Loans through Prosper are unsecured loans with a fixed interest rate. They’re paid back over a term of either three or five years, unless the borrower chooses to prepay the loan (which can be done with no penalty to the borrower). They are originated by WebBank, an FDIC-insured, Utah-chartered industrial bank.
After origination, WebBank sells and assigns the loan to Prosper. We sell the loans or payment-dependent Notes to investors. For each loan, interest accrues against the principal balance daily. Investors are entitled to a portion of the borrower’s accrued interest for all periods after the loan is purchased from WebBank.
Borrower payments are due once a month. Every time the borrower makes a payment, amounts that are payable to Note investors (such as principal, interest, and fee payments) are deducted from the borrower’s payment and deposited into each investor’s Prosper account. Learn more about how payments are allocated toward loans.
Borrowers can apply for individual loans, where only one borrower is responsible for repaying the loan, or joint loans, where both co-borrowers are equally responsible for repaying the loan.
Note that we don’t allow “co-signers” on loans through Prosper - that’s a different type of relationship than the role of a co-borrower.