SoFi vs. Prosper: Which Is Right for You?

SoFi and Prosper each have a great reputation for customer service, offer fast funding, and provide flexible loan options. So, which is better?

It depends. Prosper may be a better option for fair credit borrowers and those that need to borrow less than $5,000. It considers applicants with FICO scores as low as 600, or as low as 660 if you apply through Credible. But SoFi offers larger loan amounts, a lower starting APR, and longer repayment terms. You'll also get more perks if you choose SoFi. Below, we cover lender details and which is best for different situations and credit profiles. 

SoFi personal loans

SoFi is a financial technology company and bank that offers several banking, investing, and loan products. When you take out a loan from SoFi, you get access to unique membership benefits, like free advice from a financial planner, discounts on home loans and estate plans, travel benefits, and rewards for referrals. Plus, you may be eligible for multiple rate discounts, some of which can be stacked:

• Autopay discount: 0.25% interest rate reduction for setting up autopay on your loan
• Direct deposit discount: If you have a SoFi Checking and Savings account with a minimum $1,000/month payroll direct deposit, you may receive a 0.25% interest rate reduction on your personal loan
• Direct pay: If you're paying off credit cards with the loan and have SoFi send the funds directly to creditors, you could receive a 0.25% rate discount

SoFi offers personal loans up to $100,000 with no required fees — the lender doesn't charge fees for late payments — but you may opt to pay an origination fee to get a lower interest rate. This could reduce the overall cost of the loan in some situations.

SoFi also offers fast funding as soon as the same business day if you sign your approved application before 5:30 p.m. ET on a business day. Same-day funding is not available if you're refinancing a personal loan or having funds routed directly to your creditors for debt consolidation.

Prosper personal loans

Prosper is a peer-to-peer lending platform that connects borrowers with investors. Loans are issued by WebBank, which sells the loans to Prosper. Prosper then sells the loans to investors.

More than $27 billion in loans have been issued through the platform since the company was founded in 2005. Prosper caters to borrowers who need loans for fair credit, utilizing proprietary machine learning technology to approve applicants with credit scores as low as 600. However, the minimum credit score requirement is 660 when you apply through Credible.

Prosper offers personal loans from $2,000 to $50,000 with low starting rates, but borrowers are subject to an origination fee from 1% to 9.99% in addition to late payment fees and other potential charges. You can use the funds for almost anything, including debt consolidation and business expenses — Prosper only restricts borrowers from using a personal loan for college educational expenses (like almost all lenders). The lender offers funding as soon as the next business day.

Tips on choosing between Prosper and SoFi

If you're not sure whether to apply with Prosper or SoFi, consider the factors below.

APR range and fees

SoFi offers lower rates than Prosper, and this was borne out by 12 months of Credible marketplace data. Average APRs were substantially lower on SoFi loans for borrowers with good, very good, and excellent credit. 

While both lenders charge origination fees, SoFi's is optional (you can choose to pay one to lower your APR) and lower. SoFi charges an origination fee up to 7%, whereas Prosper origination fees can be as high as 9.99%. Both lenders allow you to prequalify without hurting your credit, so it's worth comparing your individual estimated rate with each lender.

Compare: APR vs. Interest Rate on Personal Loans

Minimum credit score

SoFi doesn't disclose a minimum credit score, but fair credit borrowers may have better luck with Prosper. Prosper may accept borrowers with a FICO score as low as 600.

Loan purpose

Both SoFi and Prosper offer personal loans for a wide range of purposes, including:

• Debt consolidation
• Medical and veterinary bills
• Home improvement
• Emergency expenses
• Vacations and weddings
• Vehicle purchases

However, SoFi has more restrictions than Prosper. Neither lender allows borrowers to use the funds for college expenses, but SoFi also prohibits borrowers from using the funds for business purposes, real estate, and investments.

Repayment terms

SoFi offers longer repayment terms than Prosper. With Prosper, you may have a choice of repayment terms between two and six years, while SoFi offers terms up to seven years. SoFi might be a better option if you need a lower monthly payment or you're taking out a large loan.

Loan amount

SoFi offers loans up to $100,000, so the lender may be a better option if you have a big expense like a home remodeling project (if you can qualify for a $100,000 loan). Prosper, on the other hand, has a lower minimum loan amount than SoFi, so Prosper may be a good choice if you need less than $5,000 to cover an expense.

Time to fund

If you need an emergency loan, SoFi is likely the better option. You may receive SoFi loan funds the same day if you sign your loan agreement by 5:30 p.m. ET. That said, Prosper also offers relatively quick funding, issuing funds as soon as the next business day.

