BEST OF

Peer-to-Peer Personal Loans for Borrowers

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

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Peer-to-peer lending lets you borrow money directly from a person or group of people instead of going through a bank. Like other online loans, they're typically facilitated by a financial tech company and do not need an in-person application or even a phone conversation with a loan officer.

Some online lenders, notably Prosper and LendingClub, popularized the concept of peer-to-peer loans in the U.S. Here’s our roundup of lenders that offer peer-to-peer personal loans for borrowers.

Summary of Peer-to-Peer Personal Loans for Borrowers

Lending Club
Check rate

on LendingClub's website

LendingClub

4.0

NerdWallet rating 
Lending Club

Est. APR

8.05 - 35.89%

Loan Amount

$1,000 - $40,000

Min. Credit Score

600
Check rate

on LendingClub's website


Min. Credit Score

600

Key facts

LendingClub is a pioneer of peer-to-peer lending and a good option if you want to consolidate your debt.

Pros

  • Offers co-signed and joint loan options.

  • Offers direct payment to creditors with debt consolidation loans.

  • Soft credit check with pre-qualification.

Cons

  • Borrowers can only choose from two repayment term options.

  • Rates are high compared to other online lenders.

  • Charges an origination fee.

Qualifications

  • Minimum credit score of 600. LendingClub uses FICO 8 credit scoring model.

  • Minimum credit history of three years.

  • Debt-to-income ratio of less than 40% for single applications, 35% combined for joint applicants.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 1% to 6%.

  • Late fee: Greater of $15 or 5% of payment after 15-day grace period.

Disclaimer

A representative example of loan payment terms is as follows: you receive a loan of $13,411 for a term of 36 months, with an interest rate of 12.16% and a 5.30% origination fee of $711, for an APR of 15.99%. In this example, you will receive $12,700 and will make 36 monthly payments of $446.46. Loan amounts range from $1,000 to $40,000 and loan term lengths are 36 months or 60 months. Some amounts and term lengths may be unavailable in certain states. APR ranges from 8.05% to 35.89% and is determined at the time of application. Origination fee ranges from 3% to 6% of the loan amount. Lowest APR is available to borrowers with excellent credit. Advertised rates are subject to change without notice. Loans are made by LendingClub Bank, N.A., Member FDIC (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. Loans are subject to credit approval and sufficient investor commitment before they can be funded or issued. Certain information that we subsequently obtain as part of the application process (including but not limited to information in your consumer report, your income, the loan amount that your request, the purpose of your loan, and qualifying debt) will be considered and could affect your ability to obtain a loan from us. Loan closing is contingent on accepting all required agreements and disclosures at Lendingclub.com. “LendingClub” is a trademark of LendingClub Bank.

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Prosper
Check rate

on Prosper's website

Prosper

4.5

NerdWallet rating 
Prosper

Est. APR

7.95 - 35.99%

Loan Amount

$2,000 - $40,000

Min. Credit Score

640
Check rate

on Prosper's website


Min. Credit Score

640

Key facts

Peer-to-peer lender Prosper has rates and fees that compare to other lenders for good-credit borrowers.

Pros

  • Option to change your payment date.

  • Offers joint loan.

  • Offers wide range of loan amounts. 


Cons

  • No rate discount for autopay.

  • Charges origination and late fees.

  • Borrowers can choose from only two repayment term options.

Qualifications

  • Minimum credit score: 640; borrower average is 726.

  • Minimum credit history: 2 years.

  • Minimum income: No minimum income requirement; borrower average is $113,000.

  • Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 18% with housing payment.

  • No bankruptcies filed within the past year.

  • At least three open accounts on credit report.

  • Fewer than five credit bureau inquiries in the last six months.

  • Must be at least 18 years old.

  • Must provide Social Security number and a U.S. bank account.


Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 2.41 to 5%.

  • Late fee: $15 or 5% of unpaid amount (whichever is greater).

  • Insufficient funds fee: $15.

