Best Peer to Peer Lending Companies

Find the right P2P loan for you from our list of partner brands, the leading providers on the market. Compare rates and terms, and apply now.
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The lending partners that appear on this site are companies from which we receive compensation. The compensation may impact how and where products appear on the site including the order in which they appear. Ranking and order of products on the site are subject to change and the site does not include all lenders in the marketplace. Additional elements that impact our ranking include historical data such as the number of consumer visits to a partner site, loan applications percentage and funded loan percentage, the user device, operating system, location, the day of the week, time of day and self-assessed credit.


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What is Peer-to-Peer Lending and How Does it Work?

In recent years, lenders looking for small loans with competitive interest rates have turned to peer-to-peer lending (P2P) as a way to sidestep big financial institutions who have stopped lending money as freely as they used to, helping P2P investing become one of the fastest growing segments in the financial services industry. Born out of the 2008 financial crisis, the peer-to-peer lending model began when some companies started to developed online platforms where potential investors looking to earn returns on cash sitting in savings accounts could connect with borrowers looking for more options.

Sometimes called “social lending” or “crowd lending”, peer-to-peer lending companies act as the liaison between borrowers and investors through an internet platform – completely cutting banks out of the process. These lending platforms generate revenue by collecting a loan servicing fee to investors and by applying fees on funded loans from borrowers. After the loan has been funded, the money is released to the borrower by a partner bank and the loan company issues a note to the investor that acts as a form of security.

The lower operating costs and interest rates have made P2P lending a major competitor for the traditional banking system – and an appealing option for borrowers hunting for low-interest personal loan companies looking to diversify their investment portfolios. The streamline method also means that there is a fast turnaround for funding and fees are lower, with some peer-to-peer lenders not charging any penalties to borrowers for late or early payment.  

Borrowers tend to be people looking for unsecured loans of $1,000-$35,000 payable over 3-5 years, who don’t have access to home equity credit. These are often to help pay for small purchases - a used car, home repairs, and so on - or to consolidate their debt with a lower interest loan. Lenders tend to be individuals investing from $5,000 to $25,000, spread across a series of small, $25-$100 loans to minimize default risk. They are looking to sidestep banks and find investments that pay higher than traditional methods such as bank accounts and Certificates of Deposit (CDs).

Pros for Investors:

Lower risk 

If you’re a lender on a peer-to-peer site you have real freedom to pick and choose where to invest your money. If you’re worried about the borrowers you can keep your investment very low or just spread it across a portfolio with hundreds or even thousands of loans in order to offset the risk. 

Better yields

It’s not chiseled in stone, but peer-to-peer investors have the opportunity to get better returns on their money than they would with more traditional, conservative investments like stocks, bonds, mutual funds, and the like.  

Easy to get started 

Getting in the game is easy. You can open an investment account online easily and in no time. You can start off by investing small amounts - even as little as $25 - and then reinvest the earnings back into new loans. Managing your account is easy, you maintain total autonomy and getting up and running should be easier than you probably expected. 

Pros for Borrowers:

Better rates 

P2P sites connect the borrower and the lender directly, easily facilitating loans without you ever having to step foot inside a bank. What does this mean for your bottom line? Because P2P sites have less overhead and spread their risk over many lenders, you can often find a lower APR on a P2P site than at a traditional financial institution. This of course does depend to a large extent on your credit score, but the opportunity to save money on your loan is there with P2P lending. 

Easier application process 

When getting a P2P loan you can go online and get pre-approved within minutes. These sites have online applications that take very little time whatsoever, and you never have to go to your bank branch or even get out of bed if you don’t want to. You’ll still have to get your paperwork in order - including documents like bank statements, pay stubs, and the like, but the entire process should be much smoother. 

Fixed rates and no prepayment fee

With P2P loans you will most likely have a very clearly fixed repayment terms (typically of 24 or 36 months) which should help you manage and plan your monthly expenses. There won’t be any surprises and you’ll always know how much you own. Also, P2P lenders tend to not charge a fee for prepayment, if you come into some money and would like to pay your loan off early. 

Get money faster 

Typically the process is quicker with P2P lending and you should receive your funding within a week or two, and in some cases, within several days.

