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What's The Difference Between Prosper & Lending Club?

Prosper marketplace vs lending clubFrom -

The real draw (about peer-to-peer lending) for many people is that the loan originates from average ordinary people and not some too big to fail bank that will harass you a week after your payment was due. For many people, this is a good way to both get money and make money while helping others.

In the peer to peer lending space there are really two major players. The first is called Lending Club and the other Prosper.

Over the course of this article, I will explain how each is similar and different in their offerings and requirements.

Editor’s Note: Adam from gives a succinct and accurate description of the differences between the two P2P lending giants, Prosper and Lending Club. The article is impressive because it gives you the most important differences that weigh heavily on decision making when choosing a P2P lending format, whether you're borrowing or lending.

The article is slanted more towards informing borrowers of the best peer to peer lending company to loan from than anything else.

The Modest Money site is refreshing in the sense that they don't try to talk over your head. You get great, useable peer to peer lending info without all of the pomp and circumstance. Here are our article highlights:

  • Loans are funded by your peers, in other words, normal folks. You explain why you need the loan, give any relevant details and your peers purchase notes on your loan and you get paid when all notes are purchased. Loans that make sense get funded quickly.
  • It's important to detail your plans for the loan so that the investors feel secure in selecting your loan to lend their money. Put yourself in the lender's shoes, give them the details or risk being ignored.
  • Both companies charge 5% on closing fees, be sure to add that into your loan request so that you don't come up short.
  • If you need to borrow more than $35,000 neither P2P platform will work for you, they both lend in the range of $2,000-35,000.
  • Both lenders have fluctuating interest rates on their loans, but no matter the fluctuation rate they both keep interest rates far better than traditional bank rates.
  • Lending Club doesn't lend in as many states as Prosper does, check for loan availability in your state with each prospective lender.
  • Prosper pays out to borrowers 2 days faster from the time the loan is approved to the time it arrives in your bank account. It takes Lending Club 6 days compared to 4 days for Prosper.

Looking at the way the banks are still denying qualified lenders and making life hard for small business and debt consolidations loan seekers, it's becoming obvious that if you need a loan P2P lending may be your answer. Do your research and make educated decisions.

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Peer to Peer Lending and Private Lending Info