Investor

  • Where can I view my Notes and their payment histories?

    To view a breakdown of your Notes and their payment histories, sign into your Prosper Account and access your Notes by selecting “See Notes Portfolio” on the “Your Investments” tab. Select the Note ID to see the Note details.

    To help you better understand the Note details, the following is a list of terms and how they apply to the Note details:

    • Active Loans: Active Loans means loans that are current in payments or delinquent less than 120 days. Loans that have paid off, charged-off or are in default are not considered active.
    • Amount Delinquent: The sum of past due amounts owed by the borrower.
    • Bankcard Utilization: The sum of the balances owed on open bankcards divided by the sum of the cards’ credit limits.
    • Co-Borrower Applications: Applications that are approved based on the credit information for both or either Co-Borrowers. To learn more about Co-Borrower Applications, please review our Prospectus and Help Center.
    • Combined Debt/Income Ratio: The sum of each borrower's monthly debt payments (accounting for any duplication), and the Prosper monthly payment (assuming this loan request originates), divided by the sum of each borrower's stated monthly income.
    • Combined Stated Monthly Income: The sum of each borrower's stated monthly income.
    • Current Delinquencies: The number of accounts of the borrower that are currently late. This includes accounts with charged-off balances.
    • Current/Open Credit Lines: The number of open or closed accounts in the borrower’s name that the borrower is paying on time, and the total number of open accounts.
    • Debt/Income Ratio: The sum of the borrower’s monthly debt payments, and the Prosper monthly payment (assuming this loan request originates), divided by the borrower’s stated monthly income.
    • Delinquencies in Last ~7y: The number of times the borrower has been more than 90 days late with a payment in the last 83 months.
    • Effective Yield: Effective Yield is equal to the borrower interest rate: (i) minus the servicing fee rate, (ii) minus estimated uncollected interest on charge-offs, (iii) plus estimated collected late fees, (iv) plus estimated post charge-off principal recovery.
    • Estimated Loss: Estimated loss is the estimated principal loss on charge-offs.
    • Estimated Return: Estimated Return is a measure of potential returns on invested principal, and is equal to Effective Yield minus Estimated Loss.
    • First Credit Line: The date when the oldest account on the borrower’s credit record was opened.
    • Has Mortgage: An indication whether the borrower has an outstanding mortgage on their credit report.
    • Historical Return: Historical Return is an annualized measure of return on principal received from loans originated through Prosper. It is based on actual payments (other than principal) received by the investor net of fees and losses.
    • Initial Status: The initial status represents if a listing started in a whole or fractional status. When loans are initially listed, some are available for purchase in $25 increments and some are available to purchase as whole loans.
    • Inquiries Last 6 Months: The number of times a bank or other business has requested the borrower’s credit profile from a consumer credit rating agency, excluding certain duplicate inquiries, as defined by the credit bureau.
    • Investor Servicing Fee: Prosper’s annual loan servicing fee, subtracted from loan payments to the investor. Calculated as: the annual servicing fee divided by 365 multiplied by # days since last payment, then multiplied by the outstanding principal.
    • Loan Modification Programs: In certain cases, Prosper will enter into payment plans with eligible borrowers experiencing short-term hardship. These Loan Modification Programs are focused on maximizing investor return by helping borrowers to bring their loans back to current status and repay their loans to fullest extent possible. Loan modifications may include reductions in monthly payment amounts and extensions of loan maturity dates. If Prosper modifies the material terms of a borrower loan, the updated terms will be available on the Note performance page in your investor account.
    • Monthly Payment: The monthly payment made by the borrower.
    • Prosper Rating: A proprietary rating developed by Prosper allowing you to analyze a listing’s level of risk.
    • Prosper Score: A custom risk score built using historic Prosper data. The score ranges from 1-11, with 11 being the best, or lowest risk score.
    • Public Records Last 24m / 10y: The number of negative public records reported by the credit bureau for the last 24 months or up to 10 years, as applicable. Public records may include bankruptcies and liens.
    • Revolving Credit Balance: The total outstanding balance that the borrower owes on open credit cards or other revolving credit accounts.
    • Stated Income: Borrower's stated annual income range.
    • Total Credit Lines: The total number of credit lines appearing on the borrower’s credit report.
    • TU FICO Range: The range of the borrower’s credit score as provided by a consumer credit rating agency in a recent credit inquiry.
    • Verification Stage: The borrower needs to submit documentation for Prosper to verify. The further along in verification, the higher the Verification Stage and the more likely the loan will originate. The borrower can advance to a higher Verification Stage by promptly submitting requested documents.

