Best Peer to Peer Lending Platforms

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Contributor, Benzinga
August 16, 2023

Like every other sector, technological innovation in finance has transformed approaches to lending, borrowing and investing. In the past, suppose you needed a personal loan to pay off your car or credit card, finance large purchases, consolidate debt or cover an emergency expense. In that case, you'd go to a traditional lending institution (a bank or credit union) and talk with a loan officer who may say "yes" or "no" after crunching numbers. To invest, you'd also go through a traditional broker — online or in-person. However, that was in the past. 

Now, instead of banks or brokers, people can turn to each other via a peer-to-peer (P2P) lending platform. P2P lending platforms directly connect borrowers to lenders, eliminating the need for traditional institutions (big banks or credit unions) or traditional brokers. Many reasons make it smart to consider a P2P lending platform when borrowing or investing. Unlike most traditional lending institutions that mandate good or excellent credit as qualifying criteria, with fair credit or below, you can qualify for P2P borrowing. The availability of multiple lenders increases your chances of qualifying for a loan. And the best part is you'd be getting the loan at a better rate. 


The Best Peer-to-Peer Lending Platforms:

Additionally, by leveraging online functionalities, the underwriting process is streamlined. You can apply online in the comfort of your home and get a decision as fast. Loan disbursement only takes a few days once approved. Also, most P2P platforms offer provisional funds that can serve as leverage if you encounter problems after borrowing. Other benefits include more flexible loan terms, low origination fees, a wide range of loan amounts and a faster turnaround time than traditional or other personal loan providers. Most vitally for investors, P2P lending provides a relatively higher potential for return than other investments. 

So whether you're planning a wedding, trying to buy your dream home or finally want to do something about that business idea you've always had, P2P borrowing can help you fast-track that goal. However, with various P2P firms available, making a choice can be challenging. Benzinga evaluates P2P lending platforms to help borrowers and investors make better choices when choosing a P2P lending platform.

Best Overall: Upstart

Since its inception in 2012, Upstart has helped more than 2 million customers worldwide get much-needed and timely financial assistance. Upstart offers fixed-rate personal loans of up to $50,000 ($1,000 minimum). Its comprehensive loan coverage means you can potentially leverage it to meet your financial obligations. These needs could include home improvements, medical bills, moving, higher education, travel, a wedding, debt consolidation and business startup or expansion. 

Upstart supports car loan refinance at competitive rates and zero prepayment fees. However, you require at least a good credit score to guarantee loan approval. When evaluating loan worthiness, the platform's unique artificial intelligence/machine learning (AI/ML) technology looks beyond traditional data such as applicants' credit reports, income, assets and debts. Instead, it factors in your education, study area, and employment history. 

There's no minimum educational attainment or collateral requirement as an eligibility criterion. You only need proof of regular income, a social security number and a U.S. bank account to qualify. This feature allows for an expansion of credit access to borrowers with little or no credit history. More than two-thirds of the company's underwritten processes are AI-powered. It facilitates efficient and ultra-fast application review and processing — not more than one business day. Upstart investing is also intuitive. You can automate by selecting specific investment strategies and depositing funds. 

You can set up a self-directed IRA account and invest in exchange-traded funds (ETFs), stocks, bonds and other asset classes besides Upstart notes. Upstart loans come with origination fees of up to 12% and don't accept co-signers. The platform lacks in-person support — it is strictly online.

APR rates vary by state and are made available to borrowers via personalized quotes. Upstart’s flexible yet comprehensive loan coverage, easy application process, efficient processing time, ultra-fast approval and potentially high returns undoubtedly make it the best overall P2P lending for peer lending investors and borrowers.


  • The platform is rather large, giving you the option to manage quite a bit of your finances all in one place, including any personal loans you might need
  • The FAQ section allows you to search for any information you need to get even faster answers to your questions


  • Rates could tend to be higher than you might have expected

Best for Good or Excellent Credit: Prosper

Founded in 2005 and headquartered in San Francisco, California, Prosper has been matching borrowers seeking personal loans with investors for almost two decades. It is not just the oldest P2P lending platform in the U.S. but also a formidable pioneer, having facilitated over $20 billion in loans to more than a million trusted customers. Its extensive list of peer-to-peer lenders affords creditworthy borrowers access to loans at competitive rates.

