Best of

4 Best Peer-to-Peer Personal Loans for Borrowers

Amrita JayakumarAugust 2, 2019

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Peer-to-peer loans are personal loans funded by individual investors rather than banks. See our picks for the best peer-to-peer loans from online lenders.

Our picks for

peer-to-peer loans for good credit

Prosper

on Prosper's website

on Prosper's website

Min. Credit Score

640

Est. APR

6.95-35.99%

Loan Amount

$2,000-$40,000

Pros

  • Check your rate with a soft credit check.
  • Fast funding.

Cons

  • Origination and late fees.
  • Does not offer direct payoff to creditors for debt consolidation loans.
Read full review

Qualifications

  • Minimum credit score: 640, but average is 710.
  • Minimum credit history: Two years, but average is 11.
  • Minimum annual income: None, but average is $89,000.
  • Maximum debt-to-income ratio: 50% (excluding mortgage).

Available Term Lengths

  • 3 to 5 years

Fees

  • Origination fee: 2.4% - 5%.
  • Late fee: $15 or 5% of unpaid amount (whichever is greater).
  • Insufficient funds fee: $15.

Disclaimer: For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC.

Lending Club

on LendingClub's website

on LendingClub's website

Min. Credit Score

600

Est. APR

6.95-35.89%

Loan Amount

$1,000-$40,000

Pros

  • Offers a loan option with direct payment to creditors.
  • Co-sign option.
  • Offers hardship plan.

Cons

  • Charges origination and late fees.
  • No rate discount for autopayments.
Read full review

Qualifications

  • Minimum credit score of 600.
  • Minimum credit history of 3 years.
  • Debt-to-income ratio of less than 40% for single applications, 35% for joint applicants.

Available Term Lengths

  • 3 to 5 years

Fees

  • Origination fee: 1% - 6%.
  • Late fee: Greater of $15 or 5% of payment after 15-day grace period.
  • Check processing fee: $7.

Disclaimer: *All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: 595 Market St suite 200 San Francisco Ca 94105. **Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20, 2018. The time it will take to fund your loan may vary.

Our picks for

peer-to-peer loans for bad to fair credit

Upstart and Peerform cater to borrowers with lower credit scores. Upstart considers a borrower’s education level, profession and degree in its credit approval process. Peerform typically takes a week to fund loans.

Upstart

on Upstart's website

on Upstart's website

Min. Credit Score

620

Est. APR

7.69-35.99%

Loan Amount

$1,000-$50,000

Pros

  • Accepts borrowers new to credit.
  • Fast funding.

Cons

  • Origination and late fees.
  • No secured or co-sign option.
Read full review

Qualifications

  • Minimum credit score: 620.
  • Minimum credit history: None.
  • Minimum annual income: $12,000.
  • Max debt-to-income ratio: 45%.

Available Term Lengths

  • 3 to 5 years

Fees

  • Origination fee: 0% - 8%.
  • Late fee: 5% of past due amount or $15, whichever is greater.

Disclaimer: Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5,001. The minimum loan amount in GA is $3,100. The full range of available rates varies by state. The average 3-year loan on Upstart will have an APR of 20% and 36 monthly payments of $35 per $1,000 borrowed. There is no down payment and no prepayment penalty. The average APR on Upstart is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

Peerform
See my rates

on NerdWallet's secure website

See my rates

on NerdWallet's secure website

Min. Credit Score

600

Est. APR

5.99-29.99%

Loan Amount

$4,000-$35,000

Pros

  • Accepts borrowers with a high DTI ratio.
  • Accepts short credit history.

Cons

  • Origination fee.
  • No co-signer option.
  • Longer time to funding.
Read full review

Qualifications

  • Minimum credit score: 600.
  • Minimum credit history: 1 year.
  • Minimum gross annual income: $10,000.
  • Debt-to-income ratio: 40% or lower, excluding mortgage.

Available Term Lengths

  • 3 to 5 years

Fees

  • Origination fee: 1% to 5%.
  • Late fee: 5% of payment or $15, whichever is greater.

