Best Peer-to-Peer Loans in 2021

Peer-to-peer loans are personal loans funded by individuals, groups and financial institutions. Instead of applying directly to a bank or other financial institution for a personal loan, borrowers submit applications through a peer-to-peer lending company that acts as a matching agent. These types of loans can be a great financial opportunity for borrowers and investors alike.

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      With the right match, borrowers can get personal loans at competitive rates, and lenders may be able to reap a higher yield than a savings account or CD. We’ve researched interest rates, loan terms, customer satisfaction, customer support and fees using our proprietary SimpleScore methodology to find the best peer-to-peer loans for borrowers and lenders.

      The 5 best peer-to-peer loans of 2021

      • Best Peer-to-Peer Lending for Investors: LendingClub
      • Best for High Debt-To-Income Ratio: Prosper
      • Best for Bad Credit: Upstart
      • Best for Short Credit History: Peerform
      • Best for Credit Card Debt: Payoff

      Best peer-to-peer lenders at a glance

      APR Range Loan Amount Term SimpleScore
      LendingClub 10.68%–35.89% $1K–$40K 36–60 months 3.2/5
      Prosper 7.95%–35.99% $2K–$40K 36–60 months 3.2/5
      Upstart 8.41%–35.99% $1K–$50K 36–60 months 3.4/5
      Peerform 5.99%–29.99% $4K–$25K Up to 3 years 2.75/5
      Payoff 5.99%–24.99% $5K-$40K 24–60 months 4.5/5

      *Rates accurate as of December 2020 and exclude autopay discounts.

      Best peer-to-peer lending for investors – LendingClub

      LendingClub’s automated investor profiles make it a no-brainer for low-energy.

      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

      LendingClub is the best peer-to-peer lending for investors because you can fund loans with as little as $25 and even automate your risk profile so you don’t have to hand-select which loans you’d like to fund. Borrowers, on the other hand, can benefit from four types of peer-to-peer loans: personal loans, auto refinancing, patient solutions and small business loans. Plus, LendingClub is one of few peer-to-peer lending sites offering loans to individuals with credit scores as low as 600, which is good news for people with not-so-stellar credit. However, borrowers in need of fast cash may not find the solution they need with LendingClub. Because of the way the investor-backed loans are funded, with investors able to contribute just a fraction of the loan amount, it can take up to two weeks to get your loan.

      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 credit card debt consolidation – Prosper

      As the founding father of peer-to-peer loans, Prosper is a trusted lender for individuals to get access to personal loans with the option to pay them off early.

      Fixed APR
      N/A
      Variable APR
      N/A
      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 paved the way for peer-to-peer lending when it was the first operation of its kind back in 2005. Since then, Prosper has been connecting borrowers with fair to good credit scores with investors for affordable personal loans. Prosper works with borrowers with the highest debt-to-income ratio: 50%. If you’re on the higher end of that ratio, you may not qualify for the best rates or highest borrowing limits. Origination fees are added to your loan based on your creditworthiness, and late payments result in the greater of 5% of the unpaid loan amount, or $15. The good news for borrowers is that there are no prepayment fees — meaning borrowers can pay off their loans at anytime.

      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 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
      8.41%–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 history – Peerform

      With high processing fees for check payments and a low maximum loan amount, Peerform may not be all that accessible to certain borrowers.

      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 another traditional peer-to-peer lending site. Borrowers create a simple profile online and wait for individual investors to back their request. Even though Peerform does offer loans to those with poor credit, there’s another benefit to this platform: borrowers can apply with a credit history as short as one year. There are some downsides to Peerform, though. Since it is accommodating to borrowers with shorter credit histories, the maximum loan amount is lower than others at just $25,000. And let’s not forget fees: If you can’t make your monthly payment by direct debit or online, you’ll end up paying for it. Peerform charges a $15 processing fee for paper checks. Depending on your loan terms, this fee alone could add $540–$900 to the cost of repayment.

      Best for credit card debt – Payoff

      It’s not an excuse to max out your credit cards, but we like that Payoff can help users increase their credit scores when they pay off their credit cards.

      Loan Amount
      $5K-$40K
      APR Range
      5.99%–24.99%
      Term
      24–60 months
      SimpleScore
      4.5 / 5.0
      close
      SimpleScore Payoff 4.5
      Rates 5
      Loan Size 5
      Customer Satisfaction N/A
      Support 4
      Fees 4

      Payoff is a peer-to-peer lending platform that partners with financial institutions (mainly credit unions) to offer loans to pay off credit card debt. Its goal is to improve the financial well-being of its members. With a focus on financial literacy, Payoff excels in member experience. Its assessments aim to help members better understand their relationship to money. You’ll get a welcome chat to onboard you to the service, plus quarterly check-in calls throughout your first year as a member to help keep you on track. However, it may not be best if you just have a few thousand dollars worth of debt to pay off. Since the minimum loan amount is $5,000, anyone who needs less than that should consider a lender with a lower option.

