Prosper and LendingClub are online loan organizations catering to consumers with excellent credit and fair credit, respectively. They were among the first companies to engage in peer-to-peer lending and now provide unsecured personal loans for various reasons, including debt consolidation, home repair, and more.

What makes LendingClub and Prosper different from one another? Which of these loan options will be most beneficial to you? Given the similarities between the two, the interest rate that is provided to you may be the deciding factor. Despite this, comparing the costs, approval procedures, and unique characteristics of these two firms is worthwhile.

Loan Amounts

Personal loan amounts from either LendingClub or Prosper may go as high as $40,000. However, the minimum loan amount is where they diverge: LendingClub will provide you a loan for as little as $1,000, whereas Prosper requires that you borrow at least $2,000 for a loan to be considered.

Term Lengths

Both financial institutions provide the same choice of term lengths: 3 or 5 years. If you choose a loan with a term of five years rather than three years, you will have a lower monthly payment, but the total loan of interest you will pay throughout the loan will be higher.

APR

Although the ranges of annual percentage rates (APR) offered by each lender are comparable, the lowest APR offered by LendingClub is lower than that offered by Prosper. The annual percentage rates (APRs) offered by LendingClub vary from 7.04% to 35.89%, whilst the APRs offered by Prosper range from 7.95% to 35.99%. Borrowers with exceptional credit histories are often eligible for the best interest rates each lender offers.

Rates are valid as of September 14, 2021; however, given that advertising rates are subject to change at any time, Prosper may, in the near future, provide rates that are more competitive than those offered by LendingClub.

Additional Fees

Both the borrower and the lender are responsible for paying any applicable fees. The origination fees cover the costs that a lender incurs in processing and managing a loan. LendingClub's fees for borrowers range from 3% to 6% of the loan amount, whereas Prosper's fees range from 2.41% to 5%. The amount of this charge will reduce your total loan amount.

Both the first and secondary lenders will charge the borrower a late fee of either $15 or 5% of the total amount owed, whichever is larger. When your payment is more than 15 days overdue, you will be subject to a fine.

Minimum Credit Score

Both of these creditors will work with customers who have credit scores that are considered to be average, setting the minimum credit score criterion at 600. When you apply for a new loan, consideration will be given to several factors besides your credit score. One of them is your capacity to repay the loan.

Prequalification

Before applying for a personal loan, it is helpful to be prequalified for one so that you can have an idea of your APR and conditions. You are able to accomplish this without it having an effect on your credit score when you use either Prosper or LendingClub. When you apply for prequalification, you must supply information about your finances, such as your yearly income and your monthly rent or mortgage payment.

Co-signers and Co-borrowers

If you cannot qualify for personal loan on your own, adding co-signer to the loan with a stable income and high credit might increase your chances of being approved for the loan. Unfortunately, neither LendingClub nor Prosper provides this choice as one of their available options. However, you may apply for a loan with a co-borrower via any of the lenders.

Someone with equal responsibility for the loan repayment is referred to as a co-borrower. When someone applies for a personal loan with another person, the lender looks at their credit history and income. Your application for a loan can only be accepted if even one of the borrowers satisfies the lender's eligibility requirements.

Even if you can apply for the loan on your own, adding a co-borrower who satisfies all of the conditions and has a stable income may allow you to qualify for a lower interest rate or a bigger loan amount.

When to Utilize the LendingClub

The ideal candidates for LendingClub are those who:

• Can be eligible for the rate with the lowest APR
• You need a loan amount that is less than $2,000
• They want to make direct payments to their debtors

When to Utilize the Prosper

The ideal candidates for Prosper are those who:

• Maintain a DTI ratio that is higher than 40% but lower than 50%
• They are eligible for an APR lower than they would get with LendingClub