Lending Club vs Prosper
– Today we are having a discussion in regards to Comparing The Best Personal Loans and characteristics of each of these peer to peer lenders for you the consumer or investor. Ok ready to get started?
First lets start by saying both of these peer to peer lenders are top in their game. Both offer investors a chance to fund individual loans for consumers in exchange for a steady interest rate.
We have included a Performance Chart below from Lendstats.com with data comparing Lending Club vs Prosper Loans.
On the consumer side both offer a great way to get quickly funded for a personal loan and helps avoid all the red tape you might find in applying for a typical bank loan.
On the investor side you have the ability to earn a higher than average interest rate and invest directly in multiple loan offering with a risk associated with each transaction.
So who is bigger and better when comparing Lending Club vs Prosper?
Both of these peer to peer lenders are high quality lenders and offer personal loans to consumers. It also gives investors a great opportunity to receive a good solid interest rate on their investments.
Who is larger when comparing Lending Club vs.Prosper?
Actually Lending Club is a much larger peer to peer lender compared to Prosper in regards to volume.
Lending Club has had some key advantages from the inception of the two lenders and continues to grow at a rapid pace. Product offerings due to this growth are considered more abundant.
Both lenders have improved their game and both could be compared by consumers or investors. Testing both sites out with small amounts is the best way to judge which platform you feel more comfortable with and it is all about your personal preference.
One setback for Prosper was that it got shut down by the SEC. It therefore did not reopen for business until the summer of 2009. This was an early setback that has since been overcome and Prosper has come back strong. But, it did give Lending Club an early advantage to capture more marketshare.
Is It Easier to Get Approved Via Lending Club or Prosper?
Most consumers that apply for a loan through Lending Club vs Prosper have noted that it appears it is easier to get approved by Prosper just because they will consider loans for credit scores as low as 640. It seems that LendingClub will be a bit stricter in this aspect when issuing personal loans.
There is no data behind this and is just opinion based on comments made by consumers. It seemed that the perception was that Prosper originally catered more to the subprime market and families in need where as Lending Club was tighter on their lending practices as well as having a more fixed and predictable rate structure.
Now in present day I would say both Lending Club and Prosper offer their own cool and unique aspects that the consumer will decide whose marketshare will grow through competition and customer service as well as actual results.
With both of these peer to peer companies you just have to realize as a consumer it is a great way to apply and quickly get funded for a loan if you meet the requirements.
If you are an investor you just have to understand the risk reward of offering your money up to fund some of these loans and that you may incur defaults as a part of doing business and monitoring your results in regards to your return on investment is critical.
Which States are Open to Lending Club and Prosper Investors
To start out in regards to someone wanting a loan vs someone wanting to use the platform as an investment we broke this out into two parts.
Lending Club now accepts applications from borrowers from all states besides Iowa.
Prosper can be an alternative to Lending Club.
Here are States that allow direct investment comparing Lending Club vs. Prosper.
From an investor standpoint you will find the list below of states that are allowing direct investment in either Lending Club or Prosper.
The Lending Club will get you direct investment from 28 states: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Minnesota, Missouri, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming.
Prosper has the current list set for direct investment in the following 29 states: Alaska, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maine, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New York, Oregon, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin and Wyoming.
This list can of course change over time so you can visit their sites to look for updates to your state at anytime.