Advertiser Disclosure

Prosper Debt Consolidation Review

Prosper is a peer-to-peer lending marketplace, which means that instead of borrowing from a bank, you are borrowing from investors. All of that takes place behind the scenes, so debt consolidation loans from Prosper function just like any other lending institution.

In 2005, Prosper was the first company to bring lending to the peer-to-peer (P2P) marketplace. P2P marketplaces (i.e. Airbnb, Uber) offer individuals a place to exchange goods and services. Think of Prosper as more of a middleman than a lender. Peer-to-peer lending matches borrowers with people interested in investing. Well, that’s how things started anyway.

The reality is your debt consolidation loan will be financed through Webbank, an online lender, and Prosper investors help fund the loans, but funneled through the bank.

Prosper comes with the convenience of most P2P marketplaces, which means it’s online and can be accessed wherever there’s Wi-Fi.

However, convenience doesn’t necessarily mean it’s the right lender for you. Consumers with poor credit may pay interest and fees that make the loan expensive, while those with higher credit profiles (740 credit score and above) may find less expensive loans through other lenders because of Prosper’s fees and interest rates.


  • Type of Debt Relief – Debt Consolidation Loan
  • Eligibility and Requirements – 600 credit score; debt-to-income (DTI) below 50%; income of greater than $0.
  • Fees – 1%-5% origination fee; $15 late fee; $15 insufficient funds fee; check fee
  • Credit score impact – Minimal
  • Consumer Reviews – Mixed

How Prosper’s Debt Consolidation Loan Program Works

Prosper caters to both borrowers and aspiring investors.

Consumers interested in taking out a debt consolidation loan through Prosper should head to its website and click the “check your rate” button.  It will ask how much you want to borrow, and you can select an amount between $2,000 and $50,000. It will then ask how you plan to use the loan; here you can select debt consolidation. The length of Prosper’s loan terms range from 2-5 years.

The application will ask for basic personal information, including name and address, followed by questions about your income, employment and housing costs. After you plug in your Social Security number, Prosper will run a soft credit check before revealing your rates.

Investors will see a Prosper Rating, a letter grade that indicates the risk of lending to you. They will also see a Prosper Score, of 1-11 that ranks your credit.

Individual investors with Prosper sign up online, just like borrowers do, and they can contribute as little as $25 to get started. They can choose to invest in induvial borrowers, or the company can pick their investments for them.

This doesn’t have an impact on borrowers, though. Once you’re approved for a loan, you’re approved, with the money in your bank account in 1-3 days.

Prosper Debt Consolidation Loan Eligibility and Requirements

To apply for a Prosper debt consolidation loan, borrowers must be at least 18 years old and a U.S. resident in a state where Prosper makes loans. You also must have a U.S. bank account and a Social Security number.

The lender rates applicants based on the applicant’s TransUnion FICO credit score, credit history, debt-to-income ratio (DTI) and income. The company doesn’t list a minimum credit score in its borrower information but does tell potential investors that it requires scores of 600-plus.

Besides the Prosper Rating, investors also have access to a Prosper Score that rates the borrower’s credit strength from 1-11. The higher the score, the better the borrower’s credit.

A decent credit score and reasonable DTI should get your foot in the door. Five eligibility requirements borrowers should keep in mind when applying for a debt consolidation loan through Prosper are:

600 credit score – This is considered the minimum score needed to qualify for a loan through Prosper. In 2023, 83% of U.S. consumers’ FICO scores were higher than 600. The average FICO score of borrowers approved for a loan from Prosper in 2023 is 712. The lower the score, the higher the interest rate and other fees are. Why does credit score matter? Because 27% of borrowers with scores 600 or lower are likely to default on a loan, according to Experian.

Debt-to-Income (DTI) below 50% – Industry analysts consider a DTI below 50% necessary to be approved for a Prosper loan, and the median DTI of those who borrowed from Prosper in 2023 was 18.6%.  Median means that half of those who borrowed had a higher DTI, and half had a lower one. Traditional lenders generally require a DTI of 43%.

DTI is how much of your monthly pretax income goes to debt payments. To find your DTI, add up all your monthly debts including rent/mortgage, credit cards, loans, child support, or any other payment that appears on your credit report. Divide the sum of your monthly debts by your monthly gross income.

If your debt costs you $900 a month and you make $2,000 a month before taxes, you have a DTI of 45% (900 ÷ 2,000 = .45).

Income of greater than 0$ – Prosper doesn’t have a minimum income requirement, but you must be able to show proof of income to qualify. The lender takes income into account, comparing it to credit factors for its Prosper rating.

