4 Best Peer to Peer Lending Sites in 2021

for Borrowers & Investors Alike

Peer to peer (P2P) has been brought to life by the ubiquity of internet access and platforms that take advantage of that infrastructure. The core concept is bringing people who want to invest money and those who want to borrow it together without the need for intermediaries.

It’s impossible to find the best peer to peer lending option as different platforms offer different terms for both the lenders and the borrowers, and not everyone needs the exact same thing.

Therefore, it’s worth exploring all the platforms and lenders before committing to a particular one; making a mistake can be very costly. In order to make the right decision, it’s instrumental that you do as much research as possible and focus on key features that you need.

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Top 4 Peer to Peer Lending Sites in 2021

1. LendingClub

For those who have trouble getting loans from traditional lenders, LendingClub is one of the top peer to peer lenders to consider. Not only is this an excellent peer to peer lending network, but it can also be used to reinvigorate your credit. Full Review

  • APR: 10.68%–35.89%
  • Loan Amount: $1,000–$40,000
  • Loan Term: 3–5 years

For those who have trouble getting loans from traditional lenders, LendingClub is one of the top peer to peer lenders to consider. Not only is this an excellent peer to peer lending network, but it can also be used to reinvigorate your credit. Full Review

2. Peerform

The top peer to peer lending platform, Peerform, provides a simple way out for those looking to consolidate their debt, cover their wedding expenses and start a home improvement project. Since these loans are unsecured, the borrower doesn’t have to worry about the collateral. Full Review

  • APR: 5.99%–29.99%
  • Loan Amount: $4,000–$25,000
  • Loan Term: 3–5 years

The top peer to peer lending platform, Peerform, provides a simple way out for those looking to consolidate their debt, cover their wedding expenses and start a home improvement project. Since these loans are unsecured, the borrower doesn’t have to worry about the collateral. Full Review

3. Upstart

Upstart can definitely be listed among the best peer to peer lending sites for bad credit. The most surprising thing regarding Upstart is the fact that it’s a lending platform that offers great terms to those with bad loans, even though it doesn’t specialize in bad credit loans. Full Review

  • APR: 7.98%–35.99%
  • Loan Amount: $1,000–$50,000
  • Loan Term: 3–5 years

Upstart can definitely be listed among the best peer to peer lending sites for bad credit. The most surprising thing regarding Upstart is the fact that it’s a lending platform that offers great terms to those with bad loans, even though it doesn’t specialize in bad credit loans. Full Review

4. Prosper

Prosper is probably the best peer to peer lending site for borrowers with a decent credit score. This P2P lending option also offers a chance to go for a joint loan. Other than this, it allows early credit repayment by not having a prepayment fee. Full Review

  • APR: 7.95%–35.99%
  • Loan Amount: $2,000–$40,000
  • Loan Term: 3–5 years

Prosper is probably the best peer to peer lending site for borrowers with a decent credit score. This P2P lending option also offers a chance to go for a joint loan. Other than this, it allows early credit repayment by not having a prepayment fee. Full Review

The Best Peer to Peer Lending Options in 2020

LendingClub Best for consolidating debt
Peerform Best for credit card debt consolidation
Upstart Best for borrowers with bad to fair credit
Prosper Best for good credit & high income borrowers

Detailed Reviews

LendingClub
LendingClub

BEST FOR

consolidating debt

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  • APR: 10.68%–35.89%
  • Loan Amount: $1,000–$40,000
  • Minimum Credit Score: 600+
  • Loan Term: 3–5 years
  • Origination Fee: 2%–6%
  • Type of loan: Unsecured
  • Credit Check: Soft inquiry

Anyone who has used LendingClub knows that it is one of the best peer to peer lending platforms the internet has to offer. This is not just because it offers excellent terms, but because it’s the embodiment of what the concept of P2P is all about. It provides the borrower with a quick online application and allows a fast money delivery. Alongside fixed interest rates, it provides a safe and reliable method that all of its users can turn in moments of crisis.

Loan requirements:

When it comes to the credit score requirement, it is generally stated that the number should go above 600. The thing is that the APR can be quite high for those with lower credit scores, which is why aiming for a bit higher might make this platform into one of the more favorable P2P lenders.

Other than this, in order to borrow through LendingClub, one must either be a US citizen or a permanent resident. In order to prove the latter, one should have a long-term visa. Other than this, they need to be of the legal age of 18. Lastly, a verifiable bank account needs to be listed. As we’ve mentioned in the overview, the repayment is automatic, and the money will be withdrawn from the listed account every month. This is what makes some people see it as the best peer to peer lending site.

