A five-year $10,000 personal loan would have an interest rate of 11.99% and a 5.00% origination fee with a 14.27% APR. You would receive $9,500 and make 36 scheduled monthly payments of $330.9. Instead, the fees are taken from the loan when it is paid out to the borrower.įor example, a three-year $10,000 personal loan would have an interest rate of 11.74% and a 5.00% origination fee for an annual percentage rate (APR) of 15.34% APR. Origination fees aren’t paid out of pocket when a borrower takes out a loan with Prosper. Generally, those origination fees are about 2.41%-5% of the amount of the loan. An origination fee is like a closing fee. If a borrower decides to pay extra on the loan or settle the loan early (pay it off in-full) before the term ends, they won’t incur any additional fees or penalties.īorrowers can expect to pay an origination fee when they initiate loan with Prosper. You’re taking a chance that the borrower will be able to afford and make payments consistently for a greater amount of time. While a note that has longer terms can generate a longer stream of income, it can also come with more risk. Notes can range from three to five years in length. If a borrower is denied, they must wait 120 days before applying again with another loan request. Loan applications are evaluated using algorithms based on information provided on the application and credit information from TransUnion. Prosper notes require that borrowers have a FICO score of at least 640 in order to be approved. Unsecured debts carry a higher risk for lenders. ![]() ![]() If a borrower defaults on a loan, there is nothing to sell in attempts to recover the loan amount. That means no assets are tied to the debt, unlike a traditional mortgage or auto loan that carry the asset as collateral. Borrowers can be approved for loans ranging between $2,000 and $40,000.
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