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Best peer-to-peer (P2P) loans

Best peer-to-peer (P2P) loans
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AP Buyline’s content is created independently of The Associated Press newsroom. We might earn commissions from links in this content. Learn more about our policies and terms here.

Eric Rosenberg
Updated February 26, 2024

Peer-to-peer lending connects individual lenders and borrowers to facilitate loans without a bank acting as a middleman. Peer-to-peer loans are not right for everyone, but they may offer more favorable interest rates and other unique benefits compared to traditional bank loans. Here’s a look at some of the best peer-to-peer loan providers and top alternatives that may fit your borrowing needs well.

LenderBest forLoan sizePayback periodAPR
Traditional peer-to-peer lending
$2,000 to $50,000
2 to 5 years
6.99% to 35.99%
Debt consolidation
$1,000 to $40,000
3 to 5 years
9.57% to 35.99%
Business loans
Up to $500,000
6 months to 7 years
Not published
P2P alternative
$1,000 to $50,000
3 or 5 years
6.4% to 35.99%
Fair credit
$2,000 to $35,000
12 to 60 months
9.95% to 35.99%
Customer experience
$5,000 to $40,000
2 to 5 years
11.72% to 17.99%
Excellent credit
$5,000 to $100,000
24 to 144 months
7.49% to 25.99%
Low fees
$5,000 to $100,000
2 to 7 years
8.99% to 25.81%

Best peer-to-peer (P2P) lenders

If you think a peer-to-peer or similar loan could make sense for your borrowing needs, here's a look at our picks for the best peer-to-peer lenders.

Prosper

Traditional peer-to-peer lending
Prosper

Prosper

Traditional peer-to-peer lending

Prosper

Best for
Traditional peer-to-peer lending
Loan size
$2,000 to $50,000
Payback period
to 5 years
APR
6 to 3.99%5.99%

Prosper is one of the oldest peer-to-peer lending companies and remains a top choice for crowdsourced loans. If approved, you can borrow up to $50,000 through Prosper with two to five years payback terms. If you have good credit, interest rates are very competitive. However, lower-credit borrowers may pay very high rates above 30% APR.

While there are no prepayment penalties, an origination fee of 1% to 7.99% applies, which is a big downside compared to competing loan options. Late fees may also apply if you miss a payment due date. Funds may be available one business day after approval.

Lending Club

Debt consolidation
Lending Club

Lending Club

Debt consolidation

Lending Club

Best for
Debt consolidation
Loan size
$1,000 to $40,000
Payback period
3 to 5 years
APR
9.57% to 35.99%

Lending Club is another traditional peer-to-peer lender but converted to funding loans directly instead of crowdfunding. It's good for smaller loans, with a $1,000 minimum. It's also a solid choice for credit card debt consolidation, as it will pay off your credit cards with loan proceeds. If you qualify for a lower interest rate from Lending Club that you pay for your credit cards, that can be a financially savvy move.

You can check your rate without impacting your credit score, and the application process is streamlined and easy to do from your computer or smartphone. Be aware of a steep 3% to 8% origination fee. There's no prepayment penalty.

Funding Circle

Business loans
Funding Circle

Funding Circle

Business loans

Funding Circle

Best for
Business loans
Loan size
Up to $500,000
Payback period
6 months to 7 years
APR
Not published

Funding Circle is a business lender offering term loans and lines of credit. It's also a facilitator of government-backed SBA loans. For business term loans, qualifying businesses can receive up to $500,000 in funding with payment terms of six months to seven years. Rates are reportedly competitive but are not available unless you apply.

Businesses may be approved in as little as 24 hours and receive funds as quickly as two days after applying. If you opt for a line of credit, which works more like a credit card, you can borrow up to $250,000 with same-day funding where available.

Upstart

P2P alternative
Upstart

Upstart

P2P alternative

Upstart

Best for
P2P alternative
Loan size
$1,000 to $50,000
Payback period
3 or 5 years
APR
6.4% to 35.99%

Upstart offers personal loans and auto refinancing loans. It's a very quick lender, offering you the option to check your rate in five minutes without impacting your credit score and get funded as quickly as the next business day. In addition to your credit score, Upstart evaluates other factors, such as your education and employment, when approving applications.

Borrowers with good credit could get competitive interest rates, but some borrowers may qualify for high rates over 30% APR. Upstart offers loans for $1,000 to $50,000 with three or five-year terms. There's no prepayment penalty, but origination fees apply. 

Avant

Low origination fee
Avant

Avant

Low origination fee

Avant

Best for
Low origination fee
Loan size
$2,000 - $35,000
Payback period
12 to 60 months
APR
9.95% - 35.99%

Avant is an online lender offering fast loan approvals and may be suitable for borrowers with less-than-perfect credit scores. Avant loans are offered from $2,000 to $35,000 with 12 to 60-month terms. APRs are not the lowest around, but depending on your credit history and finances, you may qualify for the best rate possible for your situation with Avantsup.

Avant features a quick application and gives you rate options without impacting your credit score. If approved, you can get funding as quickly as the next business day. Be aware of an "administration fee," essentially an origination fee, of up to 4.75%.

Happy Money

Customer experience
Happy Money

Happy Money

Customer experience

Happy Money

Best for
Customer experience
Loan size
$5,000 to $40,000
Payback period
2 to 5 years
APR
11.72% to 17.99%

Happy Money is an easy-to-use online lender offering what it calls The Payoff Loan. The loan is designed specifically for credit card payoffs. You can borrow $5,000 to $40,000 if approved with two to five-year payoff periods. Be aware that interest rates can be high, and it's usually only a good idea to refinance credit card debt with a lower interest rate.

