There are moments when we need extra money to renovate our homes, support our studies, or pay medical bills. Or maybe you decided to get married, or you simply want to take a vacation. Or maybe some form of emergency came up all of a sudden. Well, we have good news for you as you have plenty of options to choose when looking for a personal online loan.
Upstart and Prosper are two of the leading online providers that offers personal loans that come with simple and easy applications. In this article, we will help you decide on which of the two have better benefits and also weigh in drawbacks to decide whether which is better for your need and situation.
An Overview
Upstart and Prosper are both considered as peer-to-peer lending platforms. They both offer loans that are funded by individual investors. Upstart was established in 2012 by former employees of Google. Prosper, on the other hand, has been around for longer since it entered the lending market way back in 2005. Both these lenders limit their offerings to personal loans.
Upstart
Upstart is considered as a great choice for the recent graduates who did very well while they are still in school. When examining the qualifications of the applicants for a loan, Upstart takes the academic achievements of the applicant from the last four years into consideration.
It makes Upstart the perfect choice for those applicants who recently graduated but have not built up enough credit yet. A college degree is not required to qualify for a personal loan.
Prosper
Prosper is a peer-to-peer lending company that offers personal loans that are priced competitively to an array of professionals. Different from the majority of lending firms, Prosper caters to clients and applicants who have high credit scores and income.
Not like most lenders, the goal of Prosper is to offer resources and services to those who require some kind of boost to help them gain financial freedom.
Who is Eligible for a Loan with Upstart and Prosper?
When applying for a loan, you must first learn about the basic requirements that are needed for you to qualify for the loan that you are applying for. Below is the comparison of the factors that are needed so that you can be eligible for a loan with Upstart and Prosper:
Upstart:
- Be at least 18 years of age;
- Be a citizen of the United States of America or a permanent resident of the United States who is living in a state other than Virginia;
- Have a credit score of a minimum of 620;
- Have a valid bank account in his or her name;
- Have a steady source of income.
Prosper:
- Be at least 18 years of age;
- Be a citizen of the United States of America or a permanent resident of the United States;
- Have a credit score that is slightly higher of at least 640;
- Have a valid bank account in his or her name;
- Have a steady source of income.
Looking at the comparison above, both Upstart and Prosper have almost the same requirements for eligibility. Except that Prosper requires a higher credit score as it requires a credit score of at least 640 while Upstart only requires 620. Upstart caters only the citizens and permanents residents of the U.S.A except for Virginia, while Prosper does not have that exception.
Who Offers Better Interest Rates?
The interest rates that are offered are a huge factor when deciding on where to apply for a loan. Below is a comparison on which among Upstart and Prosper offers the best interest rates:
Upstart
Personal loans that are offered by Upstart comes with fixed APRs that range from between 7.43 percent to 29.99 percent.
Upstart is considered as a non-traditional lender. It looks beyond the credit history of the applicant and considers the applicant’s education and employment history when determining the loans’ APR and credit or loan terms of the applicant.
Prosper
Loans that are offered by Prosper have APRs that range from 5.99 percent to 35.99 percent. The rate that the applicant is offered will depend on which qualification tier he or she falls under.
The highest of the seven tiers of Prosper is AA. It has an APR of 5.99 percent to 15.00 percent.
Which Has Better Loan Terms?
In terms of interest rates offered to applicants, Prosper is the better option between the two mainly because of the lowest APR offered. Prosper offers a minimum of 5.99 percent while Upstart offers a minimum of 7.43 percent.
| Upstart | Prosper |
| Upstart has a minimum loan term of three (3) years and a maximum loan term of five (5) years. | Prosper has a minimum loan term of three (3) years and a maximum loan term of five (5) years. |
Both Upstart and Prosper have the same minimum and maximum loan terms.
Which Has Lower Fees?
The fees that are required to be paid when applying for a loan is also considered as a huge factor when looking for an online lender. Below is a comparison on which among Upstart and Prosper requires the lowest fees:
| Upstart | Prosper |
| Upstart requires a loan origination fee that amounts to one (1) percent to eight (8) percent of the amount borrowed.
For those who choose to pay with a paper check, they will also be required to pay an additional fee of $10. Every late payment will have a penalty amounting to five (5) percent of the past due amount or $15, whichever is higher. Upstart does not charge a penalty for Prepayment. |
Loans that are availed with Prosper requires the borrower to pay loan origination fees amounting to one (1) percent to five (5) percent of the amount borrowed. The Prosper rating of the loan applicant will play a huge role in the amount of fee that he or she will ultimately be required to pay.
For those who choose to pay with a paper check, they will also be required to pay a slightly lower fee of $5. Every late payment will have a penalty amounting to five (5) percent of the past due amount or $15, whichever is higher. Prosper does not charge a penalty for Prepayment. |
In terms of fees that are required to be paid by the borrowers, Prosper is the better option between the two lenders since the maximum loan origination fee of Prosper is only up to five (5) percent of the amount that is borrowed as compared to the maximum of eight (8) percent of Upstart. In addition, Prosper has lower fees for check payments.
Which Has a Better Track Record and Reputation?
When looking for an online lender, the loan applicants must also consider the reputation of the lender that they wish to apply a loan with. Usually, customer ratings play a massive role in determining which of the online lenders offer the best services.
| Upstart | Prosper |
| Upstart has 139 reviews on TrustPilot. The rating of Upstart averages at 9.2 out of 10, with more than 90 percent of its users rating the services of the lender as excellent. | Prosper has only 49 reviews on TrustPilot. It has an average rating of 7.3 out of 10. It receives an excellent rating from 65 percent of its users. |
In terms of ratings from customers, Upstart has a noticeable better average as compared to Prosper which makes it a clear winner.
What is the Maximum Loanable Amount?
| Upstart | Prosper |
| Upstart offers personal loans that range between $1,000 to $50,000. | Prosper offers personal loans that range between $2,000 to $35,000. |
Upstart offers the better range of loanable amount when it comes to the minimum and maximum amounts that can be borrowed. By offering a lower minimum amount and higher maximum amount, those who are looking for smaller or larger loans than average can receive the funding that they need via Upstart.
Which Releases the Loan Faster?
| Upstart | Prosper |
| The online application of Upstart takes only a few minutes to complete. However, the process of verification and underwriting can take a few days.
Once the applicant accepts the loan contract, he or she could see the fund as fast as the next business day. |
After the preapproval of Prosper, the applicant is required to complete a detailed application and upload the documents that are required to be submitted. The said process will take approximately fifteen (15) minutes if the applicant has all the needed information on hand.
Once the applicant qualifies for the loan, the applicant will receive his or her final loan contract within seven days. The disbursal of the approved funds will come shortly after the acceptance of the contract. |
There is no noticeable difference between the two online lenders, so it is a tie between the both when it comes to the time for loan application and processing of the loan release.
Conclusion
Applicants who wish to save on fees and interest could choose Prosper as their better bet. However, they can take a look at Upstart for loans that are under $2,000 or for loans more than $35,000. Upstart has a better rating when it comes to customer satisfaction.
Ultimately, the applicant will want to compare their personal loan options before applying and signing any contract so that the applicant can make sure that he or she will be getting the best deal for him or her.
