Lending Club vs Prosper (Lender Comparison)
| Rates: | You have the opportunity to bid on loans posted by borrowers - the borrowers have set a maximum rate that are willing to pay. The lenders often bid down the interest rates once a loan is fully funded. |
Rates are fixed based on the borrower's credit score and not subject to an auction like Prosper. You can choose which borrowers you would like to fund. Obviously lending to someone with A credit will have less return than one with C credit, however your investment is safer lending to an A credit borrower. |
| Minimum Investment : | $50 minimum for each loan you would like to contribute to. |
$25 minimum investment for each loan you want to contribute to. |
| Interest Rate: | Range from 7.70% to 36.00% |
Range from 7.12% to 17.86% |
| Residence: | U.S. Resident at least 18 years of age and have a valid SSN |
U.S. Resident at least 18 years of age and have a valid SSN |
Signup as Prosper Lender Get $25 Free for joining |
Signup as LendingClub Lender Get $25 Free for joining |
As you can see there are pros and cons to each of the programs listed above. While it is always nice to know what kind of return to expect (like you will with LendingClub), sometimes being able to bid on loans through Prosper can be more rewarding. Of course, the main concern that everyone should have is if they are going to get paid back or not. From our personal experience and after analyzing what other research we have done we found the average person will probably be more happy lending through LendingClub. This site has a much better record with around 98% of the $8,000,000+ in loans they have outstanding currently being paid on time. This should make investors feel comfortable to invest through LendingClub. Unfortunately we can not say the same about Prosper and feel it is often better for borrowers.