If you have ever considered taking a loan out online, you have good reason to be weary of scams out there. A number of company that offer loans online have one-sided loan agreements and others are just outright frauds. Because of the increase in popularity of the peer to peer lending industry, many looking for a loan online have begun turning to companies such as Prosper.com and Lending Club, but others wonder whether or not these companies are legitimate and whether or not there’s a lending club scam or a prosper.com scam afoot.

These two companies offer much better interest rates than what you might be able to find elsewhere online. The reason for this is because the money that Lending Club and Prosper.com get to fund your loan come from other users on their website that are hoping to make money by providing loans to borrowers like you.

These two companies don’t have a lot of the costs that a traditional bank or online financing company would have, because they aren’t actually providing you a loan. Instead, the loans are coming from other people that are hoping to make a better rate on their savings than they would from a savings account. Prosper.com and Lending Club are simply taking a transaction fee for managing the loans that lenders on the site make to you, making the economics much different than it would be if you were borrowing money from a bank. Although these two companies can offer you much better loans than what you would get from a bank on an unsecured loan, it doesn’t mean they are a scam.

Lending Club and Prosper.com are both venture-capital backed firms based out of California and have registered their investments with the U.S. Securities and Exchange Commission. Between the two companies, more than 12 million in loans are originated each month. Lending Club has 38 employees and is based out of Redwood City, CA. The current CEO is Renauld Laplance. Prosper.com is based out of San Francisco, CA and the current CEO of that company is Chris Larsen.

Lending Club.com has an A- rating from the Better Business Bureau. Prosper Marketplace has a slightly lower B- rating from the BBB.

If you’re worried about a Lending Club Scam or a Prosper.com scam, you don’t have much to worry about. Both are real companies with real CEOs which are based in California and are backed by well-known VC firms. If you plan on investing with either company, there are some investments risks to consider, but neither companies are a scam.