Why did HomeAdvisor Choose Prosper over Lending Club?
Home services marketplace HomeAdvisor partnered with Prosper Loans exclusively to provide home improvement loans to its users under a multi-year contract.
Formerly known as ServiceMagic, HomeAdvisor lists service professionals, resources and tools for home improvement and maintenance and claimed to have connected 35 million home owners to service professionals and so branching out to offer loans on the platform was a logical business move. But, Prosper was not its first ally. Last year in March the Golden, Colorado-based company announced Lending Club as its exclusive lending partner, again under a multi-year agreement.
Did the deal go sour? Maybe. Is Prosper a better partner?
Home improvement loans have been a big cash cow for Prosper. As of 2014, approximately 8 percent of their borrowers said their loan was for home improvement. Orchard, in its analysis states that these loans may in part be a substitute for traditional home equity lines of credit, which used to be easier to obtain prior to the housing crash.
HomeAdvisor struck similar deals with both the lenders. Lending Club offers interest rates for fixed monthly payments starting at 3.99 percent (4.99 percent APR) and Prosper personal loans are priced between 5.99 percent to 36 percent.
“We stopped working with Lending Club solely because we started working with Prosper. We chose to work with Prosper because they’re a better fit for our business at this time,” said a Prosper spokesperson, commenting on the deal.
Are there more dots to be connected?Last modified: April 20, 2019