Best peer-to-peer lending of November 2023
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BLUEPRINT
Updated 2:14 p.m. UTC Nov. 9, 2023
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Unlike taking out a traditional loan, peer-to-peer (P2P) lending lets you borrow money directly from individual investors rather than from a financial institution. Because this cuts out the middleman, it can be easier to qualify for a P2P loan compared to a loan from a conventional lender.
The best P2P lending provides competitive interest rates, a variety of loan amounts, relatively long repayment terms and more lenient credit score requirements. Some also don’t charge late fees and offer fast funding times.
To determine the best P2P lending, we compared 25 personal loan lenders by these metrics along with other factors like state availability and customer service experience as well as co-signer or co-borrower acceptance.
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Prosper
: Best overall
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Avant
: Best for poor credit
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Happy Money
: Best for credit card consolidation
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Upstart
: Best for thin credit
Best P2P lending
Prosper
Avant
Happy Money
Upstart
Compare the best P2P lending
Methodology
Our expert writers and editors have reviewed and researched 25 popular lenders to help you find the best peer-to-peer lending. Out of all the lenders considered, the four that made our list excelled in areas across the following categories (with weightings): loan details (20%), loan cost (31%), eligibility and accessibility (24%), customer service (15%) and ease of application (10%).
Within each major category, we considered several characteristics, including APR ranges, loan amounts, maximum repayment terms, minimum credit score requirements, funding time and lender discounts as well as late payment and prepayment penalties. We also evaluated each provider’s customer support options, customer reviews and co-signer or co-borrower acceptance.
Why some lenders didn’t make the cut
Of the 25 personal loan lenders that we reviewed, only a fraction made the cut. The lenders that didn’t have high enough scores to be included mainly received lower ratings due to not offering P2P lending. Some also had stricter credit score requirements or poor customer reviews.
How P2P lending works
With traditional lending, borrowers will ask a financial institution — such as a bank or credit union — for money. P2P lending, on the other hand, connects borrowers directly with private investors who fund the loans and has less stringent eligibility requirements as a result.
P2P loans are typically offered through online platforms that match potential borrowers with investors. These platforms generally handle the entire lending process, such as accepting applications, determining rates, collecting fees and managing repayment — meaning you don’t usually interact with the investor or group of investors who fund your loan.
This kind of lending can be beneficial for both the borrower and the investor. “The value is [that] the borrower gets the funds they need, and the investor can get a return on their money,” says financial coach Jonathan Thomas.
In general, there’s much less risk in P2P lending for a borrower compared to an investor. This is because there’s always a chance that the borrower won’t repay a P2P loan, and while the lending platform can help with attempting to recover the funds, there’s no guarantee that the investor will get their money back.
Because of this increased risk for investors, P2P loans can come with “higher fees on top of the interest rate and a higher interest rate than banks or credit unions,” says Thomas.
Also keep in mind that like defaulting on a traditional loan, failing to repay a P2P loan can result in severe damage to your credit, being sent to collections or even being sued by the lender.
How much you can borrow with a P2P loan will vary by lender. For example, you can borrow as little as $1,000 up to $50,000 with Upstart.
Your loan amount will also depend on your individual qualifications. In many cases, you’ll need good to excellent credit to get approved for the highest available amounts.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
