Best Peer-to-Peer Loans in 2020

Peer-to-peer lending offers borrowers a new avenue to get funded. The process links borrowers with individual investors willing to lend money in exchange for a longer-term return. The result? A win-win for both investors and borrowers. Because of the vast options in the peer-to-peer lending market, it’s critical you look to find the best peer-to-peer lenders to meet your needs.

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      The best peer-to-peer lenders of 2020

      LenderSimpleScoreAPRLoan AmountTerms
      Lending Club3.210.68% – 35.89%$1,000 – $40,0003 or 5 years
      Upstart3.48.13% – 35.99%$1,000 – $50,0003 or 5 years
      Prosper3.27.95% – 35.99%$2,000 – $40,0003 or 5 years
      Kiva40%Up to $15,000Varies
      Peerform2.755.99% – 29.99%$4,000 – $25,0003 or 5 years

      Best overall – LendingClub

      Lending Club offers peer-to-peer loans up to $40,000 and within four days with no prepayment penalties and low fixed rates.

      Loan Amount
      $1K–$40K
      APR Range
      10.68%–35.89%
      Term
      36–60 months
      SimpleScore
      3.2 / 5.0
      close
      SimpleScore LendingClub 3.2
      Rates 2
      Loan Size 5
      Customer Satisfaction 3
      Support 3
      Fees 3

      With over 3 million customers and $50 billion in loans serviced, Lending Club is a powerhouse in the peer-to-peer lending industry. The entire loan process can be completed online, and you can get access to up to $40,000 in as little as four days.

      Currently, Lending Club services customers in 49 U.S. states, with Iowa being the exception. The company offers personal loans, small business loans and auto refinancing loans. While personal loans are available up to $40,000, small business loans are available up to $500,000. Customers can apply for a loan online within minutes. From there, you’ll be presented with several different offers. Once you select the best option for you, your money will be sent directly to your bank account. In some instances, you may select that the borrowed money is paid directly to your creditors in exchange for a lower APR.

      As one of the largest peer-to-peer lenders with over 3 million customers, Lending Club has the experience and has built the industry trust borrowers should flock to.

      LendingClub Disclosure

      All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history. The APR ranges from 10.68% to 35.89%. For example, you could receive a loan of $5,700 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 time of application. *The origination fee ranges from 1% to 6%; the average origination fee is 5.2% (as of 12/5/18 YTD).* 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 or longer.

      Best for next-day funding – Upstart

      Upstart offers peer-to-peer loans from $1,000 to $50,000 for those customers with at least a 620 credit score, but also will work with people with insufficient credit history.

      Loan Amount
      $1K–$50K
      APR Range
      8.69%–35.99%
      Term
      36–60 months
      SimpleScore
      3.4 / 5.0
      close
      SimpleScore Upstart 3.4
      Rates 2
      Loan Size 5
      Customer Satisfaction 4
      Support 3
      Fees 3

      Upstart can get you a rate quote in as little as five minutes and entirely online. While Upstart does mention it will only work with borrowers who have at least a 620 credit score, the company does say it’s willing to work with people who have insufficient credit histories. Upstart’s flexibility to work with consumers with insufficient credit history is a major positive. Additionally, the fact the company looks at more than just your credit score when making a decision can be big for some struggling to find loan approval.

      Upstart Disclosure

      * 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 19% and 36 monthly payments of $35 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. ** Estimated savings are calculated based on the credit profiles of all loans originated by Upstart-powered lenders using the Upstart Platform as of April 1, 2019 in which the funds were used for credit card refinancing. Estimated savings are calculated by deriving current credit card APR using minimum monthly payment and 1% of the principal balance. The estimated credit card APR is then compared to the accepted loan to determine median savings per borrower. To evaluate savings on a loan you are considering, it is important to compare your actual APR from your existing debt to the APR offered on the Upstart Platform. More than 303,000 loans have been originated on the Upstart platform as of July 1, 2019. Images are not actual customers, but their stories are real. † If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and in accordance with federal law. ‡ While most of our borrowers opt for automated recurring payment for ease of use, we also accept payments by check or one time electronic payments. Borrowers have the flexibility to choose the repayment method that works best for them. 9 out of 10 Upstart users surveyed internally reported that they would recommend Upstart. †† When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information will be reported to the credit bureaus. § 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 $5,100. The minimum loan amount in GA is $3,100.