  • What happens if a borrower makes an additional loan payment or pays off a loan early?

    Borrowers have the option to prepay all or part of the outstanding principal balance of a borrower loan in advance of the due date at any time without penalty. Partial prepayments will not change the term of the borrower loan or the monthly payment amount, but interest will cease to accrue on the prepaid portion, and an investor will not receive all of the interest payments that the investor originally expected to receive on the Note corresponding to the borrower loan.

  • What happens if a borrower is late on a payment?

    If the borrower does not satisfy their monthly payment within 15 days of the due date, the borrower will be charged a late fee. Late fees are 5% of the payment amount or $15, whichever is greater (unless state restrictions apply).

    We divide and distribute the late fees proportionately among the investors in the corresponding Notes, subject to deductions for collection fees and servicing fees.

    Collections

    If a loan is more than one day past due, we may collect on it directly or we may refer it to a third-party servicer or collection agency. Once a loan reaches 121 days past due, it is charged off.

    Investors cannot attempt their own collections efforts or attempt to contact borrowers directly.

  • What does it mean if one of my investments has "charged-off?"

    A loan is considered “charged-off” after a borrower misses 5 consecutive monthly payments. At that point, the loan is considered unlikely to be repaid.

    When a loan is charged-off:

    • The entire loan balance is due immediately—including all unpaid fees, interest, and principal. In other words, the full remaining amount of the loan is collectable as opposed to just the unpaid monthly payments.
    • No additional interest or fees will accrue on the charge-off balance.

    Charge-offs remain in collections until some action is taken to end the loan.

    Possible loan-ending activities include payment in full, discharged bankruptcy, and sale to a debt buyer. We can also end a loan with 'no value', meaning all efforts to collect on the loan, including debt sale, have been exhausted and the loan is deemed to have no value.

    Payments made by the borrower following a charge-off are considered “recoveries.” These funds pay down the loan’s balance, but the loan remains in a charged-off status. Depending on whether the loan is in Prosper collections or with a third-party charge-off collection agency, recoveries may be subject to collection fees. Once charged-off, the account will be reported as “Charged Off” until paid in full.

  • Which tax forms and statements should I expect to receive regarding my investments?

    Prosper provides a year-end investor statement to all active investors and may provide a Consolidated Form 1099 to investors and tax authorities, depending on the investor’s activity during the prior calendar year.

    Prosper also provides a monthly statement, available for download from your Prosper Account.

    If you are subject to 1099 tax reporting, your tax forms will be available on the 'My Account > History > Statements' page by January 31 of the year following the calendar year in question. Your tax forms are also sent via email to the email address associated with your Prosper account.

    If you would like to receive a paper copy of your tax forms, please contact us.

     

    1099-MISC

    You will be provided a Form 1099-MISC in each tax year that you receive $600 or more of borrower late fees, referral awards, bonuses, incentives, and the like. Income shown on Form 1099-MISC will be reported to the Internal Revenue Service and State tax authorities in the event applicable thresholds as established by them are met.

    1099-OID

    You will be provided a Form 1099-OID in each tax year that you have $10 or more in “net interest” income on Notes originated in 2009 or later. Income shown on Form 1099-OID will be reported to the Internal Revenue Service and State tax authorities in the event applicable thresholds established by them are met. Form 1099-OID details income reported on Notes that are subject to OID tax reporting.

    1099-B

    If you (a) held any Notes where the corresponding loans were charged-off; (b) received any recovery proceeds from Notes where the corresponding loans were charged-off or (c) received gross proceeds from Notes corresponding to charged-off loans that were sold to third parties, you will be provided a Form 1099-B with a detailed breakdown of this information for each Note held.

  • When will my tax documents be available?

    If you are subject to 1099 tax reporting, your tax forms will be available on the 'My Account > History > Statements' page by January 31 of the year following the calendar year in question.

  • Who can invest on Prosper?

    Retail investors must be United States permanent residents or citizens who are 18 years of age or older, with a valid Social Security number (or other Taxpayer Identification Number, if investing through a trust, estate, or corporate entity) and checking or savings account. Retail investors must reside in a state that is open to Prosper investors and may also be required to meet suitability requirements established by their state of residence. 

    Additional suitability requirements for investors in certain states:

    Individual investors who are residents of Alaska, Idaho, Missouri, Nevada, New Hampshire, Oregon, Virginia or Washington must meet one or more of the following suitability requirements: (1) have an annual gross income of at least $80,000 and a net worth (exclusive of home, home furnishings, and automobiles) of at least $80,000 or (2) have a net worth (determined with the same exclusions) of at least $280,000. In addition, no investor located in these states may purchase Notes in an amount in excess of 10% of the investor’s determined net worth, exclusive of home, home furnishings, and automobiles.

