Prosper, which was founded in 2006, is one of the first peer-to-peer lending platforms in the U.S. It currently offers fixed-rate loans ranging from $2,000 to $40,000. A Prosper personal loan is a great option if you need cash to bridge your funding gap.
Prosper can offer borrowers next-day funding in some situations, as long as borrowers have a minimum of a good credit rating and quickly provide all documentation to support their ability to repay the loan. If one borrower is unable to qualify for funding, the online lender may be able to help them. The downside to Prosper loans is that you will have to pay origination fees for both individual and co-borrowers. Your interest rate for a Prosper loan may be slightly higher than that of competitors.
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How to Get a Personal Loan
Although personal loans can provide quick access to funds when you are in dire need, you should have a plan for how you will repay them. Consider all options before you apply for personal loans. Then, create a repayment plan. Compare multiple lenders and do your research to find the best personal loan rate.
When comparing personal loans, keep in mind that the rate you receive may be different from the rates offered by lenders. The rate of your personal loan depends on many factors including your credit score, income, and the loan amount and terms. You might be eligible to refinance your personal loans later if you are not satisfied with the current rate on your personal loan.
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Some lenders allow you to pre-qualify for loans or check your rate with a soft credit inquiry. This doesn’t affect your credit score. However, if a lender asks for hard credit to qualify you, it may temporarily lower your credit score. Most lenders will conduct a hard credit inquiry once you have submitted an application for a personal loan. Although interest rate is the most important characteristic, there are many other terms that you should consider. Ask the lender if there are late or origination fees and if they have prepayment penalties. The loan’s lifetime cost can be increased by fees and penalties.
Alternatives to Personal Loans
Personal loans can be used for many reasons, such as managing debt or unexpected expenses. However, they are not the only option. These are some alternatives to personal loans.
Home equity loan, home equity credit (HELOC), and cash-out refinance: Your home’s equity can be used to help you bridge your funding gap. Because the loan is secured by your house, you may be able get a lower interest rate on a larger amount of money. You could lose your home if the loan is not paid on time.
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Balance transfer credit card: Some balance transfer credit cards offer introductory rates as low as 0% APR, for as little as six to 24 months. A balance transfer credit card can help you consolidate your debt quicker. It’s crucial to have a plan in place to repay the debt by the end of the introductory period. Otherwise, your interest rate will rise.
Personal savings: Instead of taking out debt to pay your bills, you can plan ahead and be proactive. As long as your cash needs are not urgent, this will allow you to save money. A six-month emergency fund can be a good way to have a buffer. It might be more beneficial to save money for large purchases than to borrow from a personal loan.
Credit counseling is free: Instead of taking on more debt to consolidate existing loans, credit counseling might be a good option. Credit counseling is available to help you improve your financial situation, even though you won’t get money to pay your bills.
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Pros and cons of a Prosper Personal loan
- Some loans can be funded next-day
- Personal loans for joint applicants
- You can borrow up to $40,000
- Late payments are subject to a grace period of 15 days
- It is not available in West Virginia or Iowa
- All loans are subject to Prosper’s origination fees
- There are only two options for loan terms: three and five year.