Prosper, LendingClub and Upstart are peer-to-peer (P2P) lenders. Upstart is the youngest of the three, established in the spring of 2012. Prosper and LendingClub were founded in 2005 and 2006, respectively.
Prosper and Upstart solely deal in personal loans, but LendingClub has a few more options in its suite of lending solutions, including auto refinancing, business loans and patient financing for physicians through LendingClub. All three providers operate online.
What is a peer-to-peer lender?
Peer-to-peer lenders are providers that source the funds for your loan from individual investors, rather than from a bank. These investors — or “peers” — can choose to partially or fully fund a loan.
What are the eligibility requirements?
Beyond being at least 18 years old and a citizen or permanent resident of the US, you must also meet the following requirements to apply for a loan from each lender.
Prosper
A FICO credit score of at least 640.
LendingClub
Good to excellent credit
A bank account in your name
Not a resident of Iowa or West Virginia
Upstart
A credit score of 620
A regular source of income
A verifiable bank account in your name
Not a resident of West Virginia
Which offers lower interest rates?
Prosper
You’ll find rates from 8.99% to 35.99% APR with Prosper.
LendingClub
LendingClub offers APRs that range from 9.57% to 35.99%.
Upstart
With Upstart, you can expect an APR range of 7.80% to 35.99%.
Winner: Upstart
While Upstart has a higher starting APR, its maximum rate is about 5% less than its competitors. This means that even if you don’t qualify for the lowest APR these lenders offer, you don’t have to worry about being charged more than 30% in interest and other fees.
Which comes with fewer fees?
Prosper
Prosper charges an origination fee of 1% to 5% of the borrowed amount. If you want to pay by check, there’s a $5 processing fee. There is also a late fee of $15 or 5% of the amount due and an insufficient funds fee of $15.
LendingClub
LendingClub charges an origination fee between 1% to 6%. Its late fees are the same as Prosper’s, but its check processing fee is higher at $7.
Upstart
Upstart’s origination fees can be as low as 0% or as high as 8%. And while it has the same late payment fees as Prosper and LendingClub, its grace period is only 10 days.
Winner: Prosper
Prosper wins out by having the lowest range for origination fees, charging no more than 5% of the loan amount. Unless you qualify for Upstart’s 0% APR, Prosper will definitely make you pay less in fees.
Case study: Lucas’s hard work pays off
Consider this example. Lucas’s business is up and running. It’s doing well, his investors are happy and he’s starting to turn a profit. Now that everything sailing smoothly, he wants to consolidate some of the personal debt he built up while he was bringing his vision to life.
Traditional banks aren’t too convenient, and he’s still pretty busy these days. He’s interested in online lenders, and he needs $12,000 to get everything in one place. Lucas considers Prosper, LendingClub and Upstart for his borrowing needs.
Prosper
8.99%
$120 to $600
Check rates without affecting credit, with decisions that typically come within a week of submitting your application.
LendingClub
9.57%
$120 to $720
Rate checks don’t affect credit, and the entire process from application to disbursement of funds can take less than a week.
Upstart
7.8%
$0 to $960
Credit won’t be affected by rate check, and funds are generally sent from one to five business days after you’ve signed the loan agreement.
After weighing the pros and cons, Lucas ends up choosing Prosper. Since he doesn’t need the money right away, funding speed isn’t as important as the APR and origination fee. And because Prosper offers a longer grace period with payments — and potentially a lower APR and origination fee — it seems like the best fit for his needs.
Which has a better reputation?
Prosper
As of October 2018, Prosper rates 6 out of 10 based on 50 reviews. However, it is accredited by the Better Business Bureau (BBB) and has a rating of A+ based on the BBB’s grading system.
LendingClub
LendingClub has more recent reviews on Trustpilot than Prosper, but this isn’t necessarily a good thing — it only scores a 4.7 out of 10. Its BBB profile is a little better with an A- rating and accreditation.
Upstart
Upstart has the highest rating on Trustpilot, with a score of 9.8 out of 10. However, as of this writing, the majority of reviews were left in the last year. It is also accredited by the BBB and has an A+ rating.
Winner: Upstart
Upstart certainly has the best score, but you’ll want to vet reviews carefully and talk to Upstart itself before applying to make sure you’re getting a good deal.
How much can I borrow with each lender?
Prosper
You can borrow from $2,000 to $50,000 through Prosper.
LendingClub
Personal loans range from $1,000 to $40,000 with LendingClub.
Upstart
Upstart offers loans from $1,000 to $50,000. The amount you’ll ultimately qualify for depends on your state of residence and credit profile.
Winner: Upstart
Upstart easily takes the win by offering a broader borrowing range of loan amounts than Prosper and LendingClub.
Which lender can get me money faster?
Prosper
Prosper allows you to check your rates within minutes. A full application includes standard personal and financial information and may require you to upload supporting documents. Application decisions are usually made within one week.
LendingClub
Your application with LendingClub should only take a few minutes to complete. From there, it goes to underwriting. If all your documents are uploaded correctly, it can take a few business days from start to finish to receive your funds.
Upstart
The application process with Upstart is fairly quick. While there isn’t a solid start-to-finish time, once your application is approved and you accept an offer, you could see your funds in as little as one business day. Loans intended for education-related purposes take an additional three days to process.
Winner: LendingClub
LendingClub’s total turnaround to funding can be less than a week, beating out Prosper and Upstart.
Peer-to-peer vs. direct online lenders
Peer-to-peer platforms have plenty of advantages, but sometimes a direct lender might be a better fix. When you have an emergency expense, direct lenders typically have a faster turnaround time than their peer-to-peer counterparts. And since they’re not relying on investors for funding, online lenders can sometimes (though not always) be more flexible on requirements and terms.
Bottom line
The lender that’s best for you could depend on how much you need to borrow and when you need it. Upstart may pull ahead in interest rates, but if you’re in a hurry LendingClub could be a better choice. On the other hand, if you’re more concerned about fees, Prosper may be at the top of your list.
Ultimately, it’s important to compare your personal loan options thoroughly to find an option that best fits your preferences and needs.
If you check your rates with Prosper, LendingClub or Upstart, it won’t affect your credit score. When you submit a full application for a loan, the provider will then verify information by performing a hard credit pull. Hard credit pulls will show up on your credit report and could temporarily cause your credit score to drop by a few points.
Interest rates for personal loans through Prosper, LendingClub and Upstart are all fixed. The rate that you agree to will be the same rate you pay all the way through the life of the loan, making for more reliable monthly payments. You can learn more about fixed versus variable interest rates here.
No. Accepted income can be from sources other than employment, including rental income, alimony, child support, trusts, pensions and retirement benefits.
Aliyyah Camp is a SEO content strategist and former publisher at Finder, specializing in consumer and business lending. Her writing and analysis has been featured in CentSai, the Dough Roller and the Chicago Tribune. She holds a BA in communication from the University of Pennsylvania.
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