Happen Bank (formerly LendingClub) vs Prosper

Two peer-to-peer pioneers

LendingClub and Prosper were both early US peer-to-peer lending marketplaces. They have since taken different paths. LendingClub became a bank and now operates as Happen Bank; its site calls itself "Happen Bank, formerly LendingClub", and lendingclub.com redirects there. Prosper still runs a lending marketplace, with loans issued by a partner bank. For you as a borrower, both work much like any other online lender: check your rate with a soft inquiry, review your offer and submit a full application.

Applying with someone else

Both accept joint applications. Adding a co-borrower with strong credit or income may help you qualify or change the offer you see, but both applicants are responsible for the debt. Approval is never guaranteed.

Debt consolidation

Happen Bank offers balance transfer loans that can pay your creditors directly. That is a useful feature if you are consolidating credit cards. For Prosper, check its site for current direct-pay options.

Cost

Most loans from both include an origination fee that is deducted from what you receive. Compare the APR on each offer, not just the interest rate, and check the net amount covers what you need to pay off. Both lenders publish worked cost examples on their sites, which are a useful way to see how the fee changes the amount you receive.

What the structure means for you

Happen Bank funds and holds loans as a bank and offers other banking products alongside personal loans. Its site also says the hard inquiry only appears on your credit report if and when a loan is issued. Prosper's marketplace model means investors help fund loans behind the scenes, but you deal with Prosper and its partner bank for your application, payments and servicing. If hardship support matters to you, ask each lender what payment-relief options it offers before you accept.

The bottom line

Because both use a soft inquiry for the rate check, there is little downside to checking both. Happen Bank scores higher in our methodology for its direct-pay feature, bank structure and clear eligibility rules. Prosper is a worthwhile second quote, especially if you are applying with a co-borrower.