Best Peer-to-Peer Lenders 2022

ElitePersonalFinance
Last Update: July 1, 2022 Loan Reviews Loans

Peer-to-peer (P2P) lenders source funds from investors and use the proceeds to issue loans, while traditional lenders rely on consumer deposits to provide financing. Therefore, P2P lenders are middlemen between you and the institution or individual providing the loan.

Most P2P lenders require a credit score of around 600. However, Upstart’s AI-driven algorithm approves borrowers with credit scores of at least 300. As a result, new technology has streamlined lenders’ underwriting practices, increasing your chances of obtaining a loan. Furthermore, the P2P lenders on our list provide upwards of $250,000., with max APRs of 35.99%.

However, if your credit score is exemplary, we reviewed more than 20 good credit personal lenders that may offer cheaper financing. Similarly, several options are available for borrowers with poor credit. We reviewed more than 20 bad credit personal lenders with 35.99% or less APRs, and some don’t charge loan origination fees.

Our marketplace also has many options for borrowers with very bad, bad, fair, good, and excellent credit. Moreover, applying does not require a commitment and won’t impact your credit score. Therefore, submitting multiple applications should increase your chances of landing the best deal.

The Best Peer-to-Peer (P2P) Lenders 2022

P2P lenders make it easier to obtain financing since outside investors fund loans. And companies like Prosper, LendingClub, and Upstart won’t worry about solvency. As a result, they can match investors’ risk tolerances with borrowers’ credit scores to create the perfect combination. You can see a quick overview of P2P lenders’ terms below. For more information, please read the reviews that follow.

Lender: Loan Amount: APR: Min. Credit Score: Best For: Type:
Even Financial $1,000 – $250,000 2.49% – 35.99% 550 Obtaining the best APR Connects to peer-to-peer lenders
SuperMoney $600 – $100,000 4.99% – 35.99% 600 Comparing multiple offers Connects to peer-to-peer lenders
PersonalLoans $1,000 – $35,000 5.99% – 35.99% 580 Short and long-term personal loans Connects to peer-to-peer lenders
Prosper $2,000 – $40,000 7.95% – 35.99% 640 Obtaining multiple personal loans Peer-to-peer lender
LendingClub $1,000 – $40,000 7.04% – 35.89% 600 Fair credit scores, low DTI ratios Peer-to-peer lender
Upstart $1,000 – $50,000 3.09% – 35.99% 300 Low credit scores, high DTI ratios Peer-to-peer lender
Peerform $4,000 – $25,000 5.99% – 29.99% 600 Fair credit scores, low DTI ratios Peer-to-peer lender
Happy Money $5,000 – $40,000 5.99% – 24.99% 550 A stable credit history Peer-to-peer lender
LendingTree $1,000 – $50,000 2.49% – 35.99% 600 Obtaining a low APR Connects to peer-to-peer lenders

Even Financial

Loan Amount: $1,000 – $250,000
APR: 2.49% – 35.99%
Min. Credit Score: 550
Approval: 1 – 7 Days
Terms: 2 – 7 Years
Fees:
  • Loan origination fees vary by lender
  • Late payment fees vary by lender
  • Most lenders don’t charge prepayment fees
Qualification Criteria:
  • Be at least 18 years of age
  • Have a credit score of at least 550
  • The maximum DTI ratio is often 43%
  • Have recurring employment income or government benefits
  • Fill out your information through Even Financial’s online portal
Average Borrower Profile:
  • Even Financial connects borrowers with personalized financial product offers from banks and other lenders
  • If you have bad, fair, good, or excellent credit, financing options are available
Best For: Obtaining the best APR
Check rates

Even Financial is another wide-ranging loan comparison site that partners with direct P2P lenders like Happy Money, Prosper, and LendingClub. Moreover, the company has relationships with more than 300 loan providers, so products are available for borrowers of all credit scores. Even Financial lets you personalize your search criteria and then shows you the products that have the highest chances of approval. Then, you can analyze the terms and conditions to determine if one of the options is right for you.