Loan Agreement Terms

APR: The lending club APR is 10.68%–35.89%. Even for the peer-to-peer industry, this figure is relatively high, which is why having a decent credit score can make a huge difference. Even amongst top peer to peer lenders, there are those who focus on the good and those that focus on bad credit loans. LendingClub falls under the first category.

Loan Amount: The amount of money that one can borrow from LendingClub at one time is between $1,000 and $40,000. A low minimum lending amount is a massive advantage, seeing as how it encourages lenders to opt for this funding method for emergency expenses. This expands LendingClub’s client base by quite a margin.

Loan Term: Loan term of LendingClub’s loans is between 3 and 5 years, which is the universal industry standard amongst all the best P2P lending sites. Of course, early repayment is always a possibility, but a lenient loan term should never be underestimated.

Origination Fee: The origination fee goes between 2% and 6%, which is quite low even for P2P lending. Combined with the fact that LendingClub allows loans as low as $1,000, the origination fee really shouldn’t affect the total loan amount too much.

Funding Time: As far as the funding time goes, LendingClub promises the funds within as little as four business days. Some borrowers get it a bit quicker and others a bit slower. While one or business days may not seem like a long time, it can definitely be noticeable for those in desperate need of cash.

Credit Check: LendingClub performs soft credit inquiry, which doesn’t affect the prospective borrower’s credit score. Therefore, this is one of the best p2P lending sites when it comes to keeping your credit score intact.

Repayment: There is no penalty for repaying one’s loan early. Moreover, since the APR is high, repaying the loan early will allow borrowers to reduce the total amount of interest that they would have to pay if they waited to pay it off according to schedule. This is what makes LendingClub one of the best peer to peer lending for borrowers looking to improve their credit score quickly.

What We Liked and Didn’t Like about LendingClub

LendingClub is one of the most convenient options for both experienced borrowers as well as for those who are borrowing for the very first time. Due to the fact that the minimum credit score required is 600, this makes a lot of people eligible for their best P2P loan offers.

Other than this, the fees, in general, are fairly low. This allows people who are looking for some quick cash to turn to LendingClub. Sure, there’s an origination fee, which, although quite low, presents a substantial inconvenience for those who are in a particularly bad financial situation.

The fact that there’s a joint application loan option available could be quite convenient for young couples and partners in general. A joint application means that two credit files are linked together, which allows both borrowers a greater insight into another person’s financial history. In other words, this option might be the best peer to peer lending for borrowers who plan a mutual financial future.

The downside of the LendingClub P2P loan is the fact that it charges a late payment fee. Sure, there’s a 15-day grace period but there are a lot of people who don’t see this as long enough. Also, anything can happen, and LendingClub doesn’t have a hardship program or a similar mechanic for this worst-case scenario.

The thing that the majority of LendingClub’s borrowers are bothered by the most (from the perspective of user experience) is the fact that it doesn’t have a mobile app that helps one with their loan management. For such a user-friendly and user-oriented lending platform, such a lapse is simply inexplicable.

Peerform
Peerform

BEST FOR

credit card debt consolidation

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  • APR: 5.99%–29.99%
  • Loan Amount: $4,000–$25,000
  • Minimum Credit Score: 600
  • Loan Term: 3–5 years
  • Origination Fee: 1%–5%
  • Type of loan: Unsecured
  • Credit Check: Soft inquiry

When talking about the best peer to peer lending options, it’s impossible not to mention Peerform. Many borrowers decide to go for this platform because it allows people with low credit (just above 600) to get the money they need. Now, a low credit score doesn’t mean insolvent, which creates a perfect storm for adventurous investors. Namely, the platform requires a 40% debt-to-income ratio and a credit history devoid of delinquencies (at least in the past 12 months). In other words, it’s a lending platform that decides to focus on the future.

The interest rates are particularly low (significantly lower than other peer to peer lending platforms). The most qualified borrowers can get an APR that is as low as 5.99%. To this, one should also add the fact that there’s no prepayment penalty, which technically creates an opportunity for this interest payment sum to go even lower.

Loan requirements:

The first requirement that Peerform borrowers are required to fulfill is to pass the credit pull. This platform insists on a FICO score of at least 600. The number itself is quite low, but it’s a firm rule and a non-negotiable one for this P2P lending site.

Second, the applicants are required to submit their social security number and an active bank account. This would allow the lending platform to further check into their financial history. As we’ve already mentioned, there’s also an insistence on a decent debt-to-income ratio and a clean credit history in the past 12 months.

Loan Agreement Terms

APR: The APR rate is at a surprisingly low 5.99%–29.99%. This means that the borrowers who fall into the lower bracket might be looking forward to the APR that’s almost 50% less than what some other platforms offering the best peer to peer loans offer.