    Individual investors who are residents of California must meet one or more of the following requirements: (1) have had an annual gross income of at least $85,000 during the last tax year and have (based on a good faith belief) an annual gross income of at least $85,000 for the current tax year; (2) have a net worth of at least $200,000 (or $300,000 together with the investor’s spouse); or (3) purchase $2,500 or less in Notes. In each case, the total amount of Notes purchased by an investor who is a resident of California cannot exceed 10% of the investor’s net worth.

    For individual investors who are residents of Maine, Missouri, or Oregon, the Maine Office of Securities recommends, and each of the Office of the Missouri Secretary of State, Securities Division and the Oregon Division of Finance and Corporate Securities requires, as applicable, that an investor's aggregate investment in this offering and similar offerings by Prosper and Prosper's affiliates not exceed 10% of the investor's liquid net worth. For this purpose, "liquid net worth" is defined as that portion of net worth that consists of cash, cash equivalents and readily marketable securities.

    For purposes of these suitability requirements, an investor and his or her spouse are considered to be a single person. In addition, the following definitions apply:

    • Annual gross income means the total amount of money you earn each year, before deducting any amounts for taxes, insurance, retirement contributions, or any other payment or expenses.
    • Net worth means the total value of all your assets, minus the total value of all your liabilities. The value of an asset is equal to the price at which you could reasonably expect to sell it. In calculating net worth, an investor should only include assets that are liquid, meaning assets that consist of cash or something that could be quickly and easily converted into cash, such as a publicly-traded stock. An investor shouldn’t include any illiquid assets, such as homes, home furnishings, or cars.
    • Net investment means the principal amount of Notes purchased, minus principal payments received on the Notes.

    Please refer to the Prospectus for additional information.

     

  • What states are open to investors on Prosper?

    Prosper is currently available only to investors who reside in the following states:

    Alaska
    California
    Colorado
    Connecticut
    Delaware
    District of Columbia
    Florida
    Georgia 
    Hawaii
    Idaho
    Illinois
    Indiana
    Louisiana
    Maine
    Michigan
    Minnesota
    Mississippi
    Missouri
    Montana
    Nevada
    New Hampshire
    New York
    Oregon
    Rhode Island
    South Carolina
    South Dakota
    Utah
    Virginia
    Washington
    Wisconsin
    Wyoming

  • Do you recommend a certain starting amount?

    We do not make any recommendations; however, we have found that investors generate a more stable return when they diversify their investment over many different Notes, with each Note corresponding to the borrower loan of a different borrower.  

    Prosper’s notes are offered by Prospectus which is an official document that describes all the key information for the investments we offer. You can find our Prospectus on our website at the bottom of any page at www.prosper.com

  • What is a Note?

    To invest in a loan through Prosper, investors purchase a “Borrower Payment Dependent Note” (referred to as a Note) for each loan they choose to fund. A Note represents an investor’s funding commitment to a loan and requires Prosper to pay investors their share of payments received from borrowers.

    As an investor, you are not actually lending your money directly to borrowers but are instead purchasing Notes from Prosper. The proceeds from these Notes facilitate the purchase of borrower loans from WebBank.

  • Is my Prosper investment account a bank account?

    No, your investment account is not a bank account. We’re not a bank - we don’t take deposits, nor do we pay interest on the cash balance of your account.

    We maintain the funds retail investors use to invest through Prosper in a pooled account at Wells Fargo Bank, N.A. titled in Prosper’s name “for the benefit of” (FBO) our investors.

    Funds in this FBO account will always be maintained at an FDIC member financial institution. Investors have no direct relationship with Wells Fargo Bank, N.A. by virtue of participating on our marketplace.

  • Is my money FDIC insured?

    The cash balance of your Prosper investment account is FDIC insured by Wells Fargo Bank, N.A.

    • The FBO account that we maintain at Wells Fargo Bank, N.A. for the benefit of investors is FDIC-insured on a “pass through” basis to individual investors, subject to applicable limits.

      This means that each individual investor’s balance is protected by FDIC insurance, up to the aggregate amounts established by the FDIC. Other funds the investor has on deposit with Wells Fargo may count against the FDIC insurance limits.

    Please know that the funds lost due to borrower default or poor Note performance are not FDIC insured.

  • Are there any fees to invest through Prosper?

    While there are no fees to open an investment account, Prosper charges investors service fees for each payment received. For loans in collections, an additional collection agency fee will be assessed.

