What happens if a borrower does not repay their loan?
Borrowers who miss payments on Prosper face the same consequences as they would if they miss a payment with any form of bank credit including the reporting of late payments to the credit bureaus. Borrowers also incur late fees, which are collected by Prosper and passed onto the people that loaned the money. When a borrower’s payment is late, Prosper communicates directly with the borrower to encourage repayment. After 15 days, Prosper notifies the borrower’s friends and group leader of the late payment. After 30 days, Prosper engages a nationally-licensed collection agency, giving borrowers 90 days to bring the account to current. At more than 120 days past due, the loans are sold to a debt buyer. At that point, the borrower’s credit report is negatively impacted with a default and they are banned from borrowing on Prosper ever again. Learn about what happens to borrowers who are late with payments.
