WalletHub, Financial Company
@WalletHub
Prosper has two debt consolidation options: personal loans and home equity lines of credit. Both options allow you to borrow money for any purpose, including paying off old debts, but there are some key differences that make each option appealing to different types of borrowers.
Using a Prosper personal loan for debt consolidation allows you to combine up to $40,000 in debts (after factoring in the origination fee). The loan is not secured by any collateral, and you may be able to get funded in 6 to 9 business days.
Using a HELOC from Prosper to consolidate debt could enable you to borrow larger amounts, depending on how valuable your house is and how much you have left on the mortgage. But the loan is secured by your house and can take weeks to get.
Prosper Debt Consolidation Loan Options Compared
| Category | Personal Loan | Home Equity Line of Credit |
| Collateral | None | Your house |
| APRs | 6.95% to 35.99% | 5.33% to 10.75% |
| Funding | Lump-sum up front | As needed during 10-year draw period |
| Additional fee | 2.41% to 5% origination fee | $75 annual fee |
| Payoff timeline | 3 - 5 years | 20-25 years (10-year draw period; 10 - 15-year repayment period for remaining balance) |
| Pre-qualification available? |
Aside from the collateral requirement, the biggest difference between the two types of Prosper debt consolidation options is how the money comes to you.
With a personal loan, you get all of the money upfront and must pay it back over 3 to 5 years.
With a HELOC, you have a certain credit limit that you’re able to borrow up to at any time during the designated draw period. But you don’t get any money until you actively choose to borrow.
You can borrow as many times as you want within Prosper’s 10-year draw period, though, as long as you never exceed the credit limit. So after you’re done consolidating your debt and paying that amount off, you could use your HELOC for other things like home improvements or medical bills.
People also ask
What credit score do you need for a Prosper personal loan?
You need a credit score of 640 or higher for a Prosper personal loan, according to the company, which means the Prosper credit score requirement is in the fair credit range. Applying with a co-applicant can also help you qualify for a Prosper personal loan if you don’t meet the credit score requirement. To put this in perspective, most other lenders' credit score requirements are similar to Prosper.
Keep in mind that just having...
read full answerWhat are Prosper's interest rates?
Prosper’s interest rates are part of their overall APR, which ranges from 6.95% to 35.99%. The interest rate is always less than the annual percentage rate because the APR also accounts for Proper’s origination fee (the fee charged to process the loan). The origination fee can range from 2.41% to 5% of the loan amount.
Essentially, your Prosper interest rate is your APR if you take away the origination fee. But it’s not as...
read full answerHow do personal loans affect your credit score?
Personal loans affect your credit score in the short-term and in the long-term. In the short-term, a personal loan may damage your score because it causes a hard credit inquiry and increases your debt load. But in the long-term, a personal loan can either help or hurt your credit, depending largely on whether or not you pay the bills on time. Ultimately, it’s up to you how much impact the personal loan will have.
How a...
read full answerDid we answer your question?