Loan Amount: The loan amount is between $4,000 and $25,000. For a lot of people, being unable to raise less than $4,000 at a time can be a serious problem. Truth be told, this is probably the main reason why some borrowers opt for other P2P loans despite more favorable terms of Peerform.

Loan Term: The loan term is the standard 3–5 years. For those who fall under the more favorable end of the APR margin, even the 5 years term shouldn’t cause them to pay too much in interest. Either way, this also depends on the amount of money borrowed.

Origination Fee: The origination fee is between 1% and 5%, which is more than reasonable. A low origination fee, combined with the low APR, can somewhat compensate for the inability to go for a particularly low minimum borrowing amount. So, even with this shortcoming, it still has some of the best peer to peer lending rates on the market.

Funding Time: Perhaps the biggest problem with Peerform is its funding time of 14 days. Due to the fact that Peerform offers more favorable terms than others, their screening process is a bit more thorough. This means that it takes more time. Still, for one of the best-rated peer to peer lending platforms is definitely worth the wait.

Credit Check: Peerform performs a soft credit check; however, it delves a bit deeper into this math. One’s credit score consists of five separate factors, one of which is their credit history. Peerform takes a closer interest in one’s credit history in the last 12 months. This is why the equation is a lot more complex than just looking at whether the potential borrower passes a score of 600.

Repayment: Peerform has an early credit repayment option with no additional fee. It does, however, have a late fee of either 5% of that month’s credit payment or $15 (whichever is higher).

What We Liked and Didn’t Like about Peerform

As far as the pros and cons of Peerform go, it’s more than clear that pros are prevalent. After all, this platform is on every best peer to peer lending list in 2020. For instance, it’s worth mentioning the low qualifying credit threshold. Sure, they won’t accept anyone lower than 600 but their increased interest in the recent credit history is a major opportunity for a lot of people. There is a great number of those who have just recently started to improve their credit score, so this could be this opportunity.

Moreover, Peerform offers low interest rates. The majority of their closest competitors don’t have APR below 10%, which makes a huge difference in the borrower’s monthly expenses list.

Once we add the fact that prepayment is quite easy, simple, and free, the end result is a favorable financial situation. This is also why so many reviewers see Peerform as one of the best LendingClub alternatives.

As far as the downsides go, the first thing worth mentioning is the high minimum loan amount. The thing is that $4,000 may be a bit high for those who are just looking to cover small emergency expenses. There’s also no co-signer option, which makes things even more difficult.

Also, we’ve mentioned that the origination fee is 1%–5%, which is quite reasonable. Unfortunately, this is not the only additional fee that Peerform’s lenders are exposed to. In addition to a failed payment fee, there’s also a processing fee and an unsuccessful payment fee to worry about ($15 each). For someone in a desperate financial situation, these additional expenses quickly add up.

Upstart
Upstart

BEST FOR

borrowers with bad to fair credit

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  • APR: 7.98%–35.99%
  • Loan Amount: $1,000–$50,000
  • Minimum Credit Score: 620
  • Loan Term: 3–5 years
  • Origination Fee: 0%–8%
  • Type of loan: Unsecured
  • Credit Check: Soft inquiry

When talking about the best peer to peer lending in 2020, Upstart is amongst the very top of any list. One of the things that this amazing lending option stands out for is the fact that it focuses on the middle-of-the-road borrowers. This is a nice change, seeing as how the majority of lending options either focus on bad credit or good credit in order to expand their niche. The option of unique underwriting further improves one’s odds.

On average, Upstart approves about 27% more applicants than traditional lenders. In addition, those between 620 and 660 have almost two times better odds of being approved. Moreover, this P2P company is also quite favorable for those who make less than $50,000 a month. Also, this is one of the rare platforms that favor younger applicants, which is why people under the age of 25 have drastically better odds of getting a loan. This is why a lot of students prefer to use this in order to cover their educational expenses.

Loan requirements:

One of the things that make Upstart quite unique amongst peer to peer lending companies is the fact that they actually accept those with credit history too short for providing a FICO score. The reason why this is so big is due to the fact that it makes Upstart loans available to students and young entrepreneurs wanting to cover some of their immediate business expenses.

Loan Agreement Terms

APR: The APR on Upstart loans is between 7.98% and 35.99%. The lower APR is almost as low as it gets in the industry. Meaning that people with decent credit scores and who fulfill other criteria can get some of the best rates available on the peer to peer lending market.