No more than five credit inquiries within the last 12 months – While this is another credit eligibility requirement that Prosper doesn’t address on its website, limiting credit inquiries is vital when applying for low-interest credit. A credit inquiry shows on your credit report when a potential lender does a hard pull of the report, which means you’ve applied for credit. Too many inquiries are considered a red flag indicating you’re desperate to borrow money.

Minimum of three open credit accounts – Lenders like to see that someone has a credit history. If you have three credit accounts (credit card, personal loan, mortgage, auto loan, etc.), it adds to the likelihood you’ll get a Prosper loan.

No bankruptcies in the last 12 months – Lenders stay away from anyone who’s filed for bankruptcy within the year and Prosper likely won’t approve your loan application if you’ve gone through bankruptcy within the last year.

Co-Borrower Option

Applicants who don’t qualify for a Prosper debt consolidation loan can apply with a co-borrower who has better financial standing. The risk is a co-borrower has an equal obligation to pay the loan. This is different from a co-signer, who is backup if a borrower can’t pay, but otherwise isn’t responsible for the loan.

Who Borrows from Prosper?

An example of a Prosper borrower shown in the prospectus for investors was approved for a $2,500, two-year loan. The borrower has a 780-799 TransUnion FICO score, 49% DTI, owes $3,025 on credit cards, has 15 open credit lines and makes between $25,000 and $49,999 a year. The borrower has a Prosper Rating of A, and a Prosper Score of 10. The loan’s interest is 14.30% APR.

The average Prosper loan is $17,054 for borrowers with an AA rating. Prosper lists the best risk borrowers from top-to-bottom as A, B, C, D, E and HR (high risk). The average HR borrower has a loan of $8,156. Overall, the average loan is $14,381.

Fees for Prosper’s Services

The good news is that Prosper charges no prepayment penalty if you pay off the loan early. The bad news is that’s about the only thing Prosper doesn’t charge for. Here are a few of the fees borrowers can expect to pay for a loan through Prosper.

Origination fees – 1%-5%: This is a fee charged for establishing an account with Prosper. Not all lenders charge an origination fee, and the amount charged by those who do, varies widely.

APR – 6.99-35.99%: The max APR charged by Prosper is higher than you’ll find from many lenders. If you have excellent credit, you can save money by going elsewhere for your loan.

Late payment fee – $15 or 5% of payment amount: Prosper gives you a 15-day grace period starting the day your payments are due. If you fail to make a payment on your due date or within the grace period, you will be charged $15 or 5% of the unpaid monthly amount, whichever is greater.

Check fee: If you plan to pay by check, be prepared to fork over $5 for a check fee. An easy way to avoid this fee and to make sure you’re staying ahead of payments is to enroll in autopay, which can lower your rate by .5%.

Pros and Cons of Debt Consolidation with Prosper

Pros of Prosper

  • Pre-approval option
  • No prepayment penalty
  • A-plus BBB rating
  • Co-borrower allowed for those who don’t qualify

Cons of Prosper

  • A lot of fees
  • Higher APR rates
  • Expensive for borrowers with low credit scores

Prosper’s upside comes in terms of experience and convenience. It’s been around longer than any other P2P lender, which has helped it to maintain an A-plus rating with the Better Business Bureau. Its lenient requirements open the door to a lot of consumers, and its pre-approval option lets you see what rates you qualify for without harming your credit score.

The downside is the fees. Not all lenders charge them, and those who qualify with lenders who don’t may want to see if they can get a better deal.

Is Prosper Right for Me?

Prosper’s APRs are higher than many lenders, even for borrowers with higher credit scores. Those who want to borrow more than $50,000 also should look elsewhere.

Prosper is a good fit for borrowers with decent credit and enough income to pay off relatively high interest rates, but don’t need a large loan.

Prosper may work for young borrowers who are in over their heads with credit card purchases. It has a DTI cap of 50%, which is higher than most traditional lenders would be comfortable with. On the flipside, low-income consumers with severe debt might not make the DTI or credit score cutoff.

Alternatives to Prosper

Debt Management

Debt management is a way to pay off unsecured credit card debt, with a lower interest rate. You make a fixed monthly payment to a nonprofit credit counseling agency, which works with your creditors to lower interest rates. It is not a loan, but a way to eliminate high-interest credit card debt in 3-5 years. While you’re in the program, you will have to give up using your credit cards.

Avant Debt Consolidation Loan

Avant caters to a similar base as Prosper. Applicants with a 580 credit score can apply, though most of its borrowers have credit scores between 600 and 700. As with Prosper, there is no minimum income requirement, but proof of income must be verified. Loans range from $2,000-$35,000, with APRs of 9.95-35.99% for terms of 12 to 60 months. Fees include an “administrative fee” of up to 4.75% when the loan is approved, and a $25 late payment fee.

