See how three leading peer-to-peer lenders stack up so you can find the one that fits your needs.
Let’s face it: Borrowing money isn’t fun. But it doesn’t have to be painful. You’re already easing that process by comparing your options. Shopping around provides a broader scope of what’s available, and what you could potentially save. We’ll take you through the ins and outs of three top peer-to-peer lenders for personal loans: Prosper, LendingClub and Upstart.
An overview of Prosper, LendingClub and Upstart
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 includes a few more options in its suite of lending solutions. Outside of personal loans, you can also find auto refinancing, business loans and patient financing for physicians through LendingClub. All three providers operate online only.
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 usually partially or fully fund a loan.
First, am I eligible for a loan with Prosper, LendingClub and Upstart?
To borrow through Prosper you must have a FICO credit score of at least 640. You must also be at least 18 years old and an American citizen or a permanent US resident.
You must have good to excellent credit, be at least 18 years old and be an American citizen, a permanent US resident or on a long-term visa. You must also have a bank account in your name.
Currently, LendingClub can’t lend to residents of Iowa or West Virginia.
Just as with Prosper and LendingClub, you must be at least 18 and an American citizen, a permanent US resident or on a long-term visa. You must also have a credit score of 620, a regular source of income and a verifiable bank account in your name. Upstart is currently unable to lend to residents of West Virginia.
Which offers lower interest rates?
You’ll find rates from 6.95% to 35.99% APR with Prosper. The lender evaluates your application to categorize you into one of seven Prosper Ratings from AA to HR.
LendingClub offers APRs that range from 6.16% to 35.89%, which includes an origination fee.
With Upstart, you can expect an APR range of 8.85% to 29.99%.
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% on the high end.
Which comes with fewer fees?
While you aren’t subject to prepayment fees with Prosper, the lender does charge an origination fee of 1% to 5% of the borrowed amount. If you want to make repayments by check, there’s a $5 processing fee. And payments over 15 days late carry penalty that’s the greater of $15 or 5% of the unpaid amount. Returned and failed payments are also met with a $15 fee.
You’ll also see a loan origination fee of 1% to 6% of the loan amount and no early repayment fees with LendingClub. Their loans also come with the same late fees as Prosper, but its check processing fee is lower at $7.
Like Prosper and LendingClub, Upstart doesn’t charge early repayment fees. It also has the same late and returned payment fees as its competitors, but its grace period for late fees is only 10 days — shorter than Prosper’s and LendingClub’s 15 days. It has a higher upper end for its origination fee, ranging from 0% to 8% of the borrowed amount.
Prosper wins out by holding the lowest range for origination fees, charging no more than 5% of the loan amount.
Lucas's hard work pays offLucas’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 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.
|Starting APR||Origination Fee||Ease of application|
|Prosper||6.95%||$120–$600||Check rates without affecting credit, with decisions that typically come within a week of submitting your application.|
|LendingClub||6.16%||$120–$720||Rate checks don’t affect credit, and the entire process from application to disbursement of funds can take less than a week.|
|Upstart||8.85%||$0–$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 costs. 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 circumstances.
Which has a better reputation?
Trustpilot reports a solid average of 7.3 out of 10 for Prosper, based on 49 reviews.
Seven reviews for LendingClub on Trustpilot average to a good score of 8.1 out of 10.
With over 130 reviews, Upstart gets an excellent rating of 9.2 out of 10 on Trustpilot.
With the most reviews and the best score, Upstart easily secures the win.
How much can I borrow with each lender?
You can borrow from $2,000 to $2,000 through Prosper.
Personal loans range from $1,000 to $1,000 with LendingClub. All other products offered come with different minimums and maximums.
You can borrow anywhere from $1,000 to $1,000 with 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 allows you to check your rates within minutes. A full application includes standard personal and financial information and could require you to upload documents. Application decisions are usually made within one week.
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.
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. Note that loans intended for education-related purposes take an additional three days to process.
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 a lot of advantages, but sometimes a direct lender might be a better fix. When you have an emergency expense or just need funds fast, 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.
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 a better bet than the other two.
Ultimately, it’s important to compare your personal loan options thoroughly to find an option that best fits your preferences and needs.
See how other top lenders compare
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