Prosper Review 2021 • Benzinga

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Prosper is undoubtedly a great platform that provides borrowers with various loan types and amounts, while minimal credit history is required and no minimum income set. However, the main downside to investors is that most loans on the platform aren’t collateralized and if a loan goes into default, Prosper charges collection fees upward of 40%.

Debt Consolidation: The debt consolidation loan helps borrowers combine and pay off credit card balances with 1 loan.

Home Equity Line of Credit: A “HELOC” is a loan whereby the lender agrees to lend money, with the collateral being the borrower’s equity in their house. 

Home Improvement Loans: Borrowers can also use Prosper for home improvement loans. For example, a loan might go to purchase new furniture, upgrade doors and windows or hire a contractor.

Auto & Vehicle Loans: As well as new cars, Prosper can offer loans for older vehicles. It also provides the option of refinancing an existing auto loan.

Small Business Loans: Prosper offers loans listed as small business loans, but they are personal loans based on your individual credit score. 

Baby and Adoption Loans: The company allows you to apply for unsecured loans for baby expenses up to $40,000, meaning you don’t need to be a homeowner. 

Other Personal Loan Types: You can also use your personal loan for healthcare costs, engagement ring financing and special occasions while also providing green and military loans.

Best Alternative to Prosper

For investors looking for options to invest in loans with a low minimum investment, our top pick is definitely Groundfloor. The platform allows you to invest in loans backed by real estate with a minimum investment of only $10. Most loans on the platform have a return of 6% to 12% and there are no fees to the investor.

get started

securely through Groundfloor’s
website

Best For

non-accredited investors

1 Minute Review

Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investment. Groundfloor has great volume with more than 10 investments. 

Individuals with small portfolios will also like the low $10 minimum and 0 investor fees. However, most of the loans are given to house flippers, and there is a risk of borrowers defaulting on their loans. 

Best For

  • Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
  • Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
  • Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.
Pros
  • Charges the lowest minimums in the industry
  • 0 investor fees
  • Open to non-accredited investors
Cons
  • Offers no bankruptcy protection
  • High rate of an uncured default
  • Many loans are for judicial-only states

Investing in Personal or Business Loans

Investors can build a portfolio on Prosper by investing in loans. Each loan is assigned a rating from AA to HR. 

AA loans are considered lower risk, lower reward loans, while on the other end of the spectrum, an HR rating means the loan is regarded as a higher risk, higher reward. Each rating also has an estimated average annual loss rate, which you can see below. 

Comparison of loss rates on Prosper marketplace

Source: Prosper.com

The minimum amount needed to begin investing on Prosper is $25. Average historical returns on Prosper are 5.5%.

Should you need to get in touch with Prosper, you can contact them in several ways, such as by email ([email protected]), phone or sending a letter to the address provided. It posts a specific email address provided to report security issues ([email protected]). 

Although 1 of the downsides to Prosper’s customer service offerings is that it does not provide a live chat function, all in all, its customer service is positive, with everything dealt with in a professional and friendly manner. 

The rates you pay as a borrower will, of course, vary depending on your credit history, the amount you wish to borrow and the term length you choose (3 or 5 years). Prosper charges no prepayment penalties, meaning you can pay off the loans as quickly as you are able to.

The payment process is very straightforward, with various options to choose from. For example, you can set up AutoPay, a service that automatically schedules and deducts the monthly payments from your bank account. Additionally, you can pay online, via telephone, personal check, money order or cashier’s check.

As mentioned previously, Prosper charges fees for failed payments ($15) and late payments. Late fees are 5% of the payment amount or $15, whichever is greater. 

As an investor, you pay an annual loan servicing fee set at 1% per year for each payment received from borrowers towards each note you hold. 

Collection agency fees are paid if a loan is 1 day past due and Prosper has to begin collection through one of its 3rd-party collection partners. The cost can reach up to 40% of all recovered amounts and is paid by investors and taken from the amount recovered.

Overall, despite the ease of payment, Prosper’s fees mean it doesn’t receive a high mark here.

Prosper’s app is free to download and available on iOS and Android. It has a neat, clean layout and is very straightforward. The style is similar to the website. 

The app shows 3 tabs at the bottom of the screen to navigate through the options you need. However, these options change depending on whether you are an investor or borrower. 

As far as apps go, Prosper’s is designed with the customer in mind as it is effortless to use. 

Prosper allows you to invest in loans or take out a loan, but you cannot do them simultaneously. 

The sign-up form and application process as a borrower are extremely simple and, if all goes smoothly, you could receive the funds by the next day. However, Prosper may contact you for extra information in some cases, which may take a few additional days to complete. 

The investment process is also easy. Once signed up, you can search through loans based on their rating and decide whether to invest in them. 

Another benefit of the platform is the company’s user-friendly app that allows you to manage your investments and track your performance if you are an investor. In addition, a borrower can look at their credit score and view their account balance. 

Prosper users can apply for a wide range of loan amounts ranging from $2,000 to $40,000. This feature allows borrowers to access cash for various expenses such as debt consolidation, home improvements and healthcare costs. 