How to apply for a personal loan

1. Check your credit score and determine your budget for repayment
2. Prequalify on each lender's website or through a personal loan marketplace
3. Compare the monthly payment and total interest of each loan option
4. Pick the lender and repayment term that best meet your needs
5. Authorize a hard credit check and complete the formal application
6. If approved, review the loan agreement carefully before signing
7. Receive the cash in your bank account or have it routed to your creditors

Which lender is best for you?

SoFi and Prosper are both highly-rated companies that offer personal loans with low starting rates, fast funding, and multiple repayment term options. But depending on your financial situation and how you plan to use the funds, one of these lenders may be a better fit for your needs than the other.

Best for good or very good credit: SoFi

If you have a credit score of 670 or higher, you might qualify for a much lower APR with SoFi. According to 12 months of Credible loans data, borrowers with good or very good credit received average APRs around 10 to 12 percentage points lower from SoFi (12.94% vs. 24.35% and 10.01% vs. 20.46%). For borrowers with excellent credit, average APRs from SoFi were about 7 percentage points lower (10.07% vs. 17.22%). That disparity means a SoFi loan could cost you considerably less in interest, provided you have a high credit score.

Best for fair credit: Prosper

Prosper's peer-to-peer lending model and proprietary technology mean that fair credit borrowers may have a better chance of getting approved. Prosper requires a minimum credit score of 600 and allows joint applications (you can apply with a co-borrower, which can improve your application). SoFi doesn't disclose a minimum credit score requirement, but Credible data suggests that fair-credit borrowers are unlikely to be approved with SoFi.

Best for large loans and long repayment terms: SoFi

If you need a large loan or extra time for repayment, SoFi may be the right choice. SoFi personal loans are the only option (between the two) for a loan larger than $50,000 and a repayment term longer than six years.

Best for small business expenses: Prosper

Business loans generally offer lower rates and larger loan amounts than personal loans, but it can be difficult for startups to qualify. If you need to fund a new business venture, an unsecured personal loan from Prosper may be a good option. SoFi doesn't allow borrowers to use personal loans for business expenses.

Best for small loan amounts: Prosper

If you need to borrow less than $5,000, choose Prosper. It's often best to borrow no more than what you need to keep monthly payments and debt levels low. SoFi's $5,000 minimum loan amount is relatively high compared to most personal loan lenders.

Best for extra perks and discounts: SoFi

If you qualify for both SoFi and Prosper at similar rates and need to break the tie, it's worth considering the array of member benefits, discounts, and attractive loan features that SoFi offers. From free financial planning to refinancing opportunities to referral bonuses, SoFi offers more perks for borrowers than most other online lenders.

Methodology

Credible evaluated 32 lenders across 1,184 data points to choose the best lender overall plus top picks for different borrowers and use cases. Across lenders, we collected data on customer experience and service options, minimum and maximum fixed interest rates, minimum and maximum loan amounts, funding times, loan terms, fees, discounts, third-party reviews, and more.

We assigned a score to each attribute based on how that feature compared with the same feature for every other lender in the set. Scores were weighted according to their relative importance — for instance, maximum origination fee scores received a high weight since loan cost is among the most important factors in determining loan value. Individual attribute scores were then added to determine each lender's overall star rating.

Attributes were grouped into categories; each category contributed to lender scores as follows: 

• Borrower cost (22.5%): Origination fee ranges and minimum and maximum APRs measure upfront and overall costs and lender accessibility across credit score groups.
• Flexibility (22.5%): Maximum loan terms, number of loan purposes, minimum and maximum loan amounts, and availability of joint and secured loans measure the range of options for loan size, repayment terms, and loan types.
• Eligibility and availability (22.5%): Minimum income requirements, funding speed, minimum credit score requirements, and state availability measure how easily and how quickly borrowers can access personal loans.
• Reputation (15%): Trustpilot, Better Business Bureau, and J.D. Power ratings measure customer satisfaction.
• Discounts, customer service, and account management (12.5%): Discounts for autopay and direct pay, plus availability of mobile apps and live customer support chat, measure borrower perks and ease of loan management.
• Partner lender data (5%): Data from loans closed by our partners, including average rates, loan amounts, funding time, and eligibility criteria, measure real-world performance and borrower outcomes.

Non-partner lenders were evaluated based on the same criteria but not assigned star ratings. Learn more about how Credible rates lenders by exploring our full personal loans lender rating methodology.

Read More:

• 60 Month Loans Review
• BHG Financial Personal Loans Review
• Discover Personal Loans Review
• LightStream Personal Loans Review
• Upgrade Personal Loans Review
• Upstart Personal Loans Review
• LightStream vs. SoFi Personal Loans
• What to Do if Your Loan Application Is Denied
• How To Get Approved for a Personal Loan