Prosper

Launched in 2006, Prosper was the first P2P platform in the US. It has since funded over $6 billion in loans and serviced over 2 million customers. Prosper only offers unsecured consumer loans and does not make SME loans.

Like Lending Club, Prosper offers 36- and 60-month loans with amounts ranging from $2,000 to $35,000. It also operates under the notary business model.

Prosper charges borrowers a “closing fee,” which ranges from 0.5% to 5%, depending on the grade. Investors are charged a 1% annual fee based on current outstanding loan principal. The minimum investment is $25.

Prosper grades borrowers through its Prosper Score. This proprietary system focuses on criteria such as debt-to-income ratio and other “soft checks” conducted by credit bureaus.

Prosper uses both the custom score and the credit reporting agency score to assign the borrower grade. Prosper bundles all non-performing loans and sells them to a third party. The affected investors then receive an amount proportional to their defaulted loan.

Lending Club and Prosper are the big players in the industry and the only services open to retail investors. The platforms covered below are available to accredited investors only.