Loan Amount: Upstart offers loans from $1,000 to $50,000, which is a perfect range for all types of loans. A huge range of lendable figures means that this loan is quite versatile and that it can be used for everything from quick cash flow injections to business ideas.

Loan Term: Loan term is between 3 and 5 years. For students, stretching the loan over the course of 5 years can ensure that the monthly credit payment is fairly low. When it comes to peer to peer loans for bad credit, the high maximum APR might make people take a longer loan to consider some alternatives.

Origination Fee: The origination fee itself ranges from 0% to 8%. For larger loans, 8% may be quite large. Still, if you can manage to get a low or 0% origination fee, you can save a lot of money and get a competitive peer to peer lending offer with the best returns on the market.

Funding Time: When talking about Upstart personal loans, the funding generally takes less than a week. Experiences of the majority of lenders out there suggest that the whole process takes between 24 and 48 hours. Once the decision is made, the funds can be in the account in less than one business day.

Credit Check: The initial check on Upstart’s platform doesn’t affect one’s credit check. However, proceeding to the next step of the application might involve a hard credit pull, which might end in an applicant’s credit score being impacted. Still, this is something that can’t be avoided even with some of the best P2P lending sites.

Repayment: In order to provide one more layer to its user-friendliness, Upstart doesn’t require a repayment fee. In other words, the majority of young lenders can use this method in order to quickly establish a positive credit history and build up their credit score.

What We Liked and Didn’t Like about Upstart

When looking for the best peer to peer lending companies, Upstart will always find its way into the conversation. The first reason for this is the fact that it accepts borrowers that are new to credit, where the majority of lenders would outright reject them.

Second, provided that the borrower has a strong case going in their favor and that the underwriter is quick, the funds can be there in a day or so. This is great for those who are short of cash and want to get to their funds as quickly as possible.

Like all best peer to peer lending sites, Upstart allows prospective borrowers to pre-qualify with a soft credit inquiry gives people the assurance that they need. This way, you can avoid a scenario where one unnecessarily compromises their credit for the loan that they can’t possibly hope to get approved of.

On the other hand, the origination fee can be quite significant, provided that the assessment of the borrower is not that favorable. This alone can put those with a shortage of cash in an even more disadvantageous position.

Aside from this, there’s a noticeable lack of a co-signer option. This fact alone can be a serious dealbreaker for those looking for the best peer to peer lending platform in Upstart. On the other hand, some other advantages on this list might make up for this shortcoming.

Prosper
Prosper

BEST FOR

good credit & high income borrowers

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  • APR: 7.95%–35.99%
  • Loan Amount: $2,000–$40,000
  • Minimum Credit Score: 640+
  • Loan Term: 3–5 years
  • Origination Fee: 2.41%–5%
  • Type of loan: Unsecured

When looking for great loan rates, Prosper will always be near the top of the list. This platform focuses heavily on credit history, and its intricate system studies it in depth. This, alongside with other harvested data, gives the potential lender a complete picture of the borrower’s credit viability.

In some scenarios, the Prosper may allow a postponement of the due date; nonetheless, the loan itself cannot be extended (even in emergencies). Finally, the platform itself was founded in 2005 and so far, it has facilitated over $17 billion in various loans. Its history is just one of the reasons why so many consider it to be perhaps the best peer to peer lending company in the field.

Loan requirements:

This is a credit that focuses on those who have a somewhat better credit score. Unlike the majority of other P2P loans, Prosper insists on a minimum of 640 credit rate.

As for the other personal information, Prosper requires knowing the borrower’s employment status, income, as well as their monthly housing payment options. There are several requirements that Prosper insists on for its P2P loans. The debt-to-income ratio needs to be below 50%. Also, there should be no bankruptcies in the past 12 months. As far as credit inquiries, the number should be fewer than five in the last six months. There is also a restriction on the minimum of three open credit lines on the report.

Loan Agreement Terms

APR: Prosper’s APR is at a decent 7.95–35.99%. This means that depending on one’s credit history, one could land a quite favorable deal or a completely horrible rate. The bigger the discrepancy, the greater the importance of the broader context, yet it’s definitely considered amongst the best the P2P industry has to offer.

Loan Amount: $2,000 to $40,000 is the amount of money that one can borrow through Prosper. According to all estimates, this is an industry average. The minimum amount is close to the industry minimum, and the maximum amount is close to the industry maximum (not a lot of lenders go above $50,000). In other words, this can meet all purposes of a standard P2P loan.

Loan Term: The loan term is 3–5  years, which is quite decent as far as person to person loans go. Not a lot of other lenders go above or below this figure.