Loan amounts range from $1,000 to $250,000, with APRs of 2.49% to 35.99%, and terms of two to seven years. You can also apply for lines of credit, debt consolidation loans, and student and auto loan refinancing. In addition, companies like OneMain Financial, NetCredit, and OppLoans partner with Even Financial, so you can apply for financing if you have poor credit. Our guide on alternative loans reviews the 25 best companies.

Pros:

  • Lenders on Even Financial’s platform offer $1,000 to $250,000.
  • Competitive APRs range from 2.49% to 35.99%.
  • Even Financial’s search function makes it easy to find affordable loans.
  • Even Financial’s services should be available in all states.
  • Checking your rate won’t impact your credit score.

Cons:

  • Fees vary by lender.
  • Multiple offers can make it challenging to choose the best loan.

The impact of COVID-19:

Since Even Financial is a comparison site, it doesn’t issue loans directly. Moreover, the lenders on Even Financial’s platform determine their deferral and forbearance policies independently. As a result, you need to contact your lender directly to determine the available options.

SuperMoney

Loan Amount: $600 – $100,000
APR: 4.99% – 35.99%
Min. Credit Score: 600
Approval: 1 – 7 Days
Terms: 1 – 7 Years
Fees:
  • Loan origination fee of 1% – 8%
  • Late payment fees vary by lender
  • Most lenders don’t charge prepayment fees
Qualification Criteria:
  • Be at least 18 years of age
  • Have a credit score of at least 600
  • Have a DTI ratio that doesn’t exceed 40%
  • Have recurring employment income or government benefits
  • Fill out your information through SuperMoney’s online portal
Average Borrower Profile:
  • SuperMoney connects borrowers with personalized financial product offers from banks and other lenders
  • If you have fair, good, or excellent credit, financing options are available
Best For: Comparing multiple offers
Check rates

SuperMoney is a loan comparison site that partners with some top direct P2P lenders like LendingClub and Peerform. Traditional, online, and P2P lenders on SuperMoney’s platform provide $600 to $100,000, with APRs of 4.99% to 35.99% and terms of one to seven years. SuperMoney’s website is easy to navigate, and you can obtain personalized quotes with a few clicks. Moreover, a quick rundown of amounts, APRs, terms, and fees shows up on SuperMoney’s product page, making it easy to conduct a quick scan. The company notes that most of its partner lenders require a credit score of at least 600 and that the higher the credit score, the lower the potential APR.

In addition, SuperMoney loan origination fees range from 1% to 8%, and the lenders themselves determine other charges. However, the site can help you find the cheapest loan in the shortest amount of time.

Pros:

  • Lenders on SuperMoney’s platform offer $600 to $100,000.
  • Competitive APRs range from 4.99% to 35.99%.
  • SuperMoney’s search function makes it easy to find affordable loans.
  • SuperMoney’s services should be available in all states.
  • Applying does not impact your credit score.

Cons:

  • You incur a loan origination fee of 1% to 8%.
  • Late payment fees vary by lender.

The impact of COVID-19:

Since SuperMoney is a comparison site, it doesn’t issue loans directly. Moreover, the lenders on SuperMoney’s platform determine their deferral and forbearance policies independently. As a result, you need to contact your lender directly to determine the available options.

PersonalLoans

Loan Amount: $1,000 – $35,000
APR: 5.99% – 35.99%
Min. Credit Score: 580
Approval: 1 Day
Terms: 90 Days – 6 Years
Fees:
  • Loan origination fee of 1% – 5%
  • You may incur late payment fees after 15-day grace period
  • Most lenders don’t charge prepayment fees
Qualification Criteria:
  • Be at least 18 years of age
  • Have a credit score of at least 580
  • The maximum DTI ratio is often 43%
  • Have recurring employment income or government benefits.
  • Do not have a pattern of late payments, bankruptcies, or charge offs
  • Fill out your information through PersonalLoans’ online portal
Average Borrower Profile:
  • PersonalLoans connects borrowers with personalized financial product offers from banks and other lenders
  • If you have bad, fair, good, or excellent credit, financing options are available
Best For: Short and long-term personal loans
Check rates

PersonalLoans’ marketplace provides access to P2P loans, personal installment loans, and personal bank loans. You can borrow anywhere from $1,000 to $35,000, with APRs of 5.99% to 35.99% and terms of 90 days to six years. Inquiring only takes a few minutes, and qualified applicants see a list of suitable options. PersonaLoans notes that borrowers often prefer P2P loans “due to lower rates.” However, its network of lenders provides products for all types of borrowers, so alternative loans should be available if you have bad or very bad credit.

