SERVICING ASSET |
12 Months Ended |
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Dec. 31, 2025 | |
| Entity Information [Line Items] | |
| SERVICING ASSET | SERVICING ASSETS Prosper accounts for Servicing Assets at their estimated fair values with changes in fair values recorded in Servicing Fees, Net on the accompanying Consolidated Statement of Operations. The initial asset or liability is recognized in Gain (Loss) on the Sale of Borrower Loans on the consolidated statements of operations when the Company sells Borrower Loans to unrelated third-party buyers through the Whole Loan Channel and the servicing rights are retained. The Servicing Assets are measured at fair value throughout the servicing period. The Company recognized gains from the initial recognition of Servicing Assets on the sale of Borrower Loans in the amounts of $13.6 million, $11.0 million and $9.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. These amounts are recorded in Loss on Sale of Borrower Loans on the Consolidated Statements of Operations, and are offset primarily by incentives provided to loan buyers at the time of sale. As of December 31, 2025, Borrower Loans that were sold, but for which Prosper retained servicing rights, had a total outstanding principal balance of $3.8 billion, original terms to maturity of 24, 36, 48 or 60 months, monthly payments with fixed interest rates ranging from 5.75% to 33.00%, and various original maturity dates through December 2030. As of December 31, 2024, Borrower Loans that were sold, but for which Prosper retained servicing rights, had a total outstanding principal balance of $3.3 billion, original terms to maturity of 24, 36, 48 or 60, monthly payments with fixed interest rates ranging from 5.46% to 33.00%, and various original maturity dates through December 2029. Contractually-specified personal loan servicing fees and ancillary fees totaling $40.8 million, $32.0 million and $30.9 million are included on the consolidated statements of operations in Servicing Fees, Net for the years ended December 31, 2025, 2024 and 2023, respectively. Fair Value Valuation Method Prosper uses a discounted cash flow valuation methodology generally consisting of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounts those cash flows at a rate of return that results in the fair value amount. Significant unobservable inputs presented in the table within Note 8 below are those that Prosper considers significant to the estimated fair values of the Level 3 Servicing Assets. The following is a description of the significant unobservable inputs provided in the table. Market Servicing Rate Prosper estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. With the assistance of a valuation specialist, Prosper estimates these market servicing rates based on observable market rates for other loan types in the industry and bids from subservicing providers, adjusted for the unique loan attributes that are present in the specific loans that Prosper sells and services and information from backup service providers. In September 2025, as a result of an updated assessment of market rates, the Company lowered the estimated base market servicing rate used to value its Servicing Asset from 63.3 basis points to 59.3 basis points. This change resulted in a $1.5 million increase to Servicing Assets, Net at the date of the change in estimate, which is included in Total Net Revenues for the year ended December 31, 2025. Discount Rate The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. We use a range of discount rates for the Servicing Assets based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with Prosper’s servicing assets. Default Rate The default rate presented in Note 8 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period. Prepayment Rate The prepayment rate presented in Note 8 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which we expect to collect fees on the Borrower Loans, which is used to project future servicing revenues.
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| Prosper Funding LLC | |
| Entity Information [Line Items] | |
| SERVICING ASSET | SERVICING ASSET PFL accounts for Servicing Assets at their estimated fair values with changes in fair values recorded in Servicing Fees, Net on the consolidated statements of operations. The initial asset is recognized in Gain (Loss) on the Sale of Borrower Loans on the consolidated statements of operations when PFL sells Borrower Loans to unrelated third-party buyers through the Whole Loan Channel and the servicing rights are retained. The Servicing Assets are measured at fair value throughout the servicing period. PFL recognized gains from the initial recognition of Servicing Assets on the sale of Borrower Loans in the amounts of $13.6 million, $11.0 million and $9.2 million for the years ended December 31, 2025, 2024, and 2023, respectively. These amounts are recorded in Gain (Loss) on Sale of Borrower Loans on the consolidated statements of operations, and are offset primarily by incentives provided to loan buyers at the time of sale. At December 31, 2025, Borrower Loans that were sold, but for which PFL retained servicing rights, had a total outstanding principal balance of $3.8 billion, original terms of 24, 36, 48 or 60 months, monthly payments with fixed interest rates ranging from 5.75% to 33.00% and various original maturity dates through December 2030. As of December 31, 2024, Borrower Loans that were sold, but for which PFL retained servicing rights, had a total outstanding principal balance of $3.5 billion, original terms of either 24, 36, 48 or 60 months, monthly payments with fixed interest rates ranging from 5.46% to 33.00% and various original maturity dates through December 2029. Contractually-specified servicing fees and ancillary fees totaled $47.7 million, $39.6 million and $39.7 million for the years ended December 31, 2025, 2024, and 2023, respectively, and are included in Servicing Fees, Net on the statements of operations. Fair Value Valuation Method PFL uses a discounted cash flow valuation methodology generally consisting of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounting those cash flows at a rate of return that results in the fair value amount. Significant unobservable inputs presented in the table within Note 7 are those that PFL considers significant to the estimated fair values of the Level 3 Servicing Assets. The following is a description of the significant unobservable inputs provided in the table. Market Servicing Rate PFL estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. With the assistance of a valuation specialist, PFL estimates these market servicing rates based on observable market rates for other loan types in the industry and bids from sub-servicing providers, adjusted for the unique loan attributes that are present in the specific loans that PFL sells and services and information from backup service providers. In September 2025, as a result of an updated assessment of market rates, the Company lowered the estimated base market servicing rate used to value its Servicing Asset from 63.3 basis points to 59.3 basis points. This change resulted in a $1.5 million increase to Servicing Assets, Net at the date of the change in estimate, which is included in Total Net Revenues for the year ended December 31, 2025. Discount Rate The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. Management used a range of discount rates for the Servicing Assets based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with PFL’s Servicing Assets. Default Rate The default rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or borrower loan category. Each point on a particular borrower loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period. Prepayment Rate The prepayment rate presented in Note 7 is an annualized, average estimate considering all borrower loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or borrower loan category. Each point on a particular borrower loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which PFL expects to collect fees on the Borrower Loans, which is used to project future servicing revenues.
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