LendingClub offers a lower starting APR and origination fees than Prosper.
Jump to insightProsper requires a 600 minimum credit score, while LendingClub has no published minimum but charges higher rates for lower scores.
Jump to insightLendingClub provides traditional business loans up to $400,000, while Prosper opens the door to financing options up to $3 million from several lending partners.
Jump to insightLendingClub now serves institutional investors, while Prosper offers retail investors access to personal loan notes starting at $25.
Jump to insightPersonal loan comparison
Both LendingClub and Prosper offer personal loans, but their approaches differ.
- LendingClub operates as a digital marketplace bank, offering loan amounts starting from $1,000.
- Prosper functions as a peer-to-peer lending platform where individual investors fund your loan. Minimum loan amounts begin at $2,000.
LendingClub’s annual percentage rate (APR) spans from 5.96% to 35.99%, while Prosper’s rates range from 8.99% to 35.99%. This means LendingClub potentially offers lower rates for borrowers with excellent credit. The two lenders determine your rate based on factors such as credit score, income and loan amount.
How LendingClub and Prosper’s loan terms and fees compare
| Feature | LendingClub | Prosper |
|---|---|---|
| Loan amounts | $1,000 to $60,000 | $2,000 to $50,000 |
| Loan terms | 24 to 72 months | 23 or 60 months |
| APR Range | 5.96% to 35.99% | 8.99% to 35.99% |
| Origination fees | 0% to 8% | 1% to 9.99% |
| Prepayment penalties | None | None |
Takeaway
LendingClub offers more flexibility with longer repayment terms up to six years, while Prosper caps terms at five years. However, Prosper’s higher origination fees can drive up the total cost of your loan — especially for smaller amounts.
Eligibility requirements
LendingClub and Prosper have different standards for who qualifies for their online loans. The biggest difference comes down to credit scores and where you live.
Both lenders accept various income sources, including employment, retirement benefits, alimony and Social Security payments. Each requires standard documentation, such as pay stubs, tax returns or bank statements, to verify your financial information.
How eligibility requirements compare
| Requirement | LendingClub | Prosper |
|---|---|---|
| Credit score | No minimum published, but lower scores get higher rates | Minimum of 600 (co-applicant may help lower scores qualify) |
| Annual income | No minimum published, but must provide proof | No minimum published, but must provide proof |
| Debt-to-income ratio | Under 40% | Considered, but no published limit |
| Availability | Nationwide | All states except for Iowa and West Virginia |
| Residency status | U.S. citizens over 18 years old with a valid government-issued photo ID, Social Security number and U.S. address | U.S. residents with a U.S. bank account and a Social Security number |
Takeaway
LendingClub offers more flexible eligibility requirements. But Prosper has a clear minimum credit score requirement, which may make approval more predictable for qualifying borrowers.
Customer reviews and satisfaction
Customer satisfaction ratings reveal concerns with both lenders. As of publishing, LendingClub earns a 1.9-star rating on ConsumerAffairs from 411 reviews, while Prosper scores even lower at 1.2 stars from 78 reviews.
What LendingClub reviews say
LendingClub customers frequently praise the platform’s user-friendly application process and website design. However, many also complain about communication issues and payment processing errors.
Ester in South Carolina gave five stars, saying: “The application process was simple, and I was able to easily upload all the necessary documents without hassle. The website is also well-designed and easy to navigate, making it a breeze to track my loan status and make payments.”
But Celeste in Nevada had a subpar experience. She awarded two stars, explaining: “Difficult to communicate, and when I could get through, I was told different things by different people for the same issue. And twice they made errors processing my autopay. Plus, bi-weekly payments aren't an option without jumping through hoops.”
What Prosper reviews say
Prosper’s reviews show similar patterns with customer service receiving both strong praise and harsh criticism.
Misty in Georgia gave five stars for exceptional service: “Excellent friendly staff. Very professional, start to finish. You are treated with the utmost respect … makes you feel like one of their family members.”