For personal installment loans, the minimum credit score requirement is 580. However, for P2P loans, lenders require a minimum credit score of 600. Moreover, you must be employed or self-employed with a minimum income of $2,000 per month to qualify. In addition, lenders’ loan origination fees range from 1% to 5%.

Pros:

  • PersonalLoans’ partners offer $1,000 to $35,000.
  • Competitive APRs range from 5.99% to 35.99%.
  • PersonalLoans’ search function makes it easy to find affordable loans.
  • PersonalLoans’ services should be available in all states.
  • Applying does not impact your credit score.

Cons:

  • You incur a loan origination fee of 1% to 5%.
  • Late payment fees vary by lender.

The impact of COVID-19:

Since PersonalLoans is a comparison site, it doesn’t issue loans directly. Moreover, the lenders on PersonalLoans platform determine their deferral and forbearance policies independently. As a result, you need to contact your lender directly to determine the available options.

Prosper

Loan Amount: $2,000 – $40,000
APR: 7.95% – 35.99%
Min. Credit Score: 640
Approval: 1 Day
Terms: 3 – 5 Years
Fees:
  • Loan origination fee of 2.41% – 5%
  • Late payment fee of 5% of the amount due, or $15, whichever is greater, after a 15-day grace period.
  • There are no prepayment fees
Qualification Criteria:
  • Be at least 18 years of age
  • Have a FICO Score of at least 640
  • Have less than five inquires into your credit profile over the last six months
  • Have a positive annual income
  • Have a DTI ratio that doesn’t exceed 50%
  • Have at least three open accounts listed on your credit report
  • Have not filed for bankruptcy over the preceding 12 months
  • Fill out your information through Prosper’s online portal
Average Borrower Profile:
  • Has a credit score of 714
  • Has a loan-to-income ratio of 5.34%.
  • Borrows $13,446
  • Incurs an APR of 13.49%
  • Has a DTI ratio of 16.90%
Best For: Obtaining multiple personal loans
Check rates

Prosper is a P2P lender with a minimum credit score requirement of 640. You can borrow anywhere from $2,000 to $40,000, with APRs of 7.95% to 35.99% and terms of three to five years. Applying creates a loan “listing” sent to P2P investors on Prosper’s platform. Then, offers roll in, and you can decide which lender and terms are right for you. You can also have more than one loan at a time, but your first loan must be in good standing, held for six months or more, and the total sum can’t exceed the $40,000 maximum. In addition, you can’t have any charge offs with Prosper or have been more than 15 days delinquent on loans obtained within the last 12 months.

Loan origination fees range from 2.41% to 5%, and late payment fees are 5% of the amount due, or $15, whichever is greater, after a 15-day grace period.

Pros:

  • Prosper offers P2P loans of $2,000 to $40,000.
  • Competitive APRs range from 7.95% to 35.99%.
  • You can repay the funds over terms of three to five years.
  • Borrowers in all states should be able to apply.
  • Applying does not impact your credit score.

Cons:

  • You incur a loan origination fee of 2.41% to 5%.
  • You incur a late payment fee of 5% of the amount due, or $15, whichever is greater after a 15-day grace period.

The impact of COVID-19:

While Prosper offers borrowers a 15-day grace period before levying late payment fees, assistance is available if you suffer from financial hardship. Prosper recommends that you contact the loan company at 1-800 843-1662, or via email at covidhelp@prosper.com.

