Prosper Student Loan Consolidation Review
Thinking about consolidation your student loans with Prosper? Here you can find all the details regarding Prosper and whether it is good for you to consolidate your student loans with Prosper.
Updated by Chinmoy Dutta on 24th February 2020
Prosper.com is a peer-to-peer lending site that offers a fantastic product. Peer-to-peer lending is an amazing development of the internet era. Peer-to-peer enables borrowers to obtain loans directly from other individuals, cutting out the financial institution as the middleman. Websites supporting peer to peer lending have increased its adoption as an alternative method of financing. P2P lending is also known as “social-lending” or “crowd-lending”.
This form of financing provides greater Return-on-Investment (RoI). Prosper eliminates the middleman such as the banks. Given the beneficial and exciting platform that Prosper provides, student loan consolidation does not seem to fit into their area of expertise.
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Consolidating Student Loans with Prosper
Prosper advertises itself as a place to go for consolidation of student loan debts. Also, student loan debts seem to be a huge burden and prosper appears to be a creative solution to their problems. It is advised to have a deep understanding of student loan consolidation and student loan refinancing and understand their difference. It seems as if the student loan borrowers are fed up with banks and private lenders and it appeals to pay interest to normal people rather than major banks and corporations
Why doesn’t Prosper make the cut?
We think that Prosper.com as of now is not equipped to handle student loans. Consolidation of student loans with prosper makes your new loan an unsecured debt, that is, it is no more a student loan. For the borrower, this is a good thing because the debt is a riskier proposition for the lender. This means the rate of interest is going to be higher. Student loans are supposed to be “low risk” investments because there is almost no bankruptcy protection.
The lowest rate of interest offered by Prosper is 6.74%. This rate seems to be interesting for credit card consolidation but for student loan consolidation, this is not applicable. Moreover, to qualify for the 6.74% rate of interest, the borrowers need to have an excellent credit score. People with such a good credit score can get consolidation for their student loans at a much lower rate of interest from other lenders. Prosper offers a maximum of $35,000 for a maximum of 5 years. Student loan borrowers looking to consolidate their student loans will likely need more money and more money to pay off.
Worried about your College Tuition? Find the best student loans suited for you.
Concluding Thoughts
People wanting to try the peer-to-peer can go for Prosper as it is a great platform for that. The platform for peer-to-peer lending is very interesting and seems to be the future of financial business. By allowing many people to come together and mitigating financial requirements amongst the group, people can expect better return-on-investment and they do not need to deal with the tantrums of the banks. In short, Prosper removes the middle-man from the transaction between the borrower and the lender and allows them to connect directly.
But one should not consolidate their student loans with Prosper. It is so because of the structure of Prosper is not equipped to handle student loan debt and its uncommon characteristics. Prosper would be a good platform for unsecured debts such as credit card debts.
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