SoFi vs. Prosper: Which Personal Loan Lender Is Right For You?


Prosper and SoFi are two large personal loan online lenders. SoFi, founded in 2011, got its start as a company focused on college students. It has since expanded to offer a variety of financial services, including personal loans. Prosper started as a peer-to-peer lending site in 2005 and now offers a variety of loan products.

If you are trying to determine which one is better for your situation, compare some of their key traits.

Prosper vs. SoFi at a glance

SoFi and Prosper are both good personal lenders. However, if you’re thinking about applying for a loan you should take the time to compare them to make sure you choose the best loan for your needs.

Prosper SoFi
Bankrate Score 4.4 4.6
Better for Borrowers with lower credit scores

Consolidating high interest debt

Smaller loan amounts

Borrowers with strong credit

Large loan amounts

Loan amounts $2,000 – $40,000 $5,000 – $100,000
APRs 5.99% – 35.99% 5.74% – 21.78%
Loan term lengths 3 or 5 years 2 to 7 years
Fees Origination fee: 2.41% – 5% None
Minimum credit score 640 680
Requirements Debt-to-income ratio of no more than 50%

Stated income greater than $0

No bankruptcies filed within the last 12 months

Fewer than five credit bureau inquiries within the last six months

Minimum of three open trades reported on their credit report

US citizen, permanent resident, or non-permanent resident alien

Employed and with sufficient income, or written offer for employment to start within 90 days

Time to funding As soon as next day Within a few days
Cosigners permitted Yes Yes

Prosper personal loans

Prosper is an online peer-to-peer lending marketplace. That means that when you apply for a loan through Prosper, it will be funded by regular people who want to invest in personal loans.

Prosper allows borrowers with lower credit scores than SoFi but has more stringent requirements when it comes to the number of other loans you’ve applied for and your existing debt amounts.

One drawback of Prosper is the unavoidable origination fee, which adds to the cost of your loan.

Pros

  • Lower loan minimum
  • Lower minimum credit score
  • Next day funding

Cons

  • Less flexible loan terms
  • Origination fees
  • Lower loan maximum
  • Stricter requirements regarding existing debt

SoFi personal loans

Though SoFi began as a lender focused on students, today it offers services and loans to a much wider group of customers. You can even work with the company to handle your banking and investing if you want.

If you already have student loans from SoFi, or use it for its other services, that can be a good reason to get a personal loan from the company. It can make your life easier to keep all your money in one palace.

SoFi is also known for being a good lender for people with good, but short, credit histories. It also doesn’t charge origination fees for its loans.

Pros

  • High loan maximum
  • Qualify with limited credit history
  • More flexible loan terms
  • Lower maximum interest rate

Cons

  • Higher minimum credit score
  • More time to get funded

How to choose between Prosper and SoFi

Both Prosper and SoFi can be a good option for personal loans, but excel in different situations.

If you want to borrow a smaller amount, consider Prosper. Prosper’s minimum loan is just $2,000, which is lower than SoFi’s. Working with Prosper can help you avoid borrowing more than you need to and paying additional interest.

If you want a cheap loan, consider SoFi. SoFi wins out in that it does not charge origination fees for its loans and that it has lower interest rates than Prosper. If you can qualify for a loan through SoFi the odds are good that you’ll be able to save money compared to Prosper.

If you have a lower credit score, consider Prosper. Prosper approves borrowers with lower credit scores than SoFi. If you find yourself struggling to get a loan from SoFi, you still have a chance of getting approved by Prosper.

If you need to borrow a large amount, consider SoFi. SoFi offers loans as large as $100,000, more than double Prosper’s maximum loan amount. If you’re consolidating a lot of debt or trying to pay for a big expense, SoFi is willing to lend the large amounts required.

If you want more flexibility in the term of your loan, consider SoFi. SoFi offers terms ranging from two to seven years compared to Prosper’s binary choice of three or five years. That means that you have more flexibility to design your loan’s monthly payment with SoFi.

Bottom line

SoFi and Prosper are both strong lenders but if you can qualify for a loan with SoFi, the odds are good that SoFi will be the better choice. SoFi’s loans are cheaper and the lender is willing to lend large amounts. Where Prosper wins is with people looking for very small loans and with slightly lower credit scores than SoFi will accept.

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