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Key takeaways
- LendingClub may be best for debt consolidation, as there’s an option to schedule direct payments to creditors.
- Prosper could be better if you have fair credit and want to shop around in one sitting to find the best deal.
- Both share many similarities, so get prequalified and compare loan quotes to determine which features the most competitive rates and lower fees.
LendingClub and Prosper personal loans are ideal for those looking for a smaller loan and are wanting to get a joint low with a co-borrower. Both companies charge similar APR maximums, although LendingClub’s minimum APR is lower than Prosper’s.
While the two lenders boast several similarities, they come with a unique set of pros and cons and benefit borrowers in different credit and financial situations.
LendingClub vs. Prosper at a glance
Both LendingClub and Prosper offer competitively priced unsecured loans. However, they offer different products that are best for borrowers in specific situations. Compare the lender details below to help you make the most informed decision before applying.
| LendingClub | Prosper | |
|---|---|---|
| Bankrate Score | 4.7 | 4.5 |
| Better for | Borrowers looking to consolidate | Fair credit borrowers seeking a joint loan |
| Loan amounts | $1,000–$40,000 | $2,000–$50,000 |
| APRs | 8.91%-35.99% | 8.99%-35.99% |
| Loan term lengths | 24–60 months | 24–60 months |
| Fees | Origination fee of 3%-8%, late fee | Origination fee of 1%-9.99%, $15 returned payment fee, late fee of the greater of $15 or 5%, check payment fee of the greater of $15 or 5% |
| Minimum credit score | 600 | 600 |
| Time to funding | Within three days on average | As soon as one business day |
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LendingClub originally began as a peer-to-peer lending platform but transitioned to a traditional bank and lender in 2021. Its lower credit score requirements and smaller minimum loan amount of $1,000 make it a stand-out leader. There’s also a direct payment option to help simplify the debt consolidation process.
However, its steep origination fee — ranging from 3 to 8 percent — can add significant costs to the loan and detract from its overall value.
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Pros
- Direct payment to creditors
- No prepayment penalties
- Prequalification offered
Cons
- Inflexible repayment periods
- Low maximum loan amount
- Potentially high origination fee
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Prosper operates differently than the average run-of-the-mill online lender. Rather than offering a Prosper personal loan, the peer-to-peer company is a marketplace, acting as a broker that exists to match investors with borrowers who meet the eligibility criteria.
Prosper offers joint applications, which can increase your chances of approval and scoring a more competitive rate. The company also offers prequalification, making comparing offers from multiple lenders easier.
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Pros
- Can change payment due date
- Low minimum loan amount
- Low credit score requirements
Cons
- Origination fees
- High maximum APR
- Cosigners not allowed
How to choose between LendingClub and Prosper
Both LendingClub and Prosper have unique benefits that will be advantageous to borrowers in different situations. Consider these factors to be sure you’re picking the right lender for your needs.
APR range
LendingClub wins in this category, with a slightly lower APR available to borrowers with excellent credit scores. That said, their upper limits are the same. If you have fair or poor credit you may not see much difference in terms of APR.
Minimum credit score
Both LendingClub and Prosper’s credit minimum of 600 is fairly low compared to most personal loan lenders, including fair-credit lenders. To get the best interest rate available for either, however, you’ll need to have a higher score than the minimum necessary to qualify.
Repayment terms
LendingClub and Prosper feature identical loan repayment periods, and there are no prepayment penalties. The repayment terms offered are fairly standard across the industry, though you may be able to find longer ones elsewhere.
Loan amount
You get slightly more borrowing power with Prosper. LendingClub is more ideal if you’re seeking a smaller loan amount.
Fees
LendingClub charges an origination fee and a late fee. With Prosper, however, you may be subject to four fees, including a returned payment and a check payment fee.
Bottom line: Which lender is better?
Prosper and LendingClub are strong lenders that allow for joint applicants. However, Prosper may be easier to qualify for, even with the help of a joint borrower. LendingClub, on the other hand, may be the more affordable option for those with a stellar credit score, repayment history and high annual income.
Compare more lenders before applying
If you’re having trouble deciding between these two lenders, prequalify for both to see which one offers the best rates and charges the fewest fees. It’s also worth get prequalified with other lenders to gauge if there are better loan offers available elsewhere.
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