      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

      What is peer-to-peer lending?

      Peer-to-peer lending, also known as P2P lending, is a system of lending that allows people to borrow money from other individuals, cutting out financial institutions altogether in some cases. This can be a more accessible option for individuals with lower credit scores and presents an opportunity for investors to earn interest while funding loans for others. Often, rates can be lower than getting a traditional loan with a bank, and applicants may be able to get their hands on the money faster.

      [ Read: Where to Find Financial Relief During the COVID-19 Pandemic ]

      How peer-to-peer loans work

      The exact process for how investors and borrowers can engage with peer-to-peer loans can vary slightly among different websites and apps, but the overall concept is the same. Investors can fund personal loans either in full or in part, and they earn interest on the loans as borrowers pay it back. Borrowers will usually need to create a quick personal profile, submit to a credit check and accept the loan terms. Once borrowers have cash in hand, they repay through whatever terms have been set for them.

      Investors 

      Each site is a little different, but there are two main types of peer-to-peer investors: individuals and institutions. Generally speaking, individuals need to create an account with a peer-to-peer lending site to start backing loans. There may be minimum income requirements for investors, as well as minimum amounts you need in your investor account, and how much per loan you can fund. When they’re ready, investors provide money to the borrower and collect interest throughout the set term.

      [ Read: 10 Steps to Rid Yourself of Credit Card Debt Forever]

      Borrowers 

      Applying for a peer-to-peer loan is pretty straight forward for borrowers. Once you figure out that you meet the minimum eligibility requirements for a peer-to-peer loan, you can create a profile and apply. For many peer-to-peer lenders, the initial application only involves a soft credit inquiry (meaning it won’t affect your score). Then you’ll review your loan terms and decide whether or not you want to move forward. Depending on how the site you’re using structures its process, you can receive funds as quickly as the next day or as long as a few weeks.

      [ Read: Best Personal Loans for Bad Credit in 2020]

      How to choose the best peer-to-peer loan for you

      1. Determine what type of loan you need. Personal loans can be used to pay for all types of things, from home improvements to debt consolidation. Finding the right peer-to-peer loan depends on what type of expenses you want to use your loan for and how quickly you’ll be able to pay them back. For example, peer-to-peer lenders with specialized loan solutions may offer more flexibility in loan amounts. On the other hand, you need to make sure you’re spending the money on an approved expense.
      2. Check the minimum eligibility requirements. Each lender has its own requirements for borrowers. Consider the minimum eligibility requirements before you spend your time making a profile or application on a lender site. Typically, this includes your FICO score, current income and debt-to-income ratio. Check all this out before applying so you don’t get a hard inquiry on your credit, as this can temporarily lower your score.
      3. Compare APR and loan terms. To figure out the best deal, look at how much the loan will end up costing you with the APR and repayment terms available to you. You should also consider how payments are accepted and any additional fees — is there a processing fee for check payments? How about prepayment fees? In some cases, a loan with a great APR can actually be more expensive than a higher interest loan when you take into account all the fees.

      P2P lending FAQs

      Peer-to-peer lenders make money off of the interest charged on loans. When borrowers make a payment on their loans, a portion of that payment goes towards the principal, and a portion goes towards interest. Peer-to-peer investors and lending sites make money off of the interest.

      Peer-to-peer lending can be better than direct lending, but not always. It depends on your financial picture. For example, if you have a less than perfect credit score, peer-to-peer lending can be a more accessible personal loan option, especially if you use a lender that considers more than credit scores in its decisions. However, banks might offer more competitive rates for those with high credit scores than peer-to-peer lenders.

      The best way to prequalify for a peer-to-peer loan is to make sure you meet all of the minimum borrowing requirements for a lender. Eligibility is typically based on your credit score, debt-to-income ratio and current income. How much you need to borrow can also affect your eligibility, as peer-to-peer lenders can have different maximum loan amounts.

      Last updated October 7, 2020 — Updated SimpleScore and editorial buying guide.

      We welcome your feedback on this article and would love to hear about your experience with the peer-to-peer loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

      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.

      Mandie Kelleher

      Contributing Writer

      Mandie is a freelance content writer from Boston, MA. Her writing has been featured in Reviews.com, Bankrate and Insurify. She holds a B.A. in Linguistics and French from Boston University.

      Reviewed by

      • Courtney Mihocik
        Courtney Mihocik
        Loans Editor

        Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to Interest.com, PersonalLoans.org, and elsewhere.