Discover is a large financial institution that offers various types of loans and credit cards. On the other hand, Prosper is a web based peer to peer lending platform that rely on individual investors to fund the loans. Since Prosper loans are funded by individual investors, the lending terms are less stricter. Prosper loans has no minimum requirement for the overall gross income but Discover loans require the borrowers to have an annual income of at least $25,000. Prosper loans have a lower credit score requirement of 640 compared to Discover which has a minimum credit score requirement of 660.

Many consumers may think that Prosper loans are cheaper and more affordable because it is web based and has lower operating cost. Discover has more than 13,000 staff which has the potential to impact the rates and fees, but ultimately it is not quite that simple. Discover loans have higher interest rates compared to Prosper loans. Most people with good credit score get charged with an interest rate of 8% at Discover but Prosper only charge an interest rate of 6.73% for people with good credit score. Discover also has more expensive late fees than Prosper p2p loans. Discover charges a late payment fee of $39 but Prosper only charges a late payment fee of $15.

The maximum loan amount that Discover offers is lower compared to Prosper. The biggest loan that Discover offer is $25,000 but Prosper allows borrowers to get funding of up to $35,000. for the p2p loan. The minimum loan amount in Discover loan is $2,500 but Prosper allows you to borrow a minimum loan amount of $2,000. Discover allows borrowers to choose a loan term in between 3 – 7 years while Prosper offers a loan term of 3 – 5 years.

Prosper does charge an origination fee which can vary from 1%-5% depending on the grade of the borrower. Both Prosper and Discover do not charge any prepayment fee so you won’t get charged with any extra fee when you want to repay your loan in full earlier than the repayment loan term. Prosper takes only 4 business days to release the loans while Discover will take 7 – 10 business days to release the loans. This means that you can get the funds from Prosper loan within the same week but it will take about 2 weeks to see the money in your bank account if you apply for a Discover loan.

In Prosper p2p lending platform, you have to make a listing on the loan amount that you need. If the loan is funded more than 70%, you can go ahead to borrow it. The listing will be active on the Prosper P2P lending platform for 2 weeks. Prosper will perform a hard credit check after the loan is funded and you have passed the verification process. For Discover loans, you can apply it by filling in the loan amount and credit score at the Discover site to get pre-approved for the loan first. After that, you must go through a telephone verification before they will approve your loan.