Key takeaways
- SoFi is a peer-to-peer lender that is best when you want to combine your banking and investing services in one place with your loan.
- Prosper is best when you want a smaller loan and can qualify for a more competitive rate.
- When choosing the best lender, consider the APR range, credit score requirements, repayment terms, loan amounts and fees.
Prosper and SoFi are both large 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. While both are popular picks, there are a few key factors to consider when weighing Prosper vs. SoFi for your personal loan.
SoFi vs. Prosper at a glance
SoFi and Prosper are solid 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.
| Sofi | Prosper | |
|---|---|---|
| Bankrate Score | 4.7 | 4.7 |
| Better for | • Students and borrowers with existing loans or investing accounts • Large loan amounts |
• Borrowers with lower credit scores • Consolidating high interest debt • Smaller loan amounts |
| Loan amounts | $5,000–$100,000 | $2,000–$50,000 |
| APRs | 8.99% to 29.49% Fixed APR | 8.99% to 35.99% Fixed APR |
| Loan term lengths | 24–84 months | 24–60 months |
| Fees | Optional fees | Origination fee: 1%-9.99% |
| Minimum credit score | No requirement | 600 |
| Requirements | • U.S. citizen, permanent resident or nonpermanent resident alien • Employed and with sufficient income, or written offer for employment to start within 90 days |
• 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 |
| Time to funding | Within a few days | As soon as same day |
| Cosigners permitted | Yes | Yes |
SoFi personal loans
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Although SoFi began as a lender focused on students, today it offers loans to a much wider group of customers. It is known for being a popular lender for people with good credit but short credit histories. You can even work with the company to handle both your banking and investing in one place. If you already have student loans from SoFi, or use it for its other services, it can make your life easier to keep all your money in one place. It also offers the option for additional fees for its loans — meaning you could opt for a lighter monthly payment if needed.
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Pros
- High loan maximum.
- Qualify with limited credit history.
- More flexible loan terms.
Cons
- Higher APR.
- More time to get funded.
- Must borrow at least $5,000.
Prosper personal loans
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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 either individuals or businesses that want to invest in personal loans. It accepts borrowers with lower credit scores 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. It also has a lower loan maximum than SoFi, making it better for borrowers looking for a smaller loan.
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Pros
- Lower loan minimum.
- Lower minimum credit score.
- Next day funding.
Cons
- Less flexible loan terms.
- Origination fees.
- Stricter requirements regarding existing debt.
How to choose between Prosper and SoFi
Both Prosper and SoFi can be a good option for personal loans but excel in different situations.
APR range
Both Prosper and SoFi have the same starting rate of 8.99 percent, but only borrowers with strong credit will benefit from that offer. Prosper has a higher maximum rate than SoFi’s, 35.99 percent compared to 24.49 percent. Borrowers with excellent credit may qualify for the lowest rate from both lenders, but SoFi may be more affordable if you have poor credit because of its lower maximum APR.
Minimum credit score
Prosper approves borrowers with lower credit scores than SoFi. If you find yourself struggling to qualify with SoFi, you may still have a chance of getting approved by Prosper. Plus, you can borrow less, which will allow you to build your credit history and secure better rates in the future.
Repayment terms
SoFi is more flexible in its terms than Prosper, offering loans that range from 24 to 84 months. In comparison, Prosper offers terms of 24 to 60 months. That means SoFi gives you more control over your monthly payment, allowing you to pick the term that is right for you.
Loan amount
If you want to borrow a smaller amount, consider Prosper — its minimum loan is just $2,000. Working with Prosper can help you avoid borrowing more than you need and paying additional interest. However, if you’re consolidating a lot of debt or trying to pay for a big expense, SoFi is willing to lend as much as $100,000, more than double Prosper’s maximum loan amount.
Fees
Here, SoFi wins out because it has optional fees for its loans. You can opt for an origination fee for a lower APR, but you aren’t required to choose it. There are also no prepayment penalties or late fees required on your loan. Prosper, on the other hand, charges an origination fee that reaches as high as 9.99 percent and may also charge late fees if you fail to make an on-time payment.
The bottom line: Which lender is better?
Both Prosper and SoFi can be good options for personal loans, but they excel in different situations. If you want to borrow a smaller amount, consider Prosper. For less fees and potentially lower rates, choose SoFi. And since both offer prequalification, you may be able to check your potential terms and choose the lender that has the better deal.
Compare more lenders before applying
While popular lenders, Prosper and SoFi are not the only lenders available today. Before choosing a lender for your personal loan, compare more lenders to ensure you find the right one for your financial needs.
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