Prosper: 2022 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.

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.

Logo of Prosper against white background
Prosper

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 offered Home equity loan (HELoan) HELOC
APR range Starting at 8.67% Starting at 8.93%
Loan amount Up to $249,000 Up to $500,000
Credit score minimum N/A N/A
Repayment terms Five to 30 years 10-year draw
Average time for approval 26 days 26 days

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. 

What we like

  • 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.

What we don't like

  • 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.