     

    Service fees

    Investors pay an annual loan servicing fee, currently set at 1% per year for each payment received from borrowers toward each Note the investor holds.

    The fee accrues daily, the same way that regular interest accrues on the corresponding loan.

    The servicing fee amount, netted out of each loan payment, is calculated by multiplying (a) the outstanding principal of the loan prior to applying the current payment, by (b) the annual loan servicing fee divided by 365, and then multiplying this amount by the number of days since the borrower’s last payment. Consider the following example to understand how servicing fees add up:

    If the outstanding principal balance on a loan is $10,000, and it’s been 30 days since the last payment, then the loan servicing fee is 1% of the outstanding principal balance divided by 365 days, multiplied by the number of days since the last payment—which, in this case, is 30.

    1% of $10,000 = $100

    $100 / 365 days = $0.2739 (which rounds up to $0.28)

    $0.28 x 30 days = $8.40

    The servicing fee for this example would be $8.40. At this point, we also assess any borrower-servicing fees due to Prosper, like a non-sufficient funds (nsf) fee.

    1. If the borrower makes a payment of $300 and there are no borrower-servicing fees, Prosper applies the $300 toward the balance due on the loan, withdraws the $8.40 investor servicing fee, and distributes the remaining $291.20 between the investors who committed funding
      .
    2. If a borrower incurred a $15 nsf fee, Prosper withdraws this amount before we apply the remaining $285 toward the balance due on the loan. Prosper then withdraws the $8.40 investor servicing fee and distributes the remaining $276.60 to investors.

    In Situation 2, it can appear that investors receive “less” if a borrower incurs a nsf fee, but that’s not the case due to how payments are allocated toward the loan balance. Borrowers are still responsible for all unpaid amounts of the loan.

     

    Collection agency fees

    When a loan is at least one day past due, we begin collection efforts through one of our third-party collection partners. Collection efforts result in agency fees, which can amount up to 40% of all recovered amounts, paid by Investors.

    If a collections agency manages to collect a $100 payment and their agency fee is 25% of the amount of a payment collected, the collection fee would be $25 and be subtracted from the full payment amount received from the borrower. The remaining $75 would be allocated to the loan.

    $100 (payment) x 25% (fee) = $25

    $100 - $25 fee = $75, applied to the loan

  • Where can I review Prosper’s financial statements?

    You can find our financial statements in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC and available at https://www.sec.gov/.

    These statements are also available on our website at: https://www.prosper.com/prospectus.

  • Does Prosper provide access to APIs for investing?

    Whether you are an individual investor, institutional investor, or a third party agent putting your knowledge to work for others, Prosper provides APIs to quickly locate, search for, bid on, and filter through loan investment options. Build a portfolio that suits your investment needs. For more information, please visit the Prosper for Developers site.

  • Do you allow institutional investors to purchase Notes?

    Yes, Prosper is happy to accommodate institutional investors. Please follow the registration process to set up your Institutional Investor account.

  • How long does Prosper hold onto my personal information after I close my investment account?

    We’re required to hold onto all account information for as long as needed to provide you services, comply with our legal obligations, resolve disputes, conduct analysis, audits, or to enforce our agreements or as otherwise permitted and/or required by law.

    To read more about how we handle your information, see our Privacy Policy.

  • How do you protect my personal information?

    We have prepared a Privacy Policy to explain how we collect, use, protect, and disclose information and data when you use Prosper’s websites, services, and mobile applications. For details, please visit our Privacy Policy page, which is accessible through “Legal” navigational link contained at the bottom of our site pages.

     

  • How do I receive my monthly payments?

    When a borrower makes a payment, we’ll deposit your pro rata portion of their payment into your Prosper account within 1-2 days.

    Since different loans have different payment due dates, most investors who hold multiple Notes will see a continuous stream of small payments added to their cash balance throughout the month. You can re-invest those funds  or transfer them to your bank account--whichever you prefer!

  • How do I invest in loans using my Prosper account?

    There are four ways to invest using our platform:

    • You can search for individual loans and manually invest by clicking “Invest Now” on any loan.

    • You can use the Auto Invest tool, which will automatically invest in loans that meet your specified criteria. You can create balanced allocations using Prosper’s risk ratings. Auto Invest also allows you to specify additional criteria for loan term, employment status, debt-to-income ratio, public record status or co-borrower status. Over time, the Auto Invest tool will build your portfolio according to the target allocations you have set.

    • You can manually create a standing Recurring Investment order, which allows you to automatically invest in loan listings that meet your specified loan listing criteria. Please note, this option is only available through our website and is not available through the Prosper Invest mobile app.