LendingClub

Loan Amount: $1,000 – $40,000
APR: 7.04% – 35.89%
Min. Credit Score: 600
Approval: 1 – 7 Days
Terms: 3 – 5 Years
Fees:
  • Loan origination fee of 3% – 6%
  • You may incur late payment fees
  • There are no application fees
  • There are no prepayment fees
Qualification Criteria:
  • Be at least 18 years of age
  • Have a credit score of at least 600
  • Have a DTI ratio that doesn’t exceed 36% – 43%
  • Have recurring employment income or government benefits
  • Fill out your information through LendingClub’s online portal
Average Borrower Profile:
  • Has a credit score of 700
  • Has an annual income of $100,000
  • Borrows $15,800
  • Finances over a three-year term
  • Incurs an APR of 15.95%
  • Incurs a 5% loan origination fee
Best For: Good credit scores, low DTI ratios
Check rates

LendingClub’s P2P network of investors provides personal loans that range from $1,000 to $40,000, with APRs of 7.04% to 35.89% and terms of three to five years. You need a minimum credit score of 600 to qualify, but few other hurdles exist other than loans not being available in Iowa. To be eligible for the lowest APRs, LendingClub recommends that you have a prudent credit history, a low DTI ratio, and a good credit score. However, competing offers from investors help LendingClub “keeps costs low and opportunity high.”

Loan origination fees cost 3% to 6% of the loan, and the dollar amount subtracts from your gross proceeds. There is also a 15-day grace period for late payments, but a subsequent fee often applies, though LendingClub doesn’t disclose the exact amount. However, if you can meet the requirements, LendingClub is one of the most reputable P2P lenders.

Pros:

  • LendingClub offers P2P loans of $1,000 to $40,000.
  • Competitive APRs range from 7.04% to 35.89%.
  • You can repay the funds over terms of three to five years.
  • Applying does not impact your credit score.

Cons:

  • You incur a loan origination fee of 3% to 6%.
  • Late payment fees often apply.
  • Iowa residents are ineligible.

The impact of COVID-19:

LendingClub offered delayed payment programs to members in financial need during the pandemic. If you want to apply for relief, you can call LendingClub’s special care line at 1-877-644-4446.

Upstart

Loan Amount: $1,000 – $50,000
APR: 3.09% – 35.99%
Min. Credit Score: 300
Approval: 1 – 7 Days
Terms: 3 – 5 Years
Fees:
  • Loan origination fee of 0% – 8%
  • Late payment fee of 5% of the amount due, or $15, whichever is greater, after a 15-day grace period
  • Insufficient funds fee of $15
  • Paper documents fee of $10
  • There are no prepayment fees
Qualification Criteria:
  • Be at least 18 years of age
  • Have a credit score of at least 300
  • Have a DTI ratio that doesn’t exceed 45% to 50% (excluding rent/mortgage)
  • Have not filed for bankruptcy in the last 12 months
  • Have no current delinquencies on your credit profile
  • Have less than six credit inquiries on your profile in the last six months (excluding mortgages, auto and student loans)
  • Have recurring employment income or government benefits
  • Fill out your information through Upstart’s online portal
Average Borrower Profile:
  • Borrows roughly $8,600.
  • Incurs an APR of 23.98% on a five-year term
  • Achieves approval nearly twice as often than traditional lenders with a FICO Score of 620 to 660
  • The CFPB found Upstart’s AI risk model approves 27% more borrowers and they incur APRs 16% lower than traditional lenders
Best For: Low credit scores, high DTI ratios
Check rates

Upstart is a unique P2P lender since it only has a minimum credit score requirement of 300. Moreover, Upstart’s algorithm uses artificial intelligence (AI), and your education and job history can counterbalance a poor credit score. Loans range from $1,000 to $50,000, with APRs of 3.09% to 35.99%, and terms of three to five years. However, residents of Georgia ($3,100), Hawaii ($2,100), Massachusetts ($7,000), New Mexico ($5,100), and Ohio ($6,000) have higher minimum loan requirements. For your reference, Upstart’s website states that the average APR for a five-year loan is 23.98%. In addition, loan origination fees range from 0% to 8%, and a late payment fee of 5% of the amount due, or $15, whichever is greater, will apply. There is also a $15 insufficient funds fee and a $10 paper documents fee.

