Is there a Prosper Loans Scam? As with any new concept, questions have been raised about the validity of Prosper Loans’ business operations and how the company interacts with the people that use their services. Some people may even be concerned that Prosper Loans is a scam, designed to steal borrower’s personal information or separate naive investors from their money. Fortunately, over the years Prosper has proved itself as a legitimate company that utilizes normal business practices to provide a new service to consumers.
Prosper is a venture backed company in the peer to peer lending industry that operates out of San Francisco, California. The company was founded in 2005 by a former CEO of E-Loan named Chris Larsen and has been staffed with some of the most experienced professionals of the financial industry. Notable and prominent firms, such as Draper Fisher Juvertson, QED Investors, CompuCredit, DAG Ventures, Volition Capital, Crosslink Capital, Tomorrow Ventures, and Meritech, have contributed hundreds of millions of dollars in venture capital to the company.
“Prosper has proved itself as a legitimate company that utilizes normal business practices.”
Since the company’s founding in 2006, Prosper has issued hundreds of millions of dollars in loans to thousands of borrowers. Each month, the company logs several million dollars worth of new loans onto its books and the number of lenders and borrowers registered with the company continues to increase. Many of the reviews of Prosper created by borrowers and lenders that have used the company are detailed accounts of positive experiences and profitable outcomes.
Prosper is built on the notion that traditional banks are not needed for funding loans, allowing individual lenders to lend to individual borrowers at interest rates that are attractive to both parties. The loans obtained through the company can be written for one year, three year, or five year terms and there is no penalty to the borrower for paying off the loan earlier than expected. The interest rate for the loan is fixed for the life of the loan and is often much lower than the borrower would get with a credit card or other funding sources.
There are many reasons why borrowers and lenders prefer to use Prosper as their peer-to-peer lending company. Borrowers are able to get loans that they may not have gotten from a traditional lender and are able to consolidate expensive debt, like credit card debt, into a loan with a significantly lower interest rate. Lenders are able to earn an attractive return on their investment, often a great deal more than they would have realized with some other investment vehicles. Lenders are also able to personally choose the borrowers that they lend money to, giving lenders considerable control over where their money goes.
Borrowers that would like to obtain a loan through Prosper have to meet a few specific requirements. The borrower must be a citizen of the United States and live in a state where loans from Prosper are legal – a list of these states is available on Prosper’s website. The borrower must also have a valid social security number, an active bank account, and a credit score of 640 or more. After the company has obtained the borrower’s credit report, they may be approved for a loan of between $2,000 and $35,000. There is no Prosper Loans Scam.