Lending Club vs. Prosper
Whether you are a borrower or an investor, you obviously want to make a choice that augurs well in the long haul, offering you outstanding interest rates. Both Lending Club and Prosper are best in the business and offers excellent value proposition to their members.
Lending Club holds an edge over Prosper but only in terms of volumes. The reason has nothing to do with its early entrance to the foray.
They obviously read the market well and the consumer requirements were well understood simultaneously. Prosper too hasn’t been any late in catching up and has done enormously well, restarting its operations in 2009 post its suspension by SEC earlier.
The base line doesn’t suggest an advantage in favour of one. Both the companies appear to be equal in the game. Perhaps, the question is to figure out who is the first among equals. It’s best advisable to explore your requirements at their site, compare and finally decide on the one which fits your bill.
For the borrowers, the big question remains as to where it would be easier to get approved. A small yet highly rational tip would suggest them to ensure that they are transparent enough and suitably meet the requirements as per the lending guidelines.
A presumption to severity of the policies is least desired and only cuts down on their options. Though Prosper is said to have relaxed policies but there is little data and expert files supporting the same.
Investors on the other hand, are always expected to maintain a contingency fund as the defaulters and bad debts are a part of business though they are not usually defined in their return on investment folio.
They fully need to be cautious of the potential risk nature of the model.
A simple risk mitigation practice is to ensure you diversify your funds in multiple loans across many borrowers. So even if a handful of borrowers have defaulted, you are still with a chance to make from others who promise a certain yield.
Since both the companies promote prime consumer credit, they have a strong investment style which has been time-trusted and backed up by credible banking data.
The ROI on credit card issuance has only flourished, suggests US banking history. Never in the past, was peer-to-peer lending as credible as it has been in the recent years and both Lending Club and Prosper are contributing to its success.
Talking about data transparency and information availability, both surpass each other as the loans offer high credibility tag in all verticals.
Most observers rate Lending Club website to be more precise and user friendly, fetching easy and simple information along with trouble-free usage.
Prosper website appears a little intricate for some but then, anyone visiting the website for some serious business would be extra cautious and better computer skilled. Try spending time on either of the websites or get in touch with a member and you would be able to strike that little difference.
While the offerings from Lending Club are sizeable, Prosper is equally attractive with its varied menu. The former offers more number of loans which are roughly over five times than what Prosper offers.
There are some attractive options that Prosper investors enjoy exclusively. In terms of listing and trends, Prosper is a bit proactive and helpful to visitors. The loan trends for the previous years are easily accessible to all on the website.
Lending Club, on the other hand, provides certain information on request. This leads to unavailability of the complete data to public. Prosper derives more expert opinion and free analysis, mainly owing to its ready availability to the potential borrowers and investors.
Location of your stay is also important as you have different states and regions where the Lending Club or Prosper services are available or absent.
Though both the companies cover most of the major areas but they still need to reach a good population which doesn’t have access to them. With the growing popularity, it’s almost certain that they have it in the pipeline to stretch.
Following are some of the states that do not permit loans through Lending Club: North Dakota, Nebraska, Iowa, Idaho & Maine besides others. While you enjoy a certain level of comfort being a native of these states, unfortunately, you cannot have loans via Lending Club but then, you can always go with Prosper here.
Let’s take a look at comparison in terms of direct investment for Lending Club vs. Prosper.
The Lending Club allows direct investment from 28 states: Delaware, Florida, Georgia, California, Colorado, Connecticut, Hawaii, Idaho, Illinois, Kentucky, Montana, New Hampshire, Nevada, Virginia, Washington, Wisconsin, West Virginia, New York, Rhode Island, South Carolina, South Dakota, Utah, Louisiana, Maine, Minnesota, Missouri, Mississippi and Wyoming.
Direct investment list for Prosper includes the following 29 states:District of Columbia, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maine, Minnesota, Alaska, California, Colorado, Connecticut, Delaware, Mississippi, Missouri, Montana, Nevada, New Hampshire, New York, Oregon, Washington, Wisconsin and Wyoming.
A neck to neck performance makes it seriously difficult for the investors and borrowers to make a choice. The question which needs to be answered is which one to go with. If you are a staunch data-driven entity or an individual, then it might just be a good idea to get inspired by the figures.
However, a fresh approach and knack of taking risks may well push you to go with either as both of them enjoy a great public goodwill and share an excellent rapport among the financial fraternity.
Over time, numerous surveys have been carried out wherein the investors and borrowers in different states were questioned on their end to end experience with these two excellent institutions. In almost all instances, the drafted questionnaires were comprehensive and covered all aspects.
However, making it easier or difficult for the readers here, it’s interesting to mention that none of the surveys could confidently speak & conclude on a concrete feedback in favour of one. Lending club or Prosper – it’s a well calculated risk. You take it any time of the day.