Summary of Best Peer-to-Peer Personal Loans for Borrowers

LenderBest ForEst. APRMin. Credit ScoreLearn More
Prosper

Prosper

on Prosper's website

peer-to-peer loans for good credit

6.95-35.99%

640

on Prosper's website

Lending Club

LendingClub

on LendingClub's website

peer-to-peer loans for good credit

6.95-35.89%

600

on LendingClub's website

Upstart

Upstart

on Upstart's website

peer-to-peer loans for bad to fair credit

7.69-35.99%

620

on Upstart's website

Peerform

Peerform

See my rates

on NerdWallet's secure website

peer-to-peer loans for bad to fair credit

5.99-29.99%

600

See my rates

on NerdWallet's secure website

LenderBest ForEst. APRMin. Credit ScoreLearn More
Prosper

Prosper

on Prosper's website

peer-to-peer loans for good credit

6.95-35.99%

640

on Prosper's website

Lending Club

LendingClub

on LendingClub's website

peer-to-peer loans for good credit

6.95-35.89%

600

on LendingClub's website

Upstart

Upstart

on Upstart's website

peer-to-peer loans for bad to fair credit

7.69-35.99%

620

on Upstart's website

Peerform

Peerform

See my rates

on NerdWallet's secure website

peer-to-peer loans for bad to fair credit

5.99-29.99%

600

See my rates

on NerdWallet's secure website

What are peer-to-peer loans?

Peer-to-peer loans, aka marketplace loans, originated with the idea of connecting borrowers and investors directly.

For borrowers, especially those with bad credit, this meant a better shot at getting money without going through traditional banks and credit unions, which tightened up lending after the 2008 financial downturn.

For investors with money to spare, lending to peers promised a higher rate of return than other investment channels, like the stock market.

Today, peer-to-peer lenders operate in an increasingly crowded field of online personal loan companies, some of which partner with the banks that previously discontinued their lending options.

» MORE: NerdWallet picks the best personal loans

Features of peer-to-peer loans

Peer-to-peer loans carry features that distinguish them from other types of online loans, such as origination fees and borrower grades.

  • Origination fee: This is an upfront fee that most peer-to-peer lenders charge to cover the cost of processing your loan. The fee typically ranges from 1% to 8% of the loan amount.
  • Online experience: Peer-to-peer lenders were among the first to develop automated underwriting algorithms that allow quick risk assessments without the need for loan officers. That means borrowers can manage everything on the lender’s website, from applying for a loan and uploading documents to signing the loan contract and making monthly payments.
  • Borrower grades: Peer-to-peer lenders assign potential borrowers internal grades based on their financial data, such as credit score and the ratio of debt to income. These grades serve as a guide for investors so that they can choose grades to fund based on their risk tolerance. Borrowers typically cannot see their own grades, but some companies explain the grading rubric on their websites.
  • Time to fund: Because peer-to-peer loan applications might be reviewed by multiple investors, they can take longer to fund — up to a week — than personal loans from banks or other online lenders.

Peer-to-peer loans for small business

Funding Circle and StreetShares are peer-to-peer lenders that offer only small-business loans. FundingCircle is aimed at businesses that need funding to grow, while StreetShares is better suited to businesses looking for working capital.

» MORE: Small business peer-to-peer loans

How to pre-qualify for a peer-to-peer loan

As with most online lenders, you can pre-qualify for a peer-to-peer loan to see estimated rates and terms before you formally apply. The pre-qualification process usually involves a soft credit check, which doesn't impact your credit score. You can pre-qualify on NerdWallet and compare loan costs and features from multiple lenders.

Last updated on August 2, 2019

Methodology

NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews.

To recap our selections...

NerdWallet's Best Peer-to-Peer Personal Loans for Borrowers

  • Prosper: Best for peer-to-peer loans for good credit
  • LendingClub: Best for peer-to-peer loans for good credit
  • Upstart: Best for peer-to-peer loans for bad to fair credit
  • Peerform: Best for peer-to-peer loans for bad to fair credit