Pros:

  • Upstart offers P2P loans of $1,000 to $50,000.
  • Competitive APRs range from 3.09% to 35.99%.
  • You can repay the funds over terms of three to five years.
  • Upstart’s AI algorithm places less emphasis on your credit score.
  • Borrowers in all states should be able to apply.
  • Applying does not impact your credit score.

Cons:

  • You incur a loan origination fee of 0% to 8%.
  • You incur a late payment fee of 5% of the amount due, or $15, whichever is greater.
  • You incur a $15 insufficient funds fee.
  • You incur a $10 paper documents fee.
  • Some states have higher minimum loan requirements.

The impact of COVID-19:

If you need to pause your loan payments because of the pandemic or due to other financial difficulties, you can submit an online request through Upstart’s website. In addition, you can also call the lender at 1-855-451-6753.

Peerform

Loan Amount: $4,000 – $25,000
APR: 5.99% – 29.99%
Min. Credit Score: 600
Approval: 1 – 7 Days
Terms: 3 – 5 Years
Fees:
  • Loan origination fee of up to 1% to 5%
  • Late payment fee of 5% of the amount due, or $15, whichever is greater, after a 15-day grace period
  • Insufficient funds fee of $15
  • Check processing fee of $15
Qualification Criteria:
  • Be at least 18 years of age
  • Have a credit score of at least 600
  • Have a DTI ratio that doesn’t exceed 40%
  • Have at least one bank account and revolving credit line
  • Have at least a one-year credit history
  • Have no delinquencies, bankruptcies, collections, or tax liens within the last 12 months
  • Fill out your information through Peerform’s online portal
Average Borrower Profile: Peerform doesn’t disclose average personal loan statistics
Best For: Fair credit scores, low DTI ratios
Check rates

Peerform is a reputable P2P lender with a minimum credit score requirement of 600. You can borrow $4,000 to $25,000, with APRs of 5.99% to 29.99% and terms of three to five years. In addition, Peerform notes that borrowers in New York and Colorado won’t pay more than 15.99% and 12%, respectively. When you submit an inquiry, Peerform creates a loan listing where investors on the platform can subscribe. Then, once enough investors commit to providing the funds, the proceeds are deposited in your account within a few days. However, the company doesn’t offer loans in West Virginia, North Dakota, Vermont, Wyoming, Washington, D.C., or Connecticut.

To qualify, you need to have a DTI ratio of 40% or less, one bank account, one revolving credit line, and one year of credit history. Loan origination fees range from 1% to 5%, and Peerform’s late payment fee is the greater of $15, or 5% of the amount due after a 15-day grace period. There is also a $15 insufficient funds fee and a $15 check processing fee.

Pros:

  • Peerform offers P2P loans of $4,000 to $25,000.
  • Competitive APRs range from 5.99% to 29.99%.
  • You can repay the funds over terms of three to five years.
  • Applying does not impact your credit score.

Cons:

  • You incur a loan origination fee of 1% to 5%.
  • You incur a late payment fee that’s the greater of $15, or 5% of the amount due, after a 15-day grace period.
  • You incur a $15 insufficient funds fee
  • You incur a $15 check processing fee.
  • Peerform doesn’t offer loans in some states.

The impact of COVID-19:

Peerform doesn’t reference any specific hardship policies. However, you can call the lender at 1-800-338-8049 or email support@peerform.com to learn more about your options.

Happy Money

Loan Amount: $5,000 – $40,000
APR: 5.99% – 24.99%
Min. Credit Score: 550
Approval: 1 – 7 Days
Terms: 2 – 5 Years
Fees:
  • Loan origination fee of 0% – 5%
  • There are no late payment fees
  • There are no application fees
  • There are no prepayment fees
Qualification Criteria:
  • Be at least 18 years of age
  • Have a credit score of at least 550
  • The maximum DTI ratio is often 43%
  • Have recurring employment income or government benefits
  • Have no current delinquencies
  • Have a credit history of at least three years
  • Fill out your information through Happy Money’s online portal
Average Borrower Profile:
  • Has a credit score of 710
  • Has $2,000 in cash flow per month
  • Has a DTI ratio of 40%
Best For: A stable credit history
Check rates

