Editor’s note: Prosper allows customers who are denied a loan to reapply after 120 days. You can contact its support email account if you have any questions.

Peer-to-peer lending is growing as an alternative to loans from traditional banks, particularly for online personal loans. As a peer-to-peer lender, Prosper has some flexibility in to whom it loans money and in its terms and rates. However, its investors determine whether or not to fund the loan, which can take some time and may not always result in a fully funded loan. Nonetheless, it's an excellent choice especially for people who like the idea of not working with a traditional bank and who are able to wait for their loan to be funded.

Prosper offers online personal loans for a variety of life-improving reasons. In addition to the usual suggestions of debt consolidation, home improvement (including loans for green technologies), car purchase and special occasions, it also allows you to take out a loan to start or improve your business. Prosper also cites adoption as another reason for taking out a personal loan, which we hadn't seen elsewhere. It also offers loans to military personnel for moving, and since it's all handled online, it can be easier to work with Prosper than a traditional bank, especially if you deploy or move overseas.

The online application process is relatively easy. You begin by checking the rates and terms you qualify for and selecting the one you want. Next, you complete the application, which may include emailing specific documents to prove income, identity or credit. Some examples include W-2 forms or a copy of your driver's license.

During the verification process, your loan is given a letter grade called a Prosper Rating, which indicates the expected level of risk associated with a loan listing. Each letter grade corresponds to an estimated average annualized loss rate range. This rating helps Prosper maintain consistency in its evaluation process.

Once the rating is assigned, your loan is listed on the Prosper platform. Investors review your loan and decide if they want to help fund it. Your loan rating and the verification stage are displayed on your loan listing so investors know how much of your information Prosper has successfully verified. You are able to view your loan throughout the whole process to keep tabs on how much has been funded.

Your list stays active for a specific amount of time. If your loan is funded in that time, Prosper deposits funds directly into your checking account. If you are denied, you have the option to reapply.

Prosper received top marks for customer support. The FAQs cover most questions about the loan process. In addition, you can find charts and online calculators as well as a useful blog with articles on achieving and maintaining financial health.

If you cannot find your answer or you would like to speak to someone about the process, you can contact customer service via telephone. Our testers found Prosper's customer service to be the best of all the online lenders we reviewed. Representatives were patient and explained the process thoroughly. They did not ask us for personal information nor did they press us to apply for a loan. Some online lenders rush or avoid answering questions unless personal information (including credit rating) is given.

Support via email is not available for general inquires, but you may email the company after applying for a loan.

This online personal loan service does not offer as much flexibility with its repayment options as other institutions. If you are concerned about future economic hardship, you should check the FAQs about loan deferments or payment renegotiations, or discuss your concerns with a loan officer before applying. Otherwise, you can make payments in the usual online manner, via check or by making arrangements over the phone. If you pay by check, be sure you send the check early enough so that it does not arrive after the payment due date.

Prosper offers personal loans for a variety of needs. This company's transparent loan process lets you see exactly where you stand on funding, and it has knowledgeable representatives to assist you through the entire process. Prosper is one of the top names in peer-to-peer lending and can be an excellent choice for an online personal loan.