BEST OF
3 Peer-to-Peer Personal Loans for Borrowers
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.
Peer-to-peer lending lets you borrow money directly from a person or group of people instead of going through a traditional bank. They're typically facilitated online 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.
Peer-to-peer lending lets you borrow money directly from a person or group of people instead of going through a traditional bank. They're typically facilitated online 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
Lender | NerdWallet Rating | Est. APR | Min. Credit Score | Learn More |
---|---|---|---|---|
8.05 - 35.89% | 600 | on LendingClub's website | ||
7.95 - 35.99% | 640 | on Prosper's website | ||
5.99 - 29.99% | 600 | See my rates on NerdWallet's secure website |
on LendingClub's website
LendingClub
Min. Credit Score
Est. APR
Loan Amount
on LendingClub's website
on Prosper's website
Prosper
Min. Credit Score
Est. APR
Loan Amount
on Prosper's website

on NerdWallet's secure website
Peerform

Min. Credit Score
Est. APR
Loan Amount
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.
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.
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 February 1, 2020
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...