If your loan becomes more than 120 days past due, your loan will be considered “charged-off” unless you are otherwise notified by Prosper. This does not mean your loan has been excused or forgiven. You are still obligated to make payments. When a loan is charged off, the entire balance is accelerated, meaning it is collectible in full as of the charge-off date.
Interest continues to accrue on the principal balance as usual. There are no changes to the interest rate or the way interest is accrued. Late fees are no longer assessed after charge-off.
If your loan is charged off, you will not be able to borrow through Prosper again, and your credit score may be negatively impacted.