what the money will be used for (debt consolidation is the most common use), and get an answer within a minute or two.
Prosper then will conduct a soft credit check, which won’t impact your credit rating.
First-time borrowers must meet the following criteria:
- Debt-to-income ratio of no more than 50%
- Stated income greater than $0
- No bankruptcies filed within the last 12 months
- Fewer than five credit bureau inquiries within the last six months
- Minimum of three open trades reported on their credit report
If you’re approved, Prosper, like all lenders, will perform a hard inquiry, which will be noted on your credit report and can impact your credit score.
Behind the scenes, Prosper gives your loan a letter grade: AA, A, B, C, D, E or HR for high risk. The lower the grade, the higher the corresponding risk and interest rate on the loan. Origination fees typically skew lower for those with a better rating, too.
In some cases, Prosper may call your bank or your employer to verify your information. The company may also ask for supporting documentation to be uploaded to your account. The screening process typically takes about five business days.
Investors decide if they want to back your loan by reviewing your information anonymously and choosing to fund all or, more often, a portion of your loan. In return, they receive a percentage back above their investment amount once you’re fully paid up.
Lenders have to be willing to fund your request, so even if you’re granted favorable terms in the application process, there is a chance you won’t get any money. If that happens, you can reapply by repeating the process. Keep in mind that if you’ve been late on a previous or current Prosper loan, you may not get approved for another one.