However, Veronica in Florida wrote a one-star review highlighting serious service breakdowns: “Prosper was great up until a few months ago. I renewed my military SCRA on my account to lower my interest rate... now Prosper is saying they are having system issues with lowering my interest rate and are charging me the higher rate, disregarding the military SCRA law.”
Pro tip
Rating differences across platforms show why reading individual reviews matters more than star ratings alone. Both lenders can deliver excellent service. But watch for potential issues with communication and payment processing when making your choice.
Business loan options
LendingClub offers dedicated business loans through partnerships, including its collaboration with Accion Opportunity Fund. These loans range from $5,000 to $250,000 for small businesses. Larger companies may qualify for SBA loans starting at $400,000. The platform also provides business lines of credit up to $300,000 for flexible cash flow management.
Rather than providing direct business financing like LendingClub, Prosper connects businesses with potential lenders through BusinessLoans.com. This marketplace approach provides access to various financing options up to $3 million from several lending partners.
The companies serve distinct business needs with varying requirements. LendingClub targets established businesses with at least 12 months of operation and $50,000 in annual sales. Prosper's marketplace requirements vary by lender. But you can use Prosper's personal loans (up to $50,000) for business purposes based on personal creditworthiness.
How the business financing options compare
| Feature | LendingClub | Prosper |
|---|---|---|
| Loan type | Traditional business loans and lines of credit | Marketplace connecting to multiple lenders |
| Loan amounts | $5,000 to $300,000 | Up to $3,000,000 |
| Terms | 1 to 3 years | Varies by lending partner |
| Interest rates | Not disclosed | Varies by lending partner |
| Business eligibility requirements | 12+ months in business, $50,000+ annual sales, based in the U.S., at least 20% ownership | Varies by lending partner (determined during application) |
Takeaway
LendingClub offers direct business financing for established companies, while Prosper's marketplace approach provides access to different lenders with potentially higher loan amounts. Specific terms and requirements through Prosper depend on which lending partner you're matched with during the application.
Investment opportunities
LendingClub and Prosper have evolved to serve completely different investor audiences. LendingClub now operates as a regulated digital marketplace bank focused on institutional clients, such as banks and asset managers. Prosper maintains its peer-to-peer lending platform for retail investors.
Both platforms face borrower default risks, but the impact varies.
Prosper allows individual investors to buy “notes” representing loan portions starting at $25 per investment. The platform handles all loan servicing and provides tools such as Auto Invest for automated portfolio building. LendingClub, in contrast, offers institutional products including securities and whole loan portfolios.
Prosper's investors absorb losses when borrowers default on unsecured loans, with no FDIC protection on poor note performance. LendingClub's institutional structure and regulatory oversight may provide different risk management approaches, though specific protections aren't publicly detailed.
How the investment benefits and risks compare
| LendingClub | Prosper | |
|---|---|---|
| Benefits | Office of the Comptroller of the Currency (OCC) regulation and oversight, flexible and scalable, institutional-grade products | Low $25 minimum investment, 5.5% average historical returns (as of June 2024), automated investing tools |
| Risks | Restricted to institutional investors, high minimum requirements, no retail access | Borrower can default on unsecured loans, limited liquidity |
| Best for | Banks, asset managers, credit unions | Individual retail investors |
FAQ
What are the downsides of Prosper?
Prosper requires borrowers to have a credit score of at least 600, which limits options for people with fair or poor credit. It also charges origination fees up to 9.99%. This means you’ll receive less money than you borrow, and pay interest on the full amount.
What are the fees associated with LendingClub and Prosper loans?
Both lenders charge origination fees that are deducted from your loan amount. LendingClub’s rates range from 0% to 8%, while Prosper’s rates range from 1% to 9.99%. Prosper adds extra costs, such as insufficient funds fees, that LendingClub doesn’t charge.
How quickly can I get funded with LendingClub or Prosper?
LendingClub can deliver funds within 24 hours of approval, with more than half of borrowers receiving money the same business day in early 2025. Prosper also funds loans as fast as one business day after approval.
Are there any prepayment penalties with LendingClub or Prosper?
Neither LendingClub nor Prosper charges prepayment penalties. You can make extra payments or pay the full balance at any time without fees. This will help you save on total interest costs.