      Best for short credit histories – Prosper

      Prosper services peer-to-peer loans up to $40,000 for customers with a debt-to-income below 50% and no bankruptcies in the last 12 months.

      Loan Amount
      $2K–$40K
      APR Range
      7.95%–35.99%
      Term
      36–60 months
      SimpleScore
      3.2 / 5.0
      close
      SimpleScore Prosper 3.2
      Rates 2
      Loan Size 5
      Customer Satisfaction 3
      Support 3
      Fees 3

      Prosper personal loans are available to customers who meet the company’s list of income, debt and bankruptcy requirements. Prosper loans have no prepayment fees but do come with an origination fee of 2.4% to 5%. While Prosper does not list exact income requirements except that you have some income, it does mention working with customers that have less than a 50% debt to income ratio. This signals favorable approval probabilities for people that may be struggling to get approval elsewhere across the marketplace.

      Investors with Prosper can get involved through the company’s website or the dedicated mobile app. The mobile app provides extensive tracking abilities for investors and options for you to select the types of loans you want to invest in as well as the associated risk level giving investors a good way to diversify their portfolio. Historically, returns with Prosper have averaged 5.1%.

      Prosper Disclosure

      For example, a three-year $10,000 personal 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 personal 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%. Personal loan APRs through Prosper range from 7.95% (AA) to 35.99% (HR) for first-time borrowers, 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. Prosper and WebBank take your privacy seriously. Please see Prosper’s Privacy Policy and WebBank’s Privacy Policyfor more details. Notes offered by Prospectus. Notes investors receive are dependent for payment on unsecured loans made to individual borrowers. Not FDIC-insured; investments may lose value; no Prosper or bank guarantee. Prosper does not verify all information provided by borrowers in listings. Investors should review the prospectus before investing.

      Best for microloans – Kiva

      International borrowers looking for funding for a new entrepreneurial idea should look into Kiva as the company services 98 different countries around the globe.

      Loan Amount
      Up to $15K
      APR Range
      0%
      Term
      Varies
      SimpleScore
      4 / 5.0
      close
      SimpleScore Kiva 4
      Median APR 5
      Loan Amount 2
      Product Variety N/A
      Resources 4
      Fees 5

      Kiva, a 501(c)3 U.S. nonprofit, is based in San Francisco but has staff around the globe. The company offers entrepreneurial loans internationally to help new business owners in struggling areas get started. Started in 2005 as a crowdfunding company, Kiva has grown into a nonprofit lending powerhouse with over 3.5 million borrowers and $1.42 billion in loans to 77 different countries.

      Currently, Kiva loans are helping small businesses grow in 77 countries across the globe. While the loan is helping hard-hit areas, the company stresses it’s a loan and not a donation. The current repayment rate on loans is 96.8% and investors can get started for as little as $25 because Kiva uses a crowdfunding model to complete its mission. 100% of every invested dollar goes toward loan funding. Some of the main uses of the funds through Kiva are funding education for students in need, helping women in oppressed areas start businesses and helping farmers to invest in necessary equipment.

      People without access to traditional funding sources looking for smaller loans could find the funding they need from Kiva. The nonprofit offers loans up to $15,000 and with rates as low as 0% with repayment terms up to three years.

      Best for bad credit – Peerform

      If you have less-than-great credit and are in need of an unsecured loan up to $25,000, Peerform could be the provider you are looking for.

