Prosper Review: Revealing all the Pros and Cons of P2P Loans

Prosper was established to facilitate the achievement of everyone’s goals and dreams. It is a platform which is operated by specialists who clearly understand and master what it takes to achieve successful results in life. They are conscious of the fact that the cost of success is not calculated by money. Loans obtained through this platform help you to become better than yesterday. They prepare you for a better future as you reach a new frontier closer to your dreams.

Prosper is the pioneer in the P2P crediting sector. It happens to be the first to have ever implemented such a scheme of loaning in the USA. It started back in the year 2006 and has been experiencing an exponential growth till date. We can attribute the success of prosper to the fact that it provides her customers with the best services and conditions a person can imagine.

What is Prosper?

Prosper is one of the largest P2P lending platforms in the USA through which lenders and investors who want to provide loans to customers can come together. It represents a simple and transparent alternative to the traditional banking system. Prosper allows both private and institutional investors to invest at will in shares of loans. This financial organization currently offers the opportunity to invest in mortgage loans, secured car loans, unsecured loans to individuals, loans to small businesses, and receivables.

How does Prosper work?

Joining the Prosper platform offers borrowers the instant opportunity to meet with investors and lenders who are willing to buy their loans. On its website, all individuals wishing to provide investments or loans are registered and given each a codename (Nickname). Each person puts on the offer page the amount and the terms following the loan. Every potential borrower registering on the website chooses acceptable conditions. During registration, prosper checks the borrower on FICO for credit history. It is only after seeing it that lenders decide on a loan. After this, an agreement is drawn between the lender and the borrower upon the amount terms and interest for using the loan. Following the agreement, money is transferred to the bank accounts (credit cards) specified in the contract. Borrowers benefit from a speedy obtention of loans without necessarily presenting collaterals as with the traditional banking system.

Pros of working with Prosper

  • The risk of losing financial assets is minimize since a lender or investor places his/her funds among several borrowers.
  • The AIR on the loan is fixed by the investor.
  • The AIR on the loan is higher that rates on loans in banks.
  • It provides an easy access to a large base of borrowers.
  • The diversification of loans reduces the risk of losing the funds.
  • As oppose to the long-term deposit program of banks, P2P lending is made in small amounts and for a short term thereby making the profits of the investors more significant.
  • The sophisticated formalities required for a banking lending institution are absent in P2P lending platform thereby making things easier for both the borrower and the lender.

Cons of working with Prosper

  • A five-day delay in payment will send information on violation of the terms of the loan agreements to the firm.
  • Prosper closely collaborates with collection organizations that can turn into a nightmare the lives of those unable to pay in time.
  • Investors face a little risk of losing money due to the lack of collateral and insurance of loans.

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