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Prosper Debt Consolidation

Prosper has been in business for 12 years, offers consolidation loans as opposed to a consolidation service. The application process for a loan is relatively easy.

Our Score
1.6
User Score
--
Our Score
1.6
User Score
--
Rank this Company

Ratings Breakdown

Monthly Enrollment Fee

Undisclosed

Setup & Activation Fee

Undisclosed

Free Consultation

Yes

Credit Counseling

No

ISO Certified

No

Number of Reviews

0

This Review is maintained by Chase Sagum

Review Last Updated: June 26, 2019

Prosper Debt Consolidation has funded over $5 billion in personal and consolidation loans to more than 250,000 customers. Prosper offers a free consultation to potential borrowers who would like to see if Prosper’s services are a good fit for their circumstances. However, Prosper is lacking a great deal of transparency on their website. 

Rank Chart
Monthly Price
Accreditations
Review

#1

Up to $79
FCAA & ISO

#2

$10-$40
AFCC & IAPDA

#3

Up to $49
ISO

#28
prosper_review

Undisclosed
None

Pros

Free Consultation

Prosper offers an easy online application for potential clients to fill out and quickly see the cost of consolidation. Pulling a credit report or checking your rate will not affect your credit score. This easy online form can give you answers to questions you may have in minutes. Additionally, users can call to speak with a counselor for a free debt consultation. This consultation can be used to find what debt program or credit counseling, if any, will fit the needs of your circumstances.

Prosper also provides a way to earn money and become diversify your portfolio by becoming an investor. Investors have the potential to earn a return on Prosper loans by selecting individual loan applicants or using an auto invest tool. Investors are thereby essentially lenders through peer-to-peer lending. Monthly returns are deposited directly into your bank account.

Cons

Lack of Transparency

Most of the drawbacks with Prosper arise because it is a personal loan company first, and a debt consolidation company second. Interest rates (7 to 36 percent) seem to be higher than most of the competition. Prosper’s upfront and monthly fees are undisclosed, whereas most of the industry charges a flat rate between $30-$70. Those with a large amount of credit card debt will pay a high cost to work with Prosper.

No Accreditations

Finally, the company’s expertise lies in getting loans approved, rather than debt counseling. Prosper does not have any industry accreditations or certified debt counselors on staff, and it doesn’t provide any sort of ongoing credit and debt counseling as part of their programs, just cash. Accreditations show a commitment to business best practices and guarantee a certain level of quality in services rendered.

Our Recommendation

Prosper Debt Consolidation might make a great company to go to for an unsecured personal loan, but when it comes to consolidating credit card debt at a lower interest rate, it simply does not offer as much as the competition. Their up-front and monthly fees are undisclosed, their possible interest rates are high, and they lack the accreditation we look for. Their expertise and services are not geared towards reducing debt, but extending loans. We do not recommend working with Prosper Debt Consolidation for debt consolidation purposes.

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Prosper FAQ

Prosper Debt Consolidation is an online loan provider that allows customers to obtain a loan for debt consolidation, home improvement, auto, small businesses, or special occasions. Prosper Debt Consolidation does not offer any debt consolidation plans. It offers unsecured personal loans that allow customers to consolidate all of their debt into one loan. Often times when consolidating debt, customers will be able to get a lower interest rate. On the opposite financial spectrum to borrowing money, Prosper does offer customers the opportunity to invest funds in personal loans.

How much does Prosper charge?

Rates range from 6.73 percent to 35.36 percent APR. The interest rate you’re charged is based on a number of factors including, but not limited to, the following:

  • Prosper Rating, which is an indicator of expected loss rates
  • Loan term
  • Economic environment
  • Competitive environment

Late and failed payment fees are also possibilities, if borrowers aren’t able to keep their commitments. Prosper does not keep the late fees, they are passed on to the lender. A failed payment fee of $15 is charged if the borrow has a returned check, a failed bank draft, a failed automatic withdrawal, etc.

What are the company’s up-front fees?

Fees vary between 1.95-4.95 percent of the loan amount if the duration is three years. For five year loans, the cost is 4.95 percent across the board. Your percentage is based on the Prosper rating they will give you that basically shows how much you are trusted as a borrower.

How long have they been in business?

12 years. Prosper opened it’s doors in 2005 and changed their business model in 2009, when they went to fixed rates based off of their algorithms.

What services do they offer?

Unsecured debt consolidation is the main service they offer that is applicable to BestDebtCompanys.com. They do offer multiple other loan options including: home improvement loans, auto loans and more. You can find out more about them on their website.

Does Prosper have any debt consolidation accreditations> 

Prosper does not have any certified financial advisors on staff. Prosper is not ISO certified

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  • Takes your existing debt and try to settle with your creditors for a lower amount. If you pay off the settled amount, your debt will be considered paid in full.
  • Negotiates with your creditors on your behalf.
  • Fee based on a percentage of your total starting debt or a percentage of the debt they save you.
  • Most settlement companies have you create a separate "escrow" account where you will make monthly contributions over a certain amount of time to contribute to your settlement. Once there is a substantial amount of funds to show your creditors, the settlement company will try to negotiate a lower amount of debt.
  • Combines all your debts and creditors into one monthly payment.
  • Allows you to pay one monthly payment to the consolidation company, instead of multiple payments to different creditors.
  • You no longer owe your original creditors; instead you pay one monthly payment to your consolidation company.
  • Consolidation companies can help negotiate lower interest rates on your debts and help lower your total debt payment in the long run. A lower interest rate will lower the amount you owe in the end.
  • Allows you to consolidate all your different debts into one personal loan that can be paid off over time.
  • Can offer borrowers a lower interest rate with a longer payback term (compared to high-interest credit cards or medical bills). This will lower the amount of money required to pay off the loan over time.
  • Personal loan debt consolidation can be an effective way to raise your credit score quickly (within 3-6 months).
  • Borrowers can receive funds from their loan within only a few days.

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Our Score
1.6
User Score
--
Rank this Company

Ratings Breakdown

Monthly Enrollment Fee

Undisclosed

Setup & Activation Fee

Undisclosed

Free Consultation

Yes

Credit Counseling

No

ISO Certified

No

Number of Reviews

0
Our Score
9.2
User Score
9.4
Rank this Company

Ratings Breakdown

Monthly Enrollment Fee

Up to $79

Setup & Activation Fee

$0-$49

Free Consultation

Yes

Credit Counseling

Yes

ISO Certified

Yes

Number of Reviews

430