Origination Fee: The origination fee ranges from 2.4%–5%, which is more than enough to make Prosper a worthy LendingClub competitor in this regard, as well. The minimum fee is somewhat higher than with the LendingClub, but the maximum fee is also somewhat lower.

Funding Time: Generally speaking, Prosper values expediency and efficiency, which is why money usually gets deposited into the account within 3–5 days. This makes the loan both dependable and reliable.

Credit Check: Checking your credit on Prosper’s platform won’t affect the borrower’s credit score. Nonetheless, if the borrower proceeds with the application, the lender might pull a hard credit inquiry.

Repayment: There are no prepayment penalties for those who decide to deal with this loan early on. With smart finance management, this can create some of the best returns in peer to peer lending situations.

What We Liked and Didn’t Like about Prosper

The thing that the majority of users love about Prosper is the fact that it provides a simple first-time borrowing/lending experience. While the checks may be complex, they are all done by the platform. By the time that borrower and lender are matched, both have already passed an intricate system of checks and considerations.

Prosper is often listed amongst the best peer to peer lending sites for borrowers with high credit scores. These borrowers get an outstanding APR, a low origination fee, and the ability to change payment dates later in the future. Combined, this gives an unprecedented level of financial insulation that the majority of borrowers are craving.

The joint loan option is yet another major upside of going Prosper as one’s platform of choice. This can help one get the best peer to peer lending rates and, overall, get themselves the loan that their finances can handle.

The first thing we didn’t like about Prosper is the fact that it charges the origination fee upfront, which is something that might drive away a lot of potential borrowers. Also, there’s a fairly strict late payment fee, which, truth be told, doesn’t differ much from other P2P lenders.

Finally, due to the fact that the maximum APR is fairly high, there are some borrowers who might get quite an unfavorable deal. So, for the people with borderline bad credit, it might be a better idea to look elsewhere.

How to Choose the Best P2P Platform

Identifying the ideal lender is not a simple and straightforward task. First of all, it depends on your circumstances. Best peer to peer lending sites for borrowers isn’t necessarily best for investors and vice-versa. Credit check requirements for borrowers are not the same for lenders. For instance, while one platform may list a credit score of 600 as a minimum for borrowers, the same platform might require a 675 credit score for lenders. This is just one of many reasons why the position of the person in question impacts the criteria so heavily.

Other than just looking at the loan terms offered by any of the best peer to peer lending sites, there are several other aspects worth considering. The history, the background, and the reputation of the team behind the lending platform are definitely worth taking into account. Second, the transparency of the platform and its track record, in general, are also worth paying attention to. It might also be a good idea to consult some of its previous users in order to see their experiences through reviews and ratings.

Customer support is another pivotal thing to pay attention to. In order to be truly labeled as the best rated peer to peer lending site, they definitely have to pass this test. Talking directly to the representative might make a major difference in this regard. All in all, there’s a lot of research to do before committing to a single lender.

Finally, once a borrower is in a much better financial position, it would be a good idea to consider growing their wealth by becoming a lender on a P2P platform. In this scenario, it would be both symbolic and ethical to return to the platform that they used the most as a lender. This way, the individual’s finances would come at a full circle.

Wrap Up

In order to properly assess peer to peer loans, a potential borrower needs to remove themselves from the intricacies of the peer to peer system and merely look at this as yet another loan. For the borrower, all that matters are the loan terms and loan requirements.

These factors will determine their financial responsibilities in the nearest future and their financial eligibility for the loan in question. The fact that peer to peer concept is growing and expanding means that an average borrower will have even more lending options to choose from in the future.

FAQ

What is peer to peer lending?

Peer to peer lending is a lending method where individuals directly lend money to other individuals via specialized peer to peer sites. This way, the lender is able to capitalize on their money by earning interest, while the borrower gets an additional potential source of funding.

In order for this method to work, both borrowers and lenders have to follow strict rules and be precise when giving their financial information. The platform’s filter system does all the rest.

What is the best peer to peer lending site?

The question of what’s the best lending site is not simple to answer. The best is different for everyone, after all. An ideal loan for debt consolidation may not necessarily be the best P2P loan for emergency expenses.

Peerform has excellent APR but a high minimum loan amount and relatively low maximum loan amount. Upstart provides the best overall terms and conditions and is great for people with poor credit or limited credit history.

Make sure you understand your needs and capabilities, do your research, and make your choice.

How does peer to peer lending work?

With the help of lending platforms, investors are directly matched with lenders. Investors need to be precise about what kind of loan they want to give. After that, the platform matches them with suitable prospective borrowers. The riskier the loan, the greater the profit for the investor. It’s as simple as that; just make sure to do thorough research in order to find the best peer to peer lending terms for your needs.