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Best Peer-to-Peer Personal Loans in December 2024

Best peer-to-peer personal loans
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updated: September 10, 2024
edited by Mary Hall

If you need a loan and want an alternative to traditional banks, the peer-to-peer marketplace might be for you—especially if you have credit that’s either excellent, or poor.

Peer-to-peer (P2P) lending, first introduced in the early 2000s, is a type of loan where individual investors lend money to borrowers through a dedicated platform, outside of a traditional financial institution. It became an attractive option for borrowers with no credit history, a low credit score, or who need funds fast for an emergency expense.

But beware—with P2P lending, interest rates tend to rise with the loan amount. And often, these rates can exceed those of credit cards or other types of consumer debt.

Today most peer-to-peer platforms have shifted to a traditional lender model, but a handful still exist. Here are the best available today, what each offers, and some alternatives to consider.

Our recommendations for the best peer-to-peer personal loans

Best for High borrowing limits
Prosper

Prosper Peer to Peer Personal Loans

Best for High borrowing limits

Prosper Peer to Peer Personal Loans

APR
8.99% to 35.99%
Loan amount
$2,000 to $50,000
Payoff period
2 to 5 years
Credit score required
600+

Introduced in 2005, Prosper was the very first peer-to-peer marketplace in the U.S. It currently offers personal loans between $2,000 and $50,000 to borrowers in all 50 states, with repayment terms from two to five years. You can check your rate and get pre-approved online without affecting your credit, and, once approved, get your funds in as little as one business day.

Prosper personal loans do have an origination fee that ranges from 1% to 9.99%, increasing the cost of your loan. There’s also a very wide range of potential interest rates. Depending on your credit score and what rate you qualify for, you could wind up paying as much as 35.99% on your loan—as much as (if not more than) a credit card.

Pros:

  • Borrow up to $50,000
  • Funding as soon as one business day
  • Check rates without affecting your credit

Cons:

  • Origination fee applies
  • Good credit required
  • Very wide range of interest rates
Best for Easy debt consolidation
LendingClub

LendingClub Peer to Peer Personal Loans Credible

Best for Easy debt consolidation

LendingClub Peer to Peer Personal Loans Credible

APR
8.98% to 35.99%
Loan amount
$1,000 to $40,000
Payoff period
2 to 5 years
Credit score required
600+

LendingClub is a fintech marketplace that offers a variety of financial products, including personal loans. Loan limits range from $1,000 to $40,000, with repayment terms between two and five years. LendingClub is especially useful for paying off or consolidating existing debt, since it will disburse funds directly to creditors in its payment network.

You can check your rate and even get pre-approved without affecting your credit, though borrowers will need to have good credit (roughly a 600 credit score or higher). There is an origination fee between 1% and 8% of the borrowed amount, increasing your total loan costs. Interest rates start out competitive but can be very high at the top end, rivaling credit cards or other forms of consumer debt.

Pros:

  • Wide range of borrowing limits
  • Funds can be sent to creditors directly
  • Rate check won’t affect your credit

Cons:

  • Origination fee applies
  • Interest rates can be very high
  • Good credit is required
Best for Low (or no) credit score
LendingClub

Upstart Peer to Peer Personal Loans Credible

Best for Low (or no) credit score

Upstart Peer to Peer Personal Loans Credible

APR
7.8% to 35.99%
Loan amount
$1,000 to $50,000
Payoff period
3 or 5 years
Credit score required
No history or 300+

Upstart offers personal loans of up to $50,000 to borrowers who qualify, with funding as quickly as one business day. Getting pre-approved online and checking your rate is easy, and the process won’t affect your credit. Unlike other marketplaces, these loans are in reach for borrowers with a credit score as low as 300. You can even get a loan with no credit history or score. That’s because Upstart’s AI model considers other factors, such as education or employment. 

However, repayment terms are limited to three or five years. Upstart’s origination fee can be as high as 12%, and as low as 0% for some borrowers. Interest rates are competitive on the low end but go as high as 35.99%.