Disclaimer

For example, a three-year $10,000 personal loan would have an interest rate of 11.74% and a 5.00% origination fee for an annual percentage rate (APR) of 15.34% APR. You would receive $9,500 and make 36 scheduled monthly payments of $330.90. A five-year $10,000 personal loan would have an interest rate of 11.99% and a 5.00% origination fee with a 14.27% APR. You would receive $9,500 and make 60 scheduled monthly payments of $222.39. Origination fees vary between 2.41%-5%. Personal loan APRs through Prosper range from 7.95% to 35.99%, with the lowest rates for the most creditworthy borrowers. Eligibility for personal loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans 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 personal loans made by WebBank, Member FDIC.

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Upstart
Check rate

on Upstart's website

Upstart

4.5

NerdWallet rating 
Upstart

Est. APR

6.95 - 35.99%

Loan Amount

$1,000 - $50,000

Min. Credit Score

580
Check rate

on Upstart's website


Min. Credit Score

580

Key facts

Upstart is a good option for those who have short credit histories and promising financial futures.

Pros

  • Accepts borrowers new to credit.

  • Able to fund loans within one business day.

  • Offers direct payment to creditors with some debt consolidation loans.

Cons

  • Borrowers can choose from only two repayment term options.

  • Charges origination fee.

Qualifications

  • Minimum credit score: 580.

  • Minimum credit history: None, this lending platform accepts borrowers with credit history too limited to produce a FICO score.

  • Minimum gross income: $12,000.

  • Employment: Full-time job, full-time job offer starting in 6 months, a regular part-time job, or another source of regular income.

  • Must have U.S. residential street address where borrower resides (unless military personnel on active duty).

  • Must be at least 18 years old.

  • Valid email account required.

  • Personal bank account with U.S. routing number required.

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

The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 24.4% and 36 monthly payments of $36 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR 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.

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What are peer-to-peer loans?

Peer-to-peer loans started with the idea of connecting borrowers and investors directly. They became popular for borrowers, especially those with low credit scores, after the 2008 financial downturn when many traditional banks’ lending requirements tightened. Peer-to-peer offered a better shot at getting money.

Today, the original “retail” form of peer-to-peer lending — where individual consumers invest in portions of loans — has evolved to include institutional lending, where institutions like hedge funds or insurance companies back the loans. LendingClub ended its program for individual investors in 2020 and now facilitates institutional lending. Prosper still allows consumers to invest in fractions of loans.

How does peer-to-peer lending work?

To get a peer-to-peer loan, borrowers follow the same process as they would for getting an online loan.

Retail and institutional peer-to-peer lending companies check eligibility through pre-qualification, which involves a soft credit pull that doesn’t have an impact on your credit score.

Pre-qualifying allows you to select a loan amount and loan purpose while providing your name, date of birth and address. Then, you can see the annual percentage rate and loan terms you could be eligible for.

If you decide to apply, peer-to-peer lenders, like other lenders, confirm additional factors such as your credit score and credit history, which involves a hard credit check.

Features of peer-to-peer loans

Peer-to-peer loans are a type of online loan and share these common features:

  • Origination fee: This is an upfront fee that 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 allow borrowers to manage everything on the lender’s website, from applying for a loan and uploading documents to signing the loan contract and making monthly payments.

Since applications for peer-to-peer loans might be reviewed by multiple investors, they can take longer to fund than personal loans from banks or other online lenders — up to a week, in some cases.

Peer-to-peer loans for small businesses

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

Can you get a peer-to-peer loan with bad credit?

Peer-to-peer loans can be an option for bad-credit borrowers (those with FICO scores of 629 or below), but they may have higher interest rates. For example, a four-year, $15,000 loan with a 28.7% APR would have monthly payments of $529 and an overall interest cost of $10,392. You can calculate average rates and payments using a personal loan calculator.

While lenders like LendingClub, Prosper and Upstart have minimum credit scores in the bad- or fair-credit range, you may be eligible for lower rates with a credit union or by pursuing a secured or co-signed loan.

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

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 have an impact on your credit score. You can pre-qualify on NerdWallet and compare loan costs and features from multiple lenders.

Last updated on July 13, 2021

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 Peer-to-Peer Personal Loans for Borrowers