Prosper is a leading P2P lending platform but it might not be the best option for you. There are many Prosper alternatives that offer excellent (and different) services too. We’re going to look at the top sites like Prosper and discuss how they are better or worse than Prosper.
As the first peer to peer (P2P) platform in the US, Prosper has long been synonymous with the industry. But P2P has expanded to a point where it may no longer be the best option for you. Some issues routinely found on Prosper include:
- Unsecured loans with high default rates.
- High credit score requirements for borrowers (at least a score of 640).
- Very long terms (three to five years).
- Limited to specific states in the US only.
But fortunately for you, there are a growing number of platforms out there where you can earn the secure interest rates and low-interest debt of P2P lending without the hassle.
Prosper alternatives: the top 5 sites like Prosper
Constant: Great rates and a wide range of investment options.
Constant is a relatively new peer-to-peer (P2P) lending platform that has become popular in the United States. It is one of the best Prosper alternatives because of its unique business model. On Constant, you can invest using both fiat and cryptocurrencies and transfer funds seamlessly between the two.
All lending on Constant is backed by borrower collateral or buy-back guarantee. They also have very short terms for locking in funds. These range anywhere from their anytime-withdrawal lending pool investments to one-year terms depending on the investment you choose.
How Constant is better than Prosper
- Loans secured by collateral.
- It’s a global platform.
- Many investment options.
- 7.5% APR for both investors.
Ways Constant is worse than Prosper
- Still a new company.
- Interest rates are within a smaller range.
Funding Circle: Best for businesses and accredited investors
Funding Circle is a P2P lending site like Prosper. This Prosper alternative has been around since 2010 and has already racked up over 100,000 investors. The company focuses on finding investors for small business loans. As a Funding Circle investor, your loans will be given to established businesses that have been around for more than three years and with FICO scores above 660.
How Funding Circle is better than Prosper
- Borrowers have instant access to funds.
- Investors have additional security from lending to small businesses.
Ways Funding Circle is worse than Prosper
- Higher FICO score required for borrowers
- Not available nationwide, different features in different countries.
- Higher APR.
- Only businesses older than 3 years are eligible.
- Must be an accredited investor to sign up.
Lending Club: Best for late repayment fees
LendingClub is one of the leading Prosper alternatives and has issued more than $50 billion in loans over the years. It has over three million investors and borrowers and allows borrowers with credit scores of 600 and above to apply for loans.
How LendingClub is better than Prosper
- Better investor interest rates.
- Lower late fees for borrowers.
- Lower FICO scores required for borrowers.
- Borrowers receive funds instantly.
Ways LendingClub is worse than Prosper
- Longer repayment term.
- Higher origination fees.
- Higher buy-in price for investors.
Peerform: A new take on an old model
Peerform was established in 2010 by a group of Wall Street Executives. It is one of the sites like Prosper that has low rates for borrowers and decent returns for investors. However, the maximum loan amount here is only $25,000.
How Peerform is better than Prosper
- Low interest rates for borrowers.
- Lower FICO score requirements for borrowers.
- Stricter fraud prevention measures.
Ways Peerform is worse than Prosper
- Hard maximum loan amount of $25,000.
- Not available nationwide.
- Higher default risk from borrowers.
What you probably notice when researching most P2P platforms similar to Prosper is a lack of collateral.
It’s the P2P industry’s not-so-secret weakness.
When platforms are based solely on the internet and lend to borrowers across the country, it’s hard to secure loans with collateral.
Hopping across state lines and repossessing property during a default is easier said than done and it’s quite costly. In a worst-case scenario, investors are unlikely to see a cent. That’s why today many investors want a platform that offers fully-secured loans. As you may have noticed earlier, we do just that.
Get great rates without the risk with Constant
If risk isn’t your thing, Constant might be the best P2P lending platform for you. Among sites like Prosper, Constant stands out with its:
- Higher APR for investors: Constant has an APR of 7.5% for investments they have on the platform. The interest rate increases as the investment term increases. Prosper, on the other hand, has an average historical return of 5.1%.
- Various investment options: Unlike Prosper and other top P2P platforms, Constant allows you to invest with both fiat currencies and cryptocurrencies.
- A global platform: Constant has been able to gain significant headway in both the US and Asia because it is a global platform. We accept investors from all parts of the world
- Secured loans: Our loans are safe for investors because all lending is backed by borrower collateral or a buy-back guarantee.
If this sounds like something you are interested in, come check us out.
The top Prosper alternatives: A roundup
While Prosper may have been the first P2P platform in the US, since the financial crisis of 2008, other sites like Prosper have stepped up to improve on the model. As banks become stricter about loans and interest rates become lower, the demand for P2P is on the rise. It’s an exciting time to be looking for alternative investments and loans.