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Firstly, Prosper is not the lender. It is a website that makes it easy for anyone to borrow money as well as lend others money, hence the name peer-to-peer loans. Thus, the lenders can be actually individuals or loan companies and it does not really matter to the borrower. The only thing that matters is that Prosper loans are cheaper compared to independent loan companies for an unsecured loan. This is because many individual lenders are willing to accept slightly higher returns compared to the average yields from traditional investment products.
Advantages of Prosper Unsecured Loans
* Unsecured Prosper loans can be used for any purpose and the lenders usually do not fix the purpose for your borrowing. That said, it is highly recommended you borrow money for a productive intention.
* Lower loan APR - Due to the reduced overheads on online lending, peer-to-peer lenders require lesser margins in order to be profitable. Furthermore, lenders need to bid on loan offers and the lowest bid wins the business. Thus, competition will drive loan rates lower and this environment helps the borrowers.
* Unsecured loans up to $25,000 are available for anyone with sufficient credit and income. This is the best place to get a cheap unsecured loan at low APR.
* Long payment terms. You can get unsecured installment loans up to 3 years to pay back. This gives borrowers more time to handle their debts and the best part is, if you have a sudden windfall, you can pay the entire loan ahead of schedule. Check whether this can save you the interest fees for the remaining periods.
* There are many different Prosper community groups online based on specific interests or location. It will be easier to get loans from Prosper lenders belong to the same community group. There are also community leaders who will help new borrowers write their loan request listings.
Disadvantages of Prosper Unsecured Loans
* Note that Prosper will report to credit agencies any borrowers who do not pay back on time. This will further damage your credit score, while some online loan companies do not do so.
* You have to disclose your personal information to every peer lenders, such as your photograph identification, income, existing debts, bank statements etc. There is to ensure borrowers do not try to run away after getting the money from Prosper.
* Unlike online loan companies, Prosper lenders tend to ask more questions before they are willing to make the loan. Borrowers will have to respond fast and honestly, or these lenders may decide to look elsewhere.
* Note that there is no guarantee you can always get a loan filled at Prosper. Sometimes, there may be insufficient lenders willing to take part, especially if your offered APR is too low.
Unsecured personal loans from Prosper are popular because they fill the gap between banks and high risk lenders. Sometimes, you cannot get approved because your credit score is a few points short of their benchmark, while it would be too unfair to pay bad credit loan rates at online loan companies. Now, you can get unsecured loans from Prosper, which is easy to pay back without subjecting yourself to risks of accumulating debts.
If you find it difficult to get sufficient peer to peer lenders on Prosper to give you a 1500 loan, perhaps you are asking for too big a sum. Consider a secured loan using your car or home title instead.
