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Peer-to-Peer Personal Loans for Borrowers

Updated on February 20, 2025
Amrita Jayakumar
Written by 
Contributing Writer
Kim Lowe
Edited by 
Head of Content, Personal & Student Loans
Fact Checked
Chanell Alexander
Co-written by 
Writer
Amrita Jayakumar
Written by 
Contributing Writer
Chanell Alexander
Co-written by 
Writer
Kim Lowe
Edited by 
Head of Content, Personal & Student Loans
Fact Checked

Peer-to-peer lending lets you borrow money directly from a person or group of people instead of going through a bank. Prosper and LendingClub popularized the concept of peer-to-peer loans in the U.S. Here’s our comparison of these peer-to-peer personal loans for borrowers.

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Prosper:

Prosper
4.0

Est. APR

8.99-35.99%

Loan amount

$2K-$50K

Min. credit score

660

Check Rate
on NerdWallet

  • Qualifications:

    Key Facts:Prosper is a peer-to-peer online lending platform that accepts borrowers across the credit spectrum and offers competitive rates and fees.
    Qualifications:
    • Minimum credit score: 660; borrower average is 709.
    • Minimum income: $15,000; borrower average is $137,000.
    • Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 41.05% (including mortgage).
    • Must be at least 18 years old.
    • Must provide Social Security number and a U.S. bank account.
    Available Term Lengths:2 to 5 years
    Fees:
    • Origination fee: 1% to 9.99%.
    • Late fee: The greater of $15 or 5% of the unpaid amount.
    • Insufficient funds fee: $15.
    • Mailed-in payment fee: $5.

LendingClub:

Lending Club
4.5

Est. APR

7.90-35.99%

Loan amount

$1K-$50K

Min. credit score

600

Check Rate
on NerdWallet

  • Qualifications:

    Key Facts:LendingClub personal loans are a solid option for good-credit borrowers looking to consolidate debt and build their credit.
    Qualifications:
    • Minimum credit score: 600; average borrower score is above 700.
    • Minimum income: None; lender requires proof of income. Borrower average is $100,000 per year.
    • Maximum DTI: 40%.
    • Minimum credit history: 36 months and two accounts.
    Available Term Lengths:2 to 6 years
    Fees:
    • Origination fee: 0%-8%
    • Late fee: 5% of payment or $15 after 15-day grace period.
    • Insufficient funds: $15.

Prosper:

Prosper
4.0

Est. APR

8.99-35.99%

Loan amount

$2K-$50K

Min. credit score

660
Check Rate
on NerdWallet

  • Qualifications:

    Key Facts:Prosper is a peer-to-peer online lending platform that accepts borrowers across the credit spectrum and offers competitive rates and fees.
    Qualifications:
    • Minimum credit score: 660; borrower average is 709.
    • Minimum income: $15,000; borrower average is $137,000.
    • Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 41.05% (including mortgage).
    • Must be at least 18 years old.
    • Must provide Social Security number and a U.S. bank account.
    Available Term Lengths:2 to 5 years
    Fees:
    • Origination fee: 1% to 9.99%.
    • Late fee: The greater of $15 or 5% of the unpaid amount.
    • Insufficient funds fee: $15.
    • Mailed-in payment fee: $5.

LendingClub:

Lending Club
4.5

Est. APR

7.90-35.99%

Loan amount

$1K-$50K

Min. credit score

600
Check Rate
on NerdWallet

  • Qualifications:

    Key Facts:LendingClub personal loans are a solid option for good-credit borrowers looking to consolidate debt and build their credit.
    Qualifications:
    • Minimum credit score: 600; average borrower score is above 700.
    • Minimum income: None; lender requires proof of income. Borrower average is $100,000 per year.
    • Maximum DTI: 40%.
    • Minimum credit history: 36 months and two accounts.
    Available Term Lengths:2 to 6 years
    Fees:
    • Origination fee: 0%-8%
    • Late fee: 5% of payment or $15 after 15-day grace period.
    • Insufficient funds: $15.

» MORE: Compare online personal loans and apply

What are peer-to-peer loans?

Peer-to-peer loans connect 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 chance to borrow 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 and now facilitates institutional lending. Prosper still allows consumers to invest in fractions of loans.

» MORE: Best loans for fair credit

How does peer-to-peer lending work?

Like other online loans, peer-to-peer lending is typically facilitated by a financial tech company and does not require an in-person application or a phone conversation with a loan officer. 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-qualifying, 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 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 the loan. The fee typically ranges from 1% to 10% of the loan amount. The lender typically deducts this fee from the loan proceeds before sending the funds to you.

  • 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

iBusiness Funding and Kiva are peer-to-peer lenders that offer only small-business loans. iBusiness is best for established businesses that want to expand, while Kiva is better suited for micro businesses that are open to crowdfunding.

» MORE: Small business peer-to-peer loans

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 scores of 629 or below), but they may have interest rates from about 20% to 36%. A four-year, $15,000 loan with a 28.7% APR would have monthly payments of $529 and an overall interest cost of $10,383.

You can calculate average rates and payments using a personal loan calculator.

While lenders like LendingClub and Prosper 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 personal loan.

Next steps: 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 February 20, 2025

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How we chose the best personal loans

Our team of consumer lending experts follows an objective and robust methodology to rate lenders and pick the best.

35+

Lenders reviewed

We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.

25+

Categories assessed

Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.

70+

Data points analyzed

Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.

Star rating categories

We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.
Affordability

25%

We review lenders’ annual percentage rate offerings at least twice per year and the competitiveness of each lenders’ APR range. We also assess whether a lender charges an origination fee and any opportunity for borrowers to receive a rate discount.

Customer experience

20%

We consider the experience of the consumer trying to manage a personal loan, which means accessibility of customer service representatives, whether borrowers can choose and change their payment due date, and the ability to track their loan on a mobile app.

Underwriting and eligibility

20%

We consider the rigorousness of each lender’s underwriting practices and how widely available their loans are. This category includes whether a lender does a hard credit check before providing a loan, the range of credit profiles they accept and how many states their loans are offered in.

Loan flexibility

20%

We assess how flexible lenders can be with borrowers, including whether they offer multiple loan types, personal loan amounts and repayment term options and whether they offer direct payment to creditors on debt consolidation loans.

Application process

15%

We consider the lender’s full application process, including a borrower’s ability to preview their loan offer via pre-qualification, whether basic loan information such as APR range and repayment terms are available and easy to find online and how quickly a loan can be funded after approval.

5.0

Overall score

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial technology companies and financial institutions. We collect over 70 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.
To recap our selections...

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