Cons for Investors:

Can lose money 

While it’s true that with peer-to-peer lending you get to diversify your portfolio to offset risk, this is by no means fool-proof. This is especially true if you go for more high risk portfolios. They do yield greater returns, but this comes with a higher degree of risk. Spread your loans out across a large portfolio and play it cautious at least at first. In addition, you are not allowed to cut your losses and sell the loan ahead of time – you are bound to the commitment made at the time of lending, which is typically for a matter of years. Also, your loans aren’t guaranteed by the federal government, so you could be left hung out to dry if the borrowers default. 

Harder to know your client

While offsetting the risk across a wide range of borrowers is a smart move, with P2P lending you’re also much less able to know your clients personally. This means you’ll have to trust the company’s determination of the risk involved with the borrower, instead of deciding on your own after performing due diligence. 

Cons for Borrowers:

Bad credit? It still won’t be easy 

You’ll probably find that with P2P lending you have an easier time getting a loan with poor credit than you would with a traditional bank. At the same time, you’ll probably pay for this by way of higher APRs, which could make it difficult to make your payments, potentially drawing you into further debt. Depending on the company, these APRs for people with bad credit can be very steep, even significantly higher than the interest on credit cards. 

Don’t forget the fees 

In addition to APR, with a P2P loan you’ll also have to pay origination fees, which can hover around 4% to 5% depending on the company and your credit score. These fees are typically deducted from the loan amount, which can offset the amount of money you’re actually getting. In addition, you’ll probably face additional fees for late or failed payments.

What Types of P2P Loans Are Available?

There are 4 main types of loans available with P2P lending, all of which are basically different forms of personal loans.

Unsecured personal loans

This is a very popular form of loan that borrowers often find to be less of a headache. An unsecured personal loan is one that doesn’t require you to put any collateral down to “secure” the loan. The good thing about this type of loan is that you don’t need to risk your house or car or some other form of valuable collateral, but this doesn’t come without a price. If you don’t secure the loan you stand to pay a higher APR, as you will be seen as a more risky borrower.

Secured personal loans 

If you do have collateral to put on your loan, then this may be your best option. With a secured personal loan you will have given the bank an insurance policy of sorts by way of your collateral. This will make you less of a risk for the bank, which should pay off for you by way of lower APR.

Debt consolidation loans

Done right, this can be one of the smarter, more financially-sound ways to use P2P lending to your advantage. If you have previous, high interest debts - such as credit cards or student loans - a P2P personal loan can be a great way to pay those loans off and consolidate your debt. It probably goes without saying though that this is only the case if the new loan has better terms. See what you can do to get the best terms possible, and a P2P loan to pay off those high-interest debts could really take the edge off.

Business loans

There are a number of options for entrepreneurs who are looking to get a business off the ground or just need some more cash flow to help their business soar. These can include Small Business Administration loans, microloans, and term loans, to name a few. With P2P lending you can also get a secured or unsecured personal loan which you can towards whatever it is your business needs.

Loans For Small Purchases, From Your Smartphone

One of the main draws for P2P lending is the customer experience, and the large number of lending companies consumers can choose from. Borrowers can shop interest rates without leaving the house and lenders can track their portfolio with a few clicks on their smart phone. Both lender and borrower can bid adieu to long lines at their local bank branch, where approval for a loan can take days rather than mere minutes on a P2P platform.

Lending companies make their money by charging fees to borrowers, taking a percentage of the loan repayments to investors, and collecting fees for defaulted loans, in addition to other service fees.

We recommend potential investors and borrowers read reviews of some of the industry’s top P2P platforms, including SoFi and LendingTree.

What to Consider:

Hidden Fees

Although P2P lending provides significant advantages to both investors and borrowers, you still need to do your homework. One thing to note is there are fees involved – including origination fees - that can range from 0.5% to more than 5% of the loan. Be sure to read the fine print and fully understand the total cost of the loan by the time it’s paid off.

Some lending companies charge contributions to “bad-debt provision funds” – which are set aside to help protect the lending company from losses. Because the loans are taken out with no collateral, P2P companies can sell the defaulted loans to a collection agency or take out a court order against the borrower.