Happy Money’s P2P network has provided more than $3.7 billion in loans to more than 208,000 members. And financing ranges from $5,000 to $40,000, with APRs of 5.99% to 24.99%, and terms of two to five years. Moreover, there are no application, prepayment, or late payment fees, and if you opt for a debt consolidation loan, you can lower your APR by 0.25% to 1%. However, you need to borrow at least $5,100 in New Mexico and $6,100 in Maryland, and Happy Money’s products are not available in Massachusetts or Nevada. In addition, there is a minimum credit score requirement of 550, and loan origination fees range from 0% to 5%. Happy Money is also transparent with its terms and conditions, and loan specifications are easy to find on the company’s website. As a result, the P2P lender is one of the most trusted in the marketplace.

Pros:

  • Happy Money offers P2P loans of $5,000 to $40,000.
  • Competitive APRs range from 5.99% to 24.99%.
  • APR discounts are available for debt consolidation loans.
  • You can repay the funds over terms of two to five years.
  • There are no application, prepayment, or late payment fees.
  • Applying does not impact your credit score.

Cons:

  • You incur a loan origination fee of 0% to 5%.
  • Some states have higher minimum loan requirements.
  • Residents of Massachusetts and Nevada can’t apply.

The impact of COVID-19:

Happy Money has relief programs that can help borrowers dealing with COVID-19 disruptions or other means of financial hardship. To inquire about the available options, you can call Happy Money at 1-949-346-8740 or send an email to success@happymoney.com.

LendingTree

Loan Amount: $1,000 – $50,000
APR: 2.49% – 35.99%
Min. Credit Score: 600
Approval: 1 Day
Terms: 1 – 5 Years
Fees:
  • Loan origination fee of 0% – 3%
  • You may incur late payment fees
  • Most lenders don’t charge prepayment fees
Qualification Criteria:
  • Be at least 18 years of age
  • Have a credit score of at least 600
  • The maximum DTI ratio is often 43%
  • Have recurring employment income or government benefits
  • Fill out your information through LendingTree’s online portal
Average Borrower Profile:
  • Excellent credit scores borrow $20,128 at an APR of 8.83%
  • Good credit scores borrow $9,818 at an APR of 17.54%
  • Full-time employees borrow $11,016
  • Self-employed persons borrow $12,266
  • Part-time employees borrow $7.944
  • Unemployed persons borrow $8,254
  • The majority of personal loans are used for credit card refinancing and debt consolidation
Best For: Obtaining a low APR
Check rates

LendingTree is a well-known comparison site with an extensive network of lenders. Companies on the platform offer $1,000 to $50,000, with ARPs of 2.49% to 35.99%, and terms of one to five years. You can filter your results by credit score, loan amount, type of loan, and repayment terms. Moreover, there are reliable options for home improvement, business, credit card refinance, and debt consolidation loans. Likewise, Happy Money, LendingClub, and Upstart partner with LendingTree, so comparing products from the top P2P lenders is easy. Also, LendingTree breaks down lenders’ average APRs by credit score. These figures include P2P loans and standard personal loans:

  • For borrowers with credit scores of 760+, the average APR is 8.83%.
  • For borrowers with credit scores of 720 to 759, the average APR is 12.95%.
  • For borrowers with credit scores of 680 to 719, the average APR is 17.54%.
  • For borrowers with credit scores of 640 to 679, the average APR is 22.74%.

Therefore, if your credit score falls within the ranges above, the APRs are rough estimates of what lenders on LendingTree’s platform provide. In addition, loan origination fees range from 0% to 3%.

Pros:

  • LendingTree’s partners offer $1,000 to $50,000.
  • Competitive APRs range from 2.49% to 35.99%.
  • LendingTree’s search function makes it easy to find affordable loans.
  • LendingTree’s services should be available in all states.
  • Applying does not impact your credit score.