      Loan Amount
      $4K–$25K
      APR Range
      5.99%–29.99%
      Term
      Up to 3 years
      SimpleScore
      2.8 / 5.0
      close
      SimpleScore Peerform 2.8
      Rates 4
      Loan Size 3
      Customer Satisfaction N/A
      Support 3
      Fees 1

      Peerform is a peer-to-peer lender that has some lower requirements for approval than other companies in the industry. Loan sizes are a bit smaller, though, than other companies maxing out at $25,000. This is typical with lenders willing to work with less-than-great credit profiles. You will want to have a bank account you can connect for auto-debit to repay your loan because the only other repayment option is by check which comes with a $15 processing fee.

      Investors interested in Peerform have the opportunity to earn healthy and steady returns through the company. To help protect investors, Peerform employs a state-of-the-art Fraud Prevention System to better identify users, check credit scores and perform compliance checks. Additionally, investors have free access to the Peerform loan analyzer that breaks down the potential risks and returns on different loans.

      Although people with lower credit scores may not be able to utilize any of the other listed peer-to-peer lending options. Peerform, though, is willing to work with borrowers with credit scores as low as 600 and debt to income ratios as high as 40%.

      What is peer-to-peer lending, and how does it work?

      Typically, personal loans are serviced through a bank, credit union or other major financial institution. With peer-to-peer lending, though, borrowers can get money from individuals not associated with a bank. Online peer-to-peer companies facilitate the lending process between the investors and the borrowers for a small fee.

      On the borrowing side, things will look identical. You’ll make your payments to the peer-to-peer facilitator much as you would to a financial institution. The only difference is that payment will eventually end up with an individual and not with a bank.

      Those people looking to invest in peer-to-peer lending may find a new avenue providing better returns than traditional investments. The risk will be higher, but the potential returns will also be higher.

      Check Your Personal Loan Rates

      Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

      Get Started

      with our trusted partners at Bankrate.com

      Pros and cons of peer-to-peer lending

      Pros

      • Consumers with worse credit may be able to get approval easier than with a traditional funding source
      • Loans are available unsecured without the need for collateral
      • There are few limitations on what the money borrowed through peer-to-peer lending networks can be used for

      Cons

      • The size of loans available may be smaller than with other forms of borrowing
      • You may have less flexibility in repayment terms than when working with a major financial institution
      • You may be required to pay an application fee

      Methodology

      SimpleScore

      The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.

      For every review, our editorial team:

      • Identifies five measurable aspects to compare across each brand
      • Determines the rating criteria for each aspect score
      • Averages the five aspect scores to produce a single SimpleScore

      Here’s a breakdown of the five aspect scores and their rating criteria for our review of the best personal loans of 2020.

      Why do some brands have different SimpleScores on different pages?

      To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

      However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare NetCredit’s personal loans according to our criteria for the best personal loans, it scores a 2.3 out of 5. But when we compare NetCredit according to the criteria for the best bad credit personal loans, it scores considerably higher, since the criteria for the latter review are more lenient (lenders who serve borrowers with bad credit will always offer higher rates, so we needed to adjust our category methodology to account for different industry standards).

      Questions about our methodology?

      Email Hayley Armstrong at hayley@thesimpledollar.com.

      Rates

      We looked at the maximum APR for each lender — the lower their maximum rate, the higher their score.

      Loan Size

      We awarded higher scores to lenders with more generous loan sizes.

      Customer Satisfaction

      We leveraged the J.D. Power 2019 Personal Loan Satisfaction Study℠ to see how customers rated their experience with each lender. (If a lender wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

      Support

      We awarded higher scores to lenders with the most channels for customer support.

      Fees

      We looked at the three most common fees — origination, late payment, and pre-payment — and penalized lenders for each fee charged.

      Jason Lee

      Contributing Writer

      Jason Lee is a U.S.-based freelance writer with a passion for writing about dating, banking, tech, personal growth, food and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill sets with the rest of the world. Follow Jason on Facebook here

      Reviewed by

      • Courtney Mihocik
        Courtney Mihocik
        Editor

        Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.