    • Developers can invest using our Investor API. For more information, please visit the Prosper for Developers

  • How does Prosper verify the identity of a borrower?

    We verify the identity of a borrower by reviewing supplied names, social security numbers, addresses, and telephone numbers against records of consumer reporting agencies and other anti-fraud and identity verification databases.

    In addition, we may ask borrowers to submit a copy of their current driver’s license, passport, or other government-issued photo identification card to confirm their identity.

    Finally, we verify each borrower's bank account information.

    If we are unable to verify the identity of a borrower, we cancel the borrower’s loan request.

  • How does Prosper verify a borrower’s income or employment?

    We verify the accuracy of all statements and information provided by borrowers and investors in connection with listings, commitments, and loans.

    To verify a borrower’s income, we will request documents such as recent paystubs, tax returns, or bank statements. To verify a borrower's employment, we may contact the borrower’s employer or use other databases.

    In some cases, we may delay investor funding of a loan to verify the information provided by a borrower.

    Loans will not originate unless we complete verification. If we are unable to verify the information needed, we will cancel the application and/or cancel any or all funding commitments made by investors.

  • Can I assign a beneficiary to my account?

    We are unable to assign beneficiaries to general investment accounts.

    However, we can assign beneficiaries to a living/revocable trust account or individual retirement account.

    Prosper Notes are described on the Prosper Prospectus, an official document detailing all the key information for the investments we offer. You can find the Prosper Prospectus on our website at the bottom of any page at www.prosper.com.

  • What is a Verification Stage?

    A Verification Stage is a three-stage indicator of the progress on the loan, based on the status of verification of the borrower’s identity, information and documentation. The further along in verification, the higher the Verification Stage rating and the more likely the loan will originate if it receives sufficient investor funding commitments.

  • Do I need to remove a security hold on my credit file to register with Prosper?

    Yes, you should remove any security holds before applying.

  • If I’m an investor, can I also apply for a loan through Prosper?

    Yes, investors can apply for loans through Prosper (depending on state eligibility). If approved, you can manage your investments and your loan using the same Prosper Account.

    In order to borrow funds, you’ll need to apply for a loan. You can access the loan application from Prosper’s home page.

  • How do I transfer funds to and from my investment account?

    You can transfer to and from your Prosper investment account in the following ways.

    ACH Transfers

    Deposits

    You can transfer funds in and out of your general investment account with an ACH transfer when signed into your online Prosper Account.

    • To protect against fraud, the initial transfer to your Prosper account can take up to 5 days to become available before you can invest. After you establish an investing account history, your account may qualify for instant transfers, [link to: When will my investment account become eligible for instant transfers?] which will allow you to invest the transferred funds immediately.

    Withdrawals

    Each month, the first withdrawal from your general investment account can be any amount you’d like, but each additional withdrawal requires a minimum of $25. There are no fees to transfer funds in or out of your Prosper account.

    • Depending on your bank, it can take 1-5 business days for a withdrawal from your Prosper account to arrive in your bank account.

    Wire Transfers

    Deposits Only

    You can transfer funds into your Prosper investment account with a wire transfer, but we do not offer wire transfers for withdrawals.

    Individual Retirement Accounts

    To transfer funds for your Prosper IRA, please contact your custodian, Millennium Trust Company, by calling (800) 258-7878 or by visiting http://www.mtrustcompany.com/.

    Can I deposit and withdraw funds by check?

    No, we do not accept or issue checks when transferring investment funds.

  • Is there a minimum investment required?

    For individual general investment accounts, the minimum amount you can invest is $25.

    For IRAs managed by our designated custodian, Millennium Trust Company, the minimum investment amount required to qualify for custodian fee reimbursement is $5,000 in year 1 and $10,000 in all subsequent years. Please note that these minimums refer to the amount invested in Prosper Notes -- cash balances will not be counted.

    We do not make any recommendations; however, we have found that investors generate a more stable return when they diversify their investment over many different Notes, with each Note corresponding to the borrower loan of a different borrower. Prosper’s Notes are offered by Prospectus which is an official document that describes all the key information for the Notes we offer. You can find our Prospectus on our website at the bottom of any page at www.prosper.com.

  • Can I schedule recurring transfers?

    Yes, you can schedule recurring transfers on a weekly or monthly basis, or you can schedule a single transfer for a specific day of the month.

  • Every time I enter my IRA information in the application and select submit, it takes me to the browse listings page, why?

    If you are experiencing this issue, it means you are signed in to your existing Prosper account. Please sign out, and then complete the application again.