Cons:

  • You incur a loan origination fee of 0% to 3%.
  • Late payment fees vary by lender.

The impact of COVID-19:

Since LendingTree is a comparison site, it doesn’t issue loans directly. Moreover, the lenders on LendingTree’s platform determine their deferral and forbearance policies independently. As a result, you need to contact your lender directly to determine the available options. For more information, LendingTree created an exhaustive list outlining lenders’ recent policies.

What Are Peer-to-Peer (P2P) Loans?

When applying for a personal bank loan, the lender borrows money from its depositors to fund the issuance. Then, the proceeds are returned to the depositors when you repay the balance, and the bank captures the net-interest spread. Similarly, online personal lenders often partner with traditional banks. And while algorithms determine approval and they service loans, the funds you receive come from the company’s financial institution.

Conversely, P2P loans come from individual and institutional investors. And while P2P lenders have similar algorithms and employ similar loan servicing practices, funds originate from an investment group, individual, or group of individuals. So if you apply for a $10,000 loan, the proceeds may be funded by 100 investors lending $100 each or one investor lending the entire $10,000. Either way, the P2P process makes it easier for investors to generate returns and borrowers to obtain loans.

How Do P2P Loans Differ From Standard Personal Loans?

While P2P and standard personal loans are similar, their terms differ slightly. For example, traditional personal loans often range from $1,000 to $250,000, with APRs of 2.49% to 35.99% and terms of one to seven years. However, Upstart ($50,000) offers the highest loan amount among the direct P2P lenders on our list, and four of the five direct P2P lenders on our list have repayment terms of three to five years. As a result, there are subtle differences between the two.

However, the most significant contrast is that depositors fund standard personal loans while investors fund P2P loans. Moreover, the latter fills the void between personal and alternative loans. Also, many traditional and online lenders have underwriting policies that don’t allow them to issue financing to specific borrowers. Sometimes this is due to low credit scores, a lack of recurring income, or a history of delinquency. Conversely, P2P lenders let investors with different risk tolerances choose whether or not they want to finance an application. Thus, a borrower that may be too risky for a bank or online lender may meet the requirements of a unique investor. And P2P investors’ ability to choose increases your chances of obtaining a loan at a lower rate. In addition, P2P lenders like Upstart also help borrowers avoid payday loans.

What Can I Use a P2P Loan For?

P2P and standard personal loans have similar purposes. However, there are some restrictions. For example, you typically can’t use the funds to repay a student loan or fund your education, and gambling is often prohibited. In contrast, both P2P and standard personal loans provide funds to cover most individual expenditures like home remodels, medical bills, debt consolidation, fixing your car, funeral expenses, vacations, weddings, and unexpected emergencies. Therefore, both products are helpful under the right circumstances.

The Pros and Cons of P2P Loans

P2P loans have good and bad qualities, so please consider the following before submitting your application:

Pros:

  • High loan amounts.
  • Low APRs.
  • Long repayment terms.
  • Fair credit scores can qualify.
  • They allow for debt consolidation.
  • Your application can process in minutes.
  • Some P2P lenders don’t charge loan origination fees.
  • You don’t have to post collateral.
  • Repaying on time can increase your credit score.

Cons:

  • There are only a few options available if you have bad credit.
  • Loan amounts are typically lower than standard personal loans.
  • Most P2P lenders have fees.
  • Approval rates vary.

Why Did We Select These Lenders?

We analyzed more than 100 companies and found that only 10 provide direct P2P loans or connect you with P2P lenders. And our guide is designed to cover personal loans, so we don’t include alternative or cash advance P2P loans here. However, the names on our list are some of the largest and most respected lenders in the marketplace, and they should meet the needs of most borrowers. Therefore, we believe our reviews include a comprehensive assortment of the best P2P products available.

Conclusion

Since P2P loans connect investors with borrowers, they allow those with excess funds to merge with those needing capital. And since investors can make financing decisions based on their risk tolerances, borrowers escape the one-size-fits-all standard that’s often inherent with traditional banks. Moreover, since P2P loans have many benefits as standard personal loans, they offer affordable financing and flexible repayment terms.

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