LendingClub Vs. Prosper: Which offers better personal loans?

LendingClub and Prosper personal loans are ideal for those looking for a smaller loan and are wanting to use a co-signer. Both companies charge similar APR maximums, although Prosper’s minimum APR is lower than LendingClub’s.

While the two lenders boast several similarities, they come with a unique set of pros and cons and benefit borrowers in different credit and financial situations.

LendingClub vs. Prosper at a glance

Both LendingClub and Prosper offer competitively priced unsecured loans. However, they offer different products that are best for borrowers in specific situations. Compare the lender details below to help you make the most informed decision before applying.

Prosper personal loans

Rating: 4.7 stars out of 5

4.7

Learn more in our Bankrate review

• Bankrate's view

  Prosper operates differently than the average run-of-the-mill online lender. Rather than offering a Prosper personal loan, the peer-to-peer company is a marketplace, acting as a broker that exists to match investors with borrowers who meet the eligibility criteria.

  Prosper offers joint applications, which can increase your chances of approval and scoring a more competitive rate. The company also offers prequalification, making comparing offers from multiple lenders easier.

• Pros and cons

  

  Pros

  • Can change payment due date.
  • Low minimum loan amount.
  • Low credit score requirements.

  

  Cons

  • Origination fees.
  • High maximum APR.
  • Co-signers not allowed.

LendingClub Personal loans

Rating: 4.3 stars out of 5

4.3

Learn more in our Bankrate review

• Bankrate's view

  LendingClub originally began as a peer-to-peer lending platform but transitioned to a traditional bank and lender in 2021. Its lower credit score requirements and smaller loan amount of $5,000 make it a stand-out leader.

  However, its fees — including higher rates and an origination fee between 1 to 8 percent — can add significant costs to the loan and detract from its overall value.

• Pros and cons

  

  Pros

  • Direct payment to creditors.
  • No prepayment penalties.
  • Prequalification offered.

  

  Cons

  • Inflexible repayment periods.
  • Low maximum loan amount.
  • Potentially high origination fee.

How to choose between LendingClub and Prosper

Both LendingClub and Prosper have unique benefits that will be advantageous to borrowers in different situations. Here’s how to be sure you’re picking the right lender for your needs.

LendingClub allows co-signers

Borrowers who are in need of a smaller loan and have the help of a creditworthy co-signer will best benefit from a LendingClub personal loan. While LendingClub charges an origination fee and a late fee, with Prosper, you may be subject to four fees, including a returned payment and a check payment fee.

LendingClub also charges a higher maximum rate than most lenders, so only those with an excellent credit score — or a co-signer who does — will benefit from a LendingClub personal loan.

Prosper is best for fair credit borrowers who want to consolidate

Prosper’s credit minimum of 640 is fairly low compared to most personal loan lenders, including fair-credit lenders. Its general eligibility requirements are much less stringent than lenders, especially for those looking to consolidate high-interest debt.

For example, it only requires that you have a stated income greater than $0 and a debt-to-income ratio of no more than 50 percent, which is much lower than the ideal lender limit of 36 percent.

If you don’t meet these requirements, Prosper does allow for joint applicants. This can increase your chances of approval and scoring a lower interest rate.

Compare more lenders before applying

Prosper and LendingClub are strong lenders that allow for co-signers or joint applicants. However, Prosper may be easier to qualify for, even with the help of a joint borrower. LendingClub, on the other hand, may be the more affordable option for those with a stellar credit score, repayment history and high annual income — or those with a co-signer who meets these requirements.

If you’re having trouble deciding between these two lenders, prequalify for both to see which one offers the best rates and charges the fewest fees.