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If you’re in the market for a personal loan, there are a variety of lending structures to choose from. Some are traditional, like banks or credit unions, but others are less so, such as peer-to-peer (P2P) loans, in which individual borrowers and investors do business together.
LendingClub and Prosper are two of the more widely known P2P lenders. Both offer competitive interest rates, easy application processes, and quick funding decisions. To get a better picture of what these two P2Ps can offer, let’s take a quick look at each.
In this comparison:
- LendingClub vs. Prosper: At a glance
- Prosper vs. LendingClub: Which is right for you?
- Where to find other options
LendingClub vs. Prosper: At a glance
|Rates (APR)||10.68% – 35.89%||6.95% – 35.99%|
|Loan Amounts||$1,000 – $40,000||$2,000 – $40,000|
|Term Lengths||36 or 60 months||36 or 60 months|
|Origination Fee||2% – 6%||2.41% – 5.00%|
LendingClub Personal Loans
LendingClub offers a quick application process that can be completed in minutes, and if you’re approved, you will have the opportunity to select the best offer for you. Once the loan process is complete, you can expect the money in your bank account within a few days, typically a week or less.
Applicants must have a Social Security number, a bank account, a steady source of income, and a debt-to-income ratio that does not exceed 30%.
You can learn more about it in our LendingClub Personal Loan review.
Prosper Personal Loans
Much like LendingClub, Prosper’s application process is fairly quick, and your lowest eligible rates and a list of offers will be provided within minutes. Once you select the offer that fits your needs, the funds will be sent to your account within a few business days.
Applicants must have a Social Security number, an open and active bank account, a steady source of income, and a debt-to-income ratio that does not exceed 50%.
You can learn more in our Prosper Personal Loans review.
Prosper vs. LendingClub: Which is right for you?
As you can see in the table above, both Prosper and LendingClub offer similar loan terms and rates. This can make it difficult to determine which, if either, is the right fit for you. To help, we’ve broken down some scenarios below in which one lender may make more sense than the other.
- If you have good credit
- If you want a business loan
- If you want a HELOC
- If you want to finance medical care
- If you live in West Virginia
- If you live in Iowa
If you have good credit: Prosper
As you can see in our ratings above, we rated Prosper as a good credit lender, whereas LendingClub was rated as a fair credit lender.
That’s because our team has determined that borrowers with fair credit (650 – 699) are more likely to get favorable rates with LendingClub, whereas those with a good credit score may fare better with Prosper.
That said, neither lender scored particularly well in their category, and rates depend on a variety of factors, so you’d be smart to compare quotes from both lenders (and others) before submitting a full application.
If you want a business loan: LendingClub
Prosper used to offer small business financing but discontinued the service. So if you’re looking for a business loan, LendingClub is your only option between the two. You can learn more about what it offers in our LendingClub Business Loans review.
You can see how LendingClub’s business loans stack up against other options in our LendingClub vs. Funding Circle business loans comparison and by reviewing our picks for the best small business loans.
If you want a HELOC: Prosper
If you own your home and want to tap into your equity to secure a loan, Prosper is the way to go. LendingClub doesn’t currently offer HELOCs, but Prosper does.
However, Prosper’s HELOC program is still growing, and currently, only residents of Alabama, Florida, Arizona, and Texas are eligible for this type of loan.
>> Read more: Best Home Equity Lines of Credit
If you want to finance medical care: LendingClub
LendingClub offers a Patient Solutions program through which borrowers can work with their dentist or doctor to finance a procedure.
Prosper’s personal loans could be used to pay for medical care or to consolidate medical debt, but it doesn’t offer a similar medical financing program that loops in your doctor.
If you live in West Virginia: LendingClub
Prosper is not currently available to borrowers in West Virginia, making LendingClub the clear winner in that state.
If you live in Iowa: Neither lender
If you live in Iowa, neither lender is currently open for business. In this case, we recommend looking into the lenders mentioned below.
Where to find other options
If you have decent credit, a well-paying job, and a low debt-to-income ratio, you may find that LendingClub and Prosper both represent viable options for securing a personal loan.
That said, borrowers, particularly those with good credit, should also consider other personal lending options, including their bank as well as other online lenders to make sure that they are getting the best rate for their current credit and financial situation.
If you want to compare LendingClub to other companies, check out our review of SoFi vs. LendingClub. If you’d like to research additional options, check out our guide to the best personal loan lenders.
Author: Daniel Caughill