When consumers seek personal loans for things like bill consolidation, auto purchases, home down payments, business ventures and home repairs, the path of traditional lenders may seem hopeless, especially for consumers with less than perfect credit. Peer-to-peer lending through companies such as Prosper allows consumers to obtain the funds they need from a collective of individual lenders. Often with lower rates and more flexible terms than a traditional bank loan.
What Is Prosper?
Prosper Marketplace is a peer-to-peer lending group that opened its doors in 2005. In fact, it was the first peer-to-peer lending group. The company’s headquarters is in California in the USA. Peer-to-peer lending is a lending process in which a network of investors joins forces to help other people with their ventures. Investors can be business persons or regular people from all walks of life. People can visit the Prosper website and connect with each other for the funds they need for any purpose. Investors and helpful individuals can sign up as investors so that they can put their money to a positive purpose. Any person who is over 18 years old can sign up for prosper if he or she meets the qualifying criteria. Prosper is a legitimate website that screens all of its applicants thoroughly.
How the Prosper Process Works
The first thing that a prospective borrower will need to know is whether or not he or she has a qualifying credit score. Persons will need to have a credit score of at least 640 points if they would like to qualify for a Prosper loan. If an applicant does not have a credit score that is higher than 640 points, the site will redirect that person to one of Proper’s partners that can assist with the loan servicing. Several options are available for persons who have poor credit scores.
The Lending Process
Applicants will have to go through the verification process before they can apply for loans on the Prosper website. Prosper will send a card to the person’s address, and that person will have to log in to the new Prosper account and enter the code to verify the address. The Prosper applicant will have to verify a bank account, as well. After the system clears the applicant, that person can proceed with the application process.
Benefits of Using Prosper
Many benefits exist using Proper’s peer-to-peer lending process. First and foremost, the interest rates for loans start at an extremely low 6.8 percent for the best customers. The highest interest rate that a person may receive is more than 35 percent. The company also avoids bombarding the borrower with hidden fees, and the online application is stress free and secure.
Applicants post their personalized loan requests, and then investors invest in the loans. When the asking period ends, the main lender will deposit the funds into the borrower’s bank account. The borrower can then spend the funds as he or she likes and start the repayment process later. The experience will help to build the borrower’s credit profile and establish trust between the applicant and the investors.