Besides the flexible personal loan ($2,000 to $50,000) that you can leverage for various financial purposes from debt consolidation to regular household expenses, Prosper also offers a home equity line of credit (HELOC) for those who wish to leverage the equity in their homes. However, you can start with a personal loan and handle your debts or emergencies rather simply.

To qualify for Prosper P2P loans, borrowers must have some form of verifiable income, a credit score of at least 600 and no bankruptcies in the last 12 months. Loans made through Prosper are amortized, which means borrowers pay a set monthly amount over the loan's 2 to 5-year term. Each payment consists of principal, interest and any other costs that might be necessary. Per their pro rata share of the loan, investors receive a portion of these payments. 

Although a FICO credit score of 600 (Fair) is the minimum allowable, the company's loan underwriting process is programmed to automatically assign the best terms and rates to applicants with the best credit score or history. The better your creditworthiness, the more your loan investment appeal to peers. 

APRs could get into the mid 30s, with the lowest rates going to the most creditworthy borrowers. There's also an originating fee that could be as high as 5%. Your loan may be subject to check payment fees, late fees and insufficient funds fees, depending on your situation. Prosper allows you to apply with a co-applicant to meet its loan requirements if you don't qualify for a personal loan. Sign-up is hassle-free; you get personalized quotes and rates in under a minute after filling in a questionnaire. And upon approval, you'll receive your loan funding directly to your bank account within one business day.


  • You can choose from riskier or more conservative borrowers if you’re investing in loans
  • The platform explains that you will receive the loan amount minus the origination fee
  • Qualification requirements have relaxed over time


  • The platform can charge high rates in some cases, making it more difficult to get a good return if you are saddled with a rate that could reach around 35%

Best for Fair Credit: LendingClub

Launched in 2007, LendingClub is another industry pioneer. It is America's largest lending marketplace and an industry leader in P2P lending, having facilitated over $70 billion in loans to more than 4 million borrowers. 

Borrowers can access a personal loan up to $40,000 maximum. Loans carry terms of up to 5 years, and an origination fee of 3% to 8%. The site even has a calculator that lets you see how much you can borrow and how the fees will pan out over the life of the loan.

Remember, the APR depends on your credit score, the amount you want to borrow and your total DTI ratio. The personal loan is flexible and non-restrictive — you can use it to sort out any financial challenges, from home improvement to weddings. Other perks include co-applicant support, automatic monthly payments, zero prepayment penalties and excellent customer support.

Auto refinancing is also available, if you feel that’s a good idea for you at the present time.

LendingClub's unique underwriting process matches rates and fees based on the applicant's credit score. Unlike other P2P lending outfits, these range from fair to excellent. Additionally, while the company might charge relatively high starting interest rates and origination fees, borrowers with poor credit scores can score lower rates and fees. This feature makes the platform an excellent option for those with fair credit looking to enjoy the full benefits that a P2P platform has to offer.

Individual investors can get started with $25 spread across diverse risk profiles called notes. Loan picking is automated, meaning you don't have to bother about finding loans that fit your specific criteria. Additionally, you can access vital educational resources to help your investment journey.


  • You can let the platform know what kinds of loans you want to buy into
  • The loan calculator makes it much easier for you to understand the implications of a particular loan
  • You can start with very small loans as an investor, mitigating your risk and allowing you to learn the platform


  • The platform is quite helpful for investors, but you must remember that you can be at the mercy of borrowers at times
  • Origination fees might be much higher than competitors

What to Look for in a Peer-to-Peer Platform

When looking for a P2P network, you must consider a few things to ensure you choose a platform that'll meet your core needs. Here are the things you need to factor in if you want to be a participant in a lending network, especially when you’re dealing with consumer and business loan options.