Overall, Prosper facilitates personal loans easier than a bank would. 

The website and app are easy to use and made without unnecessary clutter. Furthermore, the information on both the site and app is upfront, so you don’t need to scour the web for unanswered questions. 

The quick turnaround from the user’s initial application to receiving the money (if accepted) is another plus, potentially receiving the funds the next day. The precheck also makes it easier for the user when applying. 

Prosper Marketplace vs. Competitors

Compared to its competitors, Prosper’s ease of use and the navigable site certainly stands out with all the information you need is easy to find. The app is almost better than the website in that respect. 

As an investor, the advantage of using Prosper is the low minimum investment amount, which is amongst the lowest compared to its competitors. However, you can find better returns through other alternative investment platforms that have a low minimum investment, such as Groundfloor.

In addition, as a borrower, when it comes to loan amounts, the company offers more options than most, ranging from $2,000 to $40,000. 

get started

securely through Groundfloor’s
website

Best For

non-accredited investors

1 Minute Review

Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investment. Groundfloor has great volume with more than 10 investments. 

Individuals with small portfolios will also like the low $10 minimum and 0 investor fees. However, most of the loans are given to house flippers, and there is a risk of borrowers defaulting on their loans. 

Best For

  • Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
  • Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
  • Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.
Pros
  • Charges the lowest minimums in the industry
  • 0 investor fees
  • Open to non-accredited investors
Cons
  • Offers no bankruptcy protection
  • High rate of an uncured default
  • Many loans are for judicial-only states

Get started

securely through Diversyfund’s
website

Best For

Low Cost Real Estate Investing

1 Minute Review

DiversyFund isn’t your average crowdfunding platform. You’ll find that the company puts a twist on the traditional everyday crowdfunding platform, beyond anything you can find online with a simple Google search. You only have to look under DiversyFund’s skin one layer to surmise that DiversyFund is a conscientious developer and sponsor and helps hedge risk through improved vetting.

DiversyFund offers a multifamily real estate investment trust, the DiversyFund Growth REIT, and its main goals are to increase cash flow and resale value. It’ll automatically give you access to multi-million dollar real estate assets.

Best For

  • Those looking for an alternative investment beyond stocks and bonds
  • Individuals who aren’t sure they want to be landlords in the traditional sense
  • Investors who aren’t accredited
Pros
  • Only need to pony up $500 to get started
  • Open to investors all over the world
  • No expensive broker fees
Cons
  • You’ll only be able to access “blind pool” investments, which means that you can’t opt out of specific properties
  • There’s only one real investment option, the DiversyFund Growth REIT

Get Started

securely through Arrived Homes’s
website

Fees

1% asset management fee

1 Minute Review

Arrived Homes is the latest player in the real estate investment industry. Differing from many of their counterparts, Arrived provides investment opportunities in the single-family homes, with a minimum investment of just $100.

1 Minute Review

Yieldstreet is an alternative investment platform that allows you to access unique, diversified and expert-reviewed investments. From real estate offerings to works of art, Yieldstreet offers investments that have low correlations with the general markets, meaning they can act as a new source of portfolio diversity.

Yieldstreet’s platform is easy to initiate and use — open an account in just a few minutes and begin browsing available investments before your account is fully verified. Due diligence information is easy to find and clearly laid out, and most investments include additional resources to learn more about the investment’s industry or category. Although the majority of investments are only open to accredited investors, anyone can invest in Yieldstreet’s Prism Fund.

Best For

  • Passive income generation
  • Accredited investors
  • New investors looking for an intuitive platform
Pros
  • Wide range of expert-reviewed alternative investments
  • Investments that are pre-funded by Yieldstreet
  • Prism Fund open to non-accredited investors
Cons
  • Majority of investments only open to accredited investors

Prosper gets a 3.5 rating due to several reasons. Firstly, applying for a loan through Prosper is straightforward. You have a broad range of loan amounts available that can be used for a wide variety of reasons and due to the well-designed site and app, all the information you need is easily accessible without much clicking around. 

As an investor, you can easily view the potential loans and their ratings while having the ability to track your account and funds via the website or app. However, the overall returns are low compared to other investment options and the fees get quite high if a loan goes into default.

The only downside to borrowing from Prosper are the loan term options and the origination and late fees. 

Prosper Marketplace Tutorial

Frequently Asked Questions

Is Prosper Marketplace legit?

Prosper is legit and provides easy access to loans by matching investors with borrowers via its platform. The company currently has an A+ rating from the Better Business Bureau, scoring over 97 out of 100 points. 

What is the minimum to invest in Prosper?

The minimum investment amount with Prosper is $25.

0 Commissions and no deposit minimums. Everyone gets smart tools for smart investing. Webull supports full extended hours trading, which includes full pre-market (4:00 AM – 9:30 AM ET) and after hours (4:00 PM – 8:00 PM ET) sessions. Webull Financial LLC is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is also a member of the SIPC, which protects (up to $500,000, which includes a $250,000 limit for cash) against the loss of cash and securities held by a customer at a financially-troubled SIPC-member brokerage firm.



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