Getting your rate takes about two minutes. There's an origination fee of 1.5% to 5.5%, which is a drawback. According to Happy Money, the average customer experiences a 40-point increase in their FICO credit score, which can help you qualify for lower-rate loans in the future.

LightStream

Good credit
LightStream

LightStream

Good credit

LightStream

Best for
Good credit
Loan size
$5,000 - $100,000
Payback period
24 to 144 months
APR
7.49% - 25.49%

LightStream offers personal loans with competitive rates, particularly for borrowers with good or excellent credit. And thanks to its rate beat program, it guarantees you the lowest interest rate you can get, beating comparable loans by 0.10%. In addition to credit history, LightStream applications include your assets and debt-to-income ratio.

Loans are available from $5,000 to $100,000 with terms from two to 12 years. As of this writing, interest rates were 7.49% to 25.99% APR. There are no origination fees, prepayment penalties or late fees. It's a top choice for personal loans for qualifying applicants.

SoFi

Low fees
SoFi

SoFi

Low fees

SoFi

Best for
Low fees
Loan size
$5,000 to $100,000
Payback period
2 to 7 years
APR
8.99% to 25.81%

SoFi is an online bank --- technically not a peer-to-peer lender --- that offers personal loans for $5,000 to $100,000 with payoff terms of two to seven years. SoFi had its roots in peer-to-peer lending, however, as its original capital came from community investors (in this case they were University of Stanford business school alumni). Interest rates are competitive but not the very best we reviewed. They come with no fees, including origination fees, prepayment penalties and late payment fees.

A unique feature of SoFi personal loans is the unemployment protection benefit. If you lose your job, SoFi may modify your payments and offer job search assistance to help you land your next role. You can get your interest rate without impacting your credit score.

How to choose a peer-to-peer lender

When selecting a peer-to-peer (P2P) lender, prioritize their interest rates and fees. Lower rates can save money, but watch out for hidden fees like origination or prepayment penalties.

Consider the repayment terms offered by P2P lenders. Choose terms that suit your financial situation, and ensure the loan conditions are straightforward. Remember that a lower monthly payment and longer repayment period could be more costly in the long run.

Finally, consider the speed of fund disbursement and the lender's customer service reputation. Quick access to funds and a positive customer experience are essential for a smooth borrowing process.

How to apply for a peer-to-peer loan

If you're ready to apply for a peer-to-peer loan, follow these steps:

Find the right lender

Research various peer-to-peer lenders, comparing rates, fees, repayment terms and customer reviews. Choose a lender that aligns best with your financial needs and goals.

Complete the loan application

Fill out the lender's application form, typically online, providing personal and financial details. This may include your income, employment status and credit history.

Review and accept terms

Once your application is approved, the lender will present you with loan terms. Carefully review these, paying close attention to the interest rate, fees, repayment schedule and any penalties. If acceptable, accept the terms to proceed.

Funding

After accepting the terms, the lender will process the loan. The funds will be deposited into your account, usually within a few days. This timeframe can vary depending on the lender.

Repayment

Begin making regular payments as per the agreed schedule. Ensure timely payments to avoid late fees and maintain or improve your credit score. Keep track of your repayment progress until the loan is fully paid off.

When should you get a peer-to-peer (P2P) loan

Peer-to-peer loans can be a reasonable choice when traditional loans are not an option, or you think you can get better terms from a P2P loan. They are particularly beneficial for borrowers with good credit who can secure lower rates or for those who need funds quicker than what traditional banks typically offer. P2P loans are also worth considering for debt consolidation or funding personal projects where a structured repayment plan is desirable.

However, it's important to recognize that P2P loans are not always the best option. They can come with higher interest rates for those with less-than-stellar credit. Additionally, the fees and loan terms can vary significantly between lenders. Evaluating your financial situation, comparing options and considering alternatives like credit unions or personal savings is crucial before deciding on a P2P loan.

Peer-to-peer (P2P) loan alternatives

If you are not sure P2P loans make sense, consider these alternatives:

  • Savings: Utilizing personal savings to cover expenses, and avoiding interest and debt, is the best option when you have funds available. 
  • Credit cards: Leveraging credit cards, especially those with low or 0% introductory APR offers, may give you access to funds without the long-term commitment of a new loan.
  • Home equity loans: Borrowing against home equity, often with lower interest rates than unsecured loans, is a reasonable option for some homeowners.
  • Holding off on the expense: Delaying the purchase or expense until funds can be saved or the financial situation improves.

Methodology

To pick the best peer-to-peer loans, we reviewed a long list of peer-to-peer lenders and alternatives. Our primary focus was interest rates, fees and repayment terms. We also looked at time to funding and the overall customer experience.

When looking for a peer-to-peer loan for your financial needs, it's important to consider the costs and your ability to repay the loan as agreed.

Frequently asked questions (FAQs) 

Who is the biggest P2P lender?

The biggest peer-to-peer lender changes over time. Historically, Prosper and Lending Club were among the largest P2P lenders.

What credit score do you need for a P2P loan?

The credit score requirements for peer-to-peer loans vary by lender. If you don't get approved, you may want to shop around to find the best option.

Who bears the risk in P2P lending?

In peer-to-peer lending, the individual lenders take on the risk of losses if the borrower fails to repay as agreed.

AP Buyline’s content is created independently of The Associated Press newsroom. We might earn commissions from links in this content. Learn more about our policies and terms here.