Rise in Interest Rates

An average interest rate of a peer-to-peer loan is roughly 15% but if you have fantastic credit you can get rates as low as just over 5%. That said, those with poor credit can get stuck with much higher interest rates – as high as 30.99% for the riskiest borrowers at LendingClub – an industry leader.

Experts believe that if interest rates continue to increase, the industry could see higher costs for borrowers – and better returns for investors – perhaps leading to a bubble in the industry. Regardless, average interest rates on P2P loans are not likely to exceed those of credit cards, and as long as the economy is doing well and unemployment remains relatively low, the number of defaults shouldn’t raise any red flags.

Loan Term

Most peer-to-peer loans are only three to five year, fixed monthly payments, though many loans are stretched out over a longer period, with lower monthly payments and higher interest rates. This is yet another reason these loans are becoming favored - low interest with a fixed term for the repayment.

Bad Credit

Prior to 2008, lenders were focused on borrowers with credit scores over 640. Today, some P2P sites welcome borrowers with scores as low as 580, though they stand to pay higher interest rates than lower risk borrowers. In addition, some of the top peer-to-peer lenders look beyond just your credit score, factoring in considerations such as work history.


In 2008 the Securities and Exchange Commission began to regulate the P2P industry and on the borrower side, agencies such as the Consumer Financial Protection Bureau and Federal Trade Commission now regulate the P2P industry. P2P platforms are subject to the same federal rules that govern all consumer credit company such as Equal Credit Opportunity Act and Fair Debt Collection Practices Act and borrowers are protected by state regulations against misleading advertising and discriminatory practices.

In 2016, growth for the P2P industry began to stumble under heightened regulation, leading many financial analysts to question predictions that the online lending platform poses a threat to traditional banking. Nonetheless, the industry is still on the rise and P2P loans remain an inexpensive way to consolidate a debt with a loan. We just want you to make sure that it is something you are prepared for and ready to face head-on.

So, What’s Next?

It’s up to you to determine if a peer-to-peer loan is the right way for you to get on the road to pay-off your debts or a ticket to higher returns on investment than your bank account or CD. If you compare peer-to-peer loans that are available and do some homework you can take part in an industry that is user friendly and has great potential for reward – all from the comfort of your home. For more information on P2P loan companies, read our reviews of top companies.

APR Rates

The APR calculation on personal loans varies according to lender, but the rates on these loans are generally lower than what you would typically receive from a payday loan, starting at 10% and capping at 35.99%

APR rates mentioned include associated fees.

Full repayment for the loans displayed range between 61 days to 180 months.

Representative example: assuming a loan of $10,000 over 60 months at a fixed rate of 3.1% per annum and fees of $60.00. This would result in a representative rate of 3.3% APR, with monthly repayments of $180.80, for a total amount paid of $10,848.00.

* LightStream Terms and Conditions:

Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of 3 years would result in 36 monthly payments of $303.99. © 2020 Truist Financial Corporation. SunTrust®, Truist, LightStream®, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners. Lending services provided by SunTrust now Truist Bank.

*  Marcus By Goldman Sachs® Offer Terms and Conditions:

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. You may be required to have some of your funds sent directly to creditors to pay off down certain types of outstanding unsecured debt. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans. Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions

* LendingClub Terms and Conditions:

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 7.95% to 35.89%. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 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 the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. 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 website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 9410

* Eloan Terms and Conditions: 

Rates from 7.99% up to 19.49% APR. Your APR will be determined based or your risk score and credit history. Loans start from $2,000 up to $35,000. The loan amount will be subject to credit approval. Eloan is a Division of Banco Popular de Puerto Rico. Subject to credit approval and meeting the parameters set forth by Banco Popular de Puerto Rico (“Banco Popular”). This offer applies to personal loans without collateral. Offer subject to presenting evidence and verification of acceptable income to Banco Popular. Banco Popular may deny your application if you do not meet the parameters and the established conditions. Other terms and conditions may apply.

‡ Upgrade Terms and Conditions:

Personal loans made through Upgrade feature APRs of 7.99%-35.97%. All personal loans have a 2.9% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's lending partners. Information on Upgrade's lending partners can be found at