Customer Service

Reliable customer service is invaluable to you as a P2P borrower. Most P2P platforms offer most of their services online, so technical difficulties and glitches are almost unavoidable. Moreover, good customer service is critical for occasionally resolving other issues you might encounter. Thus, you must ensure that your P2P network has comprehensive and reliable customer support before anything else.

Industry Reputation

A good name is better than silver or gold. This sentiment extends to P2P firms. A high reputation in the industry tells you that the company has a solid track record. Typically the older the company, the higher its experience and expertise. You can use the Better Business Bureau as a guideline to determine the service worthiness of a company. The higher the BBB rating, the more reliable the organization usually is.

Terms and Fees

Another factor you should look out for and compare when choosing a P2P lender is its loan terms and fees. Most personal loans have terms of five years or less. The longer your term, the higher your interest rates and overall payment costs and vice versa, but the lower your monthly payment. 

The fees range from APR fees to origination charges and repayment penalties. Typically, with most online P2P platforms, your rates are determined by your credit score, income, debt history, selected terms and underwriting process. While some companies charge origination fees, late fees and repayment fees, others don't. When you're looking to patronize a P2P company, you must ensure that you properly consider these factors to reflect your bottom line. 

Loan Disbursement Time

After approving your application, some lenders will disburse your loan as quickly as the following business day. However, other lenders may take several days or more, which can be an issue with marketplace lending. Make sure to choose a lender that offers speedy loan disbursement, especially if you need the money immediately.

Customer Protection Policies

If you're a lending investor, you'll want to patronize a P2P lending platform with good customer protection policies. These policies should clearly show the company tackles fraudulent transactions and identity theft in worst-case scenarios. This feature ensures that your money is safe and secured. It will allow you to distinguish between a reliable platform provider and unreliable or incompetent competitors.

Benefits of a Peer-to-Peer Lending Firm

Both investors and borrowers alike stand to gain from using a P2P service. Let's review some of these benefits.

Faster and Highly Efficient

P2P services are online-based enterprises, so the entire process from loan application to review and approval is streamlined. This feature makes for efficiency. Most often, P2P lending site already have a list of investors ready to lend money to the right borrowers. The time it takes for borrowers to receive their funding can be short — sometimes only a few hours, which can help with emergent personal and small business loan concerns.

Lower Rates 

Unlike traditional loan offerings, borrowers can enjoy up to 40% lower rates with P2P companies. Because online P2P applications remove the need for a middleman and directly connect borrowers to lenders, extra fees that would otherwise be incurred with the extra party are eliminated. Lenders and borrowers get to enjoy more favorable rates compared to what traditional institutions have to offer.

Higher Returns for Investors

P2P platforms offer investors more significant returns in comparison to other investment alternatives. Because of greater lender competition and reduced origination fees, P2P loans usually come with lower rates. P2P loans can offer higher and more competitive rewards than traditional savings or investment accounts, and P2P investing helps you diversify if you already have a robust portfolio. Also, P2P investing is something good you can do for your fellow man, opening up another loan option with a reasonable repayment term for anyone using the platform.

Zero Impact on Credit Score

Securing personal loans through P2P platforms has become easy and intuitive. P2P platforms can easily make a soft inquiry into your credit history, which doesn't reflect on your FICO report. Getting a personalized quote with no impact on your credit score allows for an improved and optimized user experience since you can now have as many insights and perspectives on your prospective loan as you need or want without worrying about your credit rating.

Frequently Asked Questions


Is P2P lending a good idea?


Yes, P2P is an excellent choice for borrowers looking for non-traditional financing alternatives and investors looking to diversify their portfolios.


Can I be a P2P lender?


Yes, you can be a P2P lender. Like any other investment, with P2P lending, you’re providing your funds to invest in investment portfolios. However, in P2P lending, the investment portfolio is the borrower.


Can a personal loan help fix my finances?


No singular financial move can “fix” your finances. However, a personal loan might help you consolidate debt, refinance or otherwise manage your money better than you are right now. Moreover, you might use these loans to pay for a range of unexpected or large expenses.