Pros:

  • No credit score required
  • Fast funding
  • Rate check won’t affect your credit

Cons:

  • Limited repayment terms
  • High potential interest rates
  • Origination fees may apply

Best peer-to-peer personal loans compared

LenderBest forAPRLoan amountPayoff periodCredit score required
Prosper
High borrowing limits
8.99% to 35.99%
$2,000 to $50,000
2 to 5 years
600+
LendingClub
Easy debt consolidation
8.98% to 35.99%
$1,000 to $40,000
2 to 5 years
600+
Upstart
Low (or no) credit score
7.8% to 35.99%
$1,000 to $50,000
3 or 5 years
No history or 300+

Tips to compare peer-to-peer loans

When considering whether to get a peer-to-peer loan, you should compare them to other types of consumer debt, using the following features as guidelines:

  • Borrowing limits: The best lender may depend on how much you need and how you plan to use the money.
  • Interest rate: The lower your interest rate, the less you’ll pay over the course of your loan’s repayment. Try to secure the best interest rate possible.
  • Repayment terms: Your loan’s terms will dictate how much you pay each month over the course of your repayment. Be sure to calculate how much you can afford to pay monthly.

Alternatives to peer-to-peer loans

Not sure whether a peer-to-peer loan is right for you? Here are some other options to consider.

  • Traditional personal loan: While P2P and personal loans are very similar, the platforms that offer them differ. In some cases—especially for creditworthy borrowers—taking out a personal loan through a traditional lender will be more affordable.
  • Pull from savings: By drawing on your savings instead of borrowing, you can save hundreds, or even thousands of dollars in interest without affecting your credit.
  • Borrow from your credit line: If you have access to an existing line of credit, you may be able to borrow money at a lower interest rate, without having to apply for a new credit product.

More about peer-to-peer loans

Want to know even more about peer-to-peer loans? Here’s a breakdown.

What is a peer-to-peer loan?

A peer-to-peer loan is a type of loan where individual investors lend money to borrowers through a dedicated platform. While these marketplaces were a lot more common in the early 2000s, they have begun to phase out with many platforms opting for a traditional lender-borrower model.

How does a peer-to-peer loan work?

With a peer-to-peer loan, investors lend money to individual borrowers or small businesses. As those borrowers repay the debt, the investor recoups their investment, in addition to an agreed interest rate.

Peer-to-peer loans: Pros and cons

Pros:

  • Can be easier approval than a traditional bank
  • May have more flexible loan terms
  • Borrowers can use the funds for a variety of purposes

Cons:

  • Costly origination fees often apply
  • Interest rates can be high (or higher) than other forms of credit

How to apply for a peer-to-peer loan

The loan application process will depend on the platform you choose. In general, though, you’ll need to provide personal information such as your name, address, phone number, birthdate, and Social Security number. You may also need to provide an explanation, summary, or even projection of how those funds will be used, especially if you are planning a specific project.

TIME Stamp: Peer-to-peer is quick and easy, but consider costs

While peer-to-peer platforms were quite popular a decade or so ago, they are becoming less common. The P2P marketplaces that remain offer borrowers a way to access the personal funds they need quickly and efficiently, often with competitive rates and terms. But it’s still important for borrowers to calculate their total cost before committing, as rates and fees can be as high as with other forms of consumer debt.

Frequently asked questions (FAQs)

Is peer-to-peer lending safe?

As a borrower, peer-to-peer lending can be a safe borrowing method, as long as you choose a reputable platform. As an investor, it’s important to remember that all investing and lending comes with risk—so there is no guarantee that you’ll make money or even recoup the funds. However, lending on a reputable P2P site can give you peace of mind that you won’t be scammed.

How to pre-qualify for a peer-to-peer loan

In order to qualify for a peer-to-peer loan, you’ll need to meet the lender’s specific requirements. This often means being 18 or older, having a valid U.S. address, being a U.S. citizen, and having a minimum credit score and/or income. If you’re unable to qualify on your own, you may be able to add a creditworthy co-borrower. Many platforms allow you to pre-qualify online and check your rate without affecting your credit score.

What is the maximum amount for a peer-to-peer loan?

Loan amounts vary depending on lender limits and the characteristics of individual borrower. Some lenders, such as Prosper and Upstart, allow you to borrow up to $50,000.

What is the minimum credit score for peer-to-peer lending?

Most lenders want borrowers to have a good or great score, which often means 600 or higher. A few peer-to-peer lenders, such as Upstart, have minimum credit score requirements as low as 300, if they even require a score at all.

Can you invest and generate profits through peer-to-peer loans?

Some investors use P2P lending platforms to diversify their investment portfolios. And while many have profited, there are risks involved and you could lose your money. Never invest more than you can afford to los, and understand the level of risk involved and the timeframe of the investment (how long your money is tied up for.)

Can you get a peer-to-peer loan with bad credit?

Borrowers with bad credit may qualify for some peer-to-peer loans, depending on the platform and even the willing investors. However, borrowers with bad credit should expect to pay more in interest.

The information presented here is created by TIME Stamped and overseen by TIME editorial staff. To learn more, see our About Us page.

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