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Prosper: 2024 Home Equity Review

This San Francisco-based peer-to-peer marketplace lender has a streamlined online application process and can get you funds in as little as 11 days.

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Prosper

Prosper

Highlights
Products offered
Home equity loans and HELOCs
APR
Starting at 8.67% for HE Loans, starting at 8.93% for HELOCs
Min. credit score
N/A
Contact information
Email home@prosper.com or reach HELOC support at 800-954-2172

As a peer-to-peer marketplace lender, Prosper is the first of its kind in the US. Since its founding in 2005, it has originated more than $23 billion in loans to more than 1 million people. Prosper, which is headquartered in San Francisco, offers home equity loans and home equity lines of credit, and you can receive an instant offer for your loan.

The online application process is all about speed and efficiency to get you your money as quickly as possible. Prosper offers its home equity loans in 18 states, and HELOCs in 31 states and the District of Columbia. For homeowners in these states, Prosper makes it simple to get approved for a loan for up to 95% of your home’s value for qualified borrowers. 

Prosper: At a glance

Types of loans offeredHome equity loan (HELoan)HELOC
APR rangeStarting at 8.67%Starting at 8.93%
Loan amountUp to $249,000Up to $500,000
Credit score minimumN/AN/A
Repayment termsFive to 30 years10-year draw
Average time for approval26 days26 days
Rates as of December 11, 2022

Prosper is best suited for homeowners who need speedy access to funds or a large loan amount. The online application process is streamlined and you can receive an instant offer for your loan. With Prosper, you can borrow up to 95% of your primary residence’s value and 85% of a second home.

But keep in mind that just because you can leverage the maximum value out of your home doesn’t mean you should. Only borrow what you need to cover the specific life expenses you have in mind for your home equity loan and no more, as you will accrue interest on the total amount you borrow even if you don’t end up using it. 

Pros and cons

Pros

  • Fast application process: You can get an offer in minutes to determine how much you can borrow and what your interest rate will be.

  • Fast access to funds: You can receive your home equity funds in as little as 11 days; the average length is 26 days.

  • Long repayment term: With Prosper home equity loans, you can have a repayment period of up to 30 years, which allows you to keep your monthly payments low over an extended period of time.

Cons

  • High interest rates: Prosper has relatively high interest rates starting close to 9%. Other lenders in the category offer rates for as low as 6% to 7%, which save you thousands of dollars in interest.

  • High minimum withdrawal: You must take a $50,000 disbursement when you close on your loan, and you can’t withdraw any additional funds for 90 days. After that, withdrawals must be at least $1,000, except in Texas, where the minimum draw is $4,000.

  • In-home appraisal: For HELOCs of $250,000 or more, an in-home appraisal is required, which can take longer to set up than a virtual appraisal, delaying your timeline to access your funds.

Home equity loan options

Prosper offers HELoans, and HELOCs. In some cases, Prosper will pay your loan’s closing costs.

Fees

For both its HELoans and HELOCs, Prosper charges an origination fee of up to $1,495 in some states. Although prepayment fees are common among lenders when it comes to HELOCs, with Prosper, there’s no prepayment penalty if you pay off your account in full and close your line of credit early.

How to qualify

The rate you’re offered will depend in part on your credit profile, income and debt ratios, where your home is located and whether you’ve taken out any other loans against your property. Although Prosper doesn’t disclose its credit score requirements, the higher your score, the better your chances of being approved for a loan. Lenders also typically prefer a debt-to-income ratio of 36% or less, but no higher than 43%.

Getting started

To apply for your loan, you’ll have to gather all appropriate documents. A home equity loan is simply a second mortgage on your home, so you’ll need to provide your driver’s license or other identifying documents just like you did for your first mortgage. Prosper will expect to see proof of adequate income and steady employment through such documents as your pay stubs, Form W-2s and your tax returns, in addition to documents related to your current mortgage to show you’ve been consistently making on-time payments.

Customer service

For HELoan and HELOC support, email home@prosper.com or reach a Prosper HELOC support specialist at 800-954-2172 from Monday to Friday from 10 a.m. to 7 p.m. ET (7 a.m. to 4 p.m. PT). For general inquiries you can email support@prosper. 

Alix is a former CNET Money staff writer. She also previously reported on retirement and investing for Money.com and was a staff writer at Time magazine. Her work has also appeared in various publications, such as Fortune, InStyle and Travel + Leisure, and she also worked in social media and digital production at NBC Nightly News with Lester Holt and NY1. She graduated from the Craig Newmark Graduate School of Journalism at CUNY and Villanova University. When not checking Twitter, Alix likes to hike, play tennis and watch her neighbors' dogs. Now based out of Los Angeles, Alix doesn't miss the New York City subway one bit.
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