Credible Debt Consolidation Loan

Credible is another option for borrowers with low credit scores, with a minimum of 600. It lends more than Prosper and other similar online lenders, up to $100,000 for 12 to 84-month terms. APRs range from 4.60%-35.99%. Credible works with multiple lenders, so applicants may get several offers to choose from, some of which may have origination or other fees.

Discover Debt Consolidation Loan

Discover, unlike Prosper and some of the alternatives, does not charge an origination fee. It also has lower APRs, ranging from 6.99% to 24.99%. Loan amounts are $2,500 to $40,000 and repayment terms are 36-84 months. There’s a minimum household income requirement of $25,000. Discover also has a “buyer’s remorse” option. If you return the money within 30 days of receiving it, you pay no interest.

Lending Club Debt Consolidation Loans

Lending Club started out as a P2P lender, like Prosper. Since then, it’s changed its model and is one of the nation’s biggest online banks, offering checking and savings accounts, and other bank products. Loan amounts range from $1,000 to $40,000 for terms of either 36 or 60 months. It has similarities to Prosper in that applicants can have a credit score as low as 600. It has a  3-6% origination fee and interest is 9.57-36% APR. The lower the borrower’s credit score, the higher the fee and interest are. Its debt-to-income ratio is capped at 40%. Like Prosper, Lending Club allows borrowers with bad credit to have a co-borrower.

LightStream Debt Consolidation Loan

LightStream makes it clear on its website that it makes low-interest debt consolidation loans for borrowers with good-to-excellent credit ratings. Do not overlook “good-to-excellent credit ratings.” It doesn’t give a specific minimum score, but 680 or higher is generally considered good. LightStream also stresses that if you have assets like savings or a retirement account, it will work in your favor when applying. Rates are capped at 20.49%, much lower than Prosper and other online lenders that cater to customers with lower credit scores. A downside is that there’s no prequalification option, so if you want to see if you qualify, it counts as a hard credit pull. If you’re not sure your credit history will qualify you for a loan, don’t damage it further with the credit inquiry.

Upstart Debt Consolidation Loan

Upstart is a Credible product, but with smaller loan amounts and a lower credit score allowance. Applicants can have a credit score as low as 580 and borrow up to $50,000. The loan term is either 36 or 60 months. Loans come from multiple lenders, and there are origination fees on some loans.

SoFi Debt Consolidation Loan

SoFi is a good choice for borrowers with good credit. SoFi’s APRs are 8.99-25.81%, with no origination fee. While SoFi doesn’t specify a credit card minimum, multiple sources say it is 680. Loan amounts are $5,000 to $100,000 and repayment plans range from 3-7 years. SoFi also offers unemployment protection for borrowers.

Prosper Reputation and Consumer Reviews

Prosper has led the pack in P2P funding since 2005. Since then, it has serviced more than $21 billion in loans to more than 1.3 million customers while maintaining good standing with the Better Business Bureau.

Positive reviews highlight Prosper’s easy-to-use interface. Reviewers said applying for the loan was simple and straightforward. However, many consumers complain that Prosper doesn’t live up to its reputation, citing miscommunications as the main grievance. For example, one customer reported receiving less money than he expected, while another reported long wait times for customer service that often led to being disconnected.

About The Author

Bents Dulcio

Bents Dulcio writes with a humble, field-level view on personal finance. He learned how to cut financial corners while acquiring a B.S. degree in Political Science at Florida State University. Bents has experience with student loans, affordable housing, budgeting to include an auto loan and other personal finance matters that greet all Millennials when they graduate. He has a prodigious appetite for reading, which he helps feed with writing from Scottish philosopher Adam Smith, the “Father of Capitalism.” Bents writing also has been published by JPMorgan Chase, TheSimpleDollar and


  1. N.A. (2023, April) Prosper Performance Update. Retrieved from
  2. N.A. (ND) 600 Credit Score: Is it good or bad? Retrieved from
  3. N.A. (ND) Answers to Your Loan Questions. Retrieved from
  4. N.A. (ND) Retrieved from
  5. N.A. (ND) LendingClub Media Center. Retrieved from
  6. N.A. (ND) Lightstream. Retrieved from
  7. N.A. (ND) Personal Loans. Retrieved from
  8. N.A. (ND) Personal Loan for Debt Consolidation. Retrieved from
  9. N.A. (ND) What are the minimum criteria to borrow on Prosper? Retrieved from
  10. N.A. (ND) What types of fees are charged on loans? Retrieved from
  11. N.A. (2023, June 10) Business Profile Retrieved from
  12. N.A. (2023, June 11) Prosper Funding LLC Borrower Dependent Payment Notes. Retrieved from