When it comes to peer to peer lending, people are faced with a tough decision between Lending Club and Prosper. These two are among the biggest and most popular choices available. Let us take a closer look Lending Club vs. Prosper for borrowers and see what the similarities and differences are. By then, it will be easier for you to make a decision should you decide to get loans from either one of them.
Similarities
Both companies offer low interest rates. They also allow people to borrow from $2,000 to $35,000. To apply, you need to fill out an application form, include all necessary details and submit to the company for approval. Both companies also offer a chance to those with better applications the chance to get bigger loans at a much lower interest rate.
For instance, you need to show that you have good credit rating, you don’t shop around different companies for loans over the years and you don’t usually borrow large amounts of money. If you have proven that you can repay the loans and your credit rating is remarkable, then getting loans won’t be difficult for you.
Finally, both companies don’t get loans from banks. Instead, they are funded by real people. When you borrow certain amounts of money, the said amounts will be transferred from one person’s bank account to yours. When you are to repay the loans, you have to send them back to the person who lent you the money.
Differences
Though both companies are generally said to have the same low interest rates, it seems that Prosper actually has lower interest rates. The percentage may vary depending on the amount that you want to borrow. The difference is very small though. However, if you compute it based on the amount that you borrow; a 0.5% difference for instance, would mean a lot.
Another difference is the number of days in which your transactions are processed. On average, Prosper can process your documents in 4 days. It might take a bit more for Lending club as it could take about 6 days. However, this is dependent also on the completion of the requirements.
When it comes to fees, both companies collect 5% from the amount borrowed. However, it can actually go lower if you have proven that you are a good borrower or if you have good credit rating. Lending Club may drop the fees to just 1%. On the other hand, Prosper will ask for 1.95%. Therefore, if you are a good applicant, then you might as well go for Lending Club.
Finally, Prosper offers this loan to more states. There are states like Idaho or Nebraska in which Lending Club is not available.
Verdict
Both peer to peer loan companies are great if you wanted to get a quick loan at low interest rates. The system is unique. It allows people to help each other too. You would rather go for this method than apply in banks where interest rates are skyrocketing and regulations are quite strict.
However, if you are to choose between Lending Club and Prosper, the decision depends on your personal needs. For instance, if you live in a state where Lending Club is not offered, then you have no choice but to go for Prosper. If you also want to get the money immediately, then Prosper is the best choice. However, if you have a good credit rating, then you just have to go for Lending Club.
If you want to make inquiries, you can visit both companies now. You don’t necessarily have to get the loans right away. You can just fill out the basic information and let them compute how much you can possibly borrow and when you need to repay. It will be easier to make a decision when you have clearer details presented to you.
Finally, you need to note that Lending Club Vs. Prosper for borrowers are both helpful. However, they can also pull you down if you are not responsible enough. You need to know the rules and pay before the due date. Otherwise, you will be in deep trouble. You might not even be allowed to borrow from the again. Worse, since this is peer to peer, your name has already been tarnished in the eyes of the creditors.
If you've got bad credit to begin with, you can check these lenders who will lend you money anyway.