Banks and credit unions are well-known sources for funding. But peer-to-peer lending, also known as marketplace lending, lets you get funded directly by investors, often at a lower rate.
P2P platforms also offer a simpler application, more flexible credit requirements, higher loan limits and faster funding.
CNBC Select has picked the best peer-to-peer platforms, looking at key factors like interest rates, fees, loan amounts, term lengths and funding speed. For more on how we made our selections, check out our methodology below.
Best peer-to-peer loans
Shop for the right personal loan
Best for bad or no credit: Upstart
Who's this for? Upstart allows borrowers with a 300 FICO Score (the lowest possible) to apply for up to $50,000 and considers applicants with no credit history as well. Its AI-powered underwriting model evaluates employment history, education and other factors.
Standout benefits: Borrowers can get approved for as little as $1,000 or as much as $75,000, the widest range on our list.
Upstart offers accessible personal loans for people with fair or average credit.
- Accept applicants with low or no credit
- No early payoff fees
- Most loans funded the next business day
- High late fees
- Origination fee of 0% to 10% of the target amount
- $10 fee for paper copies of loan agreement
Best for starting a small business: Kiva
Who's this for? Entrepreneurs can raise up to $15,000 on Kiva. After a 15-day private funding period for friends and family, other lenders can contribute. If you get funded, you'll have 36 months to repay your no-interest, no-fee loan.
Standout benefits: The nonprofit platform has no credit score requirement, but borrowers can choose to have their loan reported to Experian, helping them build business credit for later use.
Loans are geared toward borrowers, especially business owners, who are unbanked and have trouble qualifying for financial products.
- 0% interest and no fees
- No minimum time in business or annual revenue required
- No credit score requirement
- Can reach community of 1.6 million Kiva lenders
- Low lending limit
- Personal guarantee required
- Borrowers need to crowdfund from their network
Best for quick funding: Prosper
Who's this for? Prosper's easy-to-navigate application and AI-powered approval process mean borrowers can get funds as quickly as the next business day.
Standout benefits: Prosper approves loans for borrowers with a 560 credit score and accepts applicants with co-borrowers.
You can sign with collateral or a co-borrower to better your approval odds and secure a lower rate. Funding can be quick.
- Approves loans of up to $50,000
- Repeat borrowers may qualify for an APR discount
- Borrowers can choose their payment date
- Co-borrowers permitted
- Higher maximum APR than other lenders
- Funding may take several days
- No direct payment to creditors
- Numerous fees
What's a peer-to-peer loan?
A peer-to-peer (P2P) loan bypasses a bank or other traditional financial institution by having the borrower receive funding directly from an individual or company. That often means lower rates and higher loan limits for applicants.
P2P lending is popular among entrepreneurs whose businesses may not yet have an established credit history. For lenders, it offers a better return than a traditional savings account but defaults are more common and the funds are not FDIC-insured.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
6.20% - 35.99%
$1,000 to $75,000
9.95% to 35.99%
$2,000 to $35,000
Pros and cons of peer-to-peer loans
- Lower interest rates
- Easier to qualify for with poor or limited credit
- Faster application and funding process
- Shorter terms, usually 60 months or less
- Fees may be higher than with a traditional personal loan
Peer-to-peer loan alternatives
LendingClub stopped offering P2P loans and now funds loans directly. It's still worth considering, particularly if you're looking for a debt consolidation loan, since it allows you to send funds directly to your creditors.
LendingClub Personal Loans
Annual Percentage Rate (APR)
8.98% to 35.99% APR
Loan purpose
Debt consolidation, major expenses, emergency costs, moving, weddings
Loan amounts
$1,000 to $40,000
Terms
24 or 60 months
Credit needed
Good
Origination fee
3.00% to 8.00% of the loan amount
Early payoff penalty
None
Late fee
15-day grace period to make payments with no penalty
See our methodology, terms apply.
Pros
- Co-borrowers are permitted
- No prepayment penalty
- Loan amounts as low as $1,000
- Quick application you can submit in just a few minutes
- Ability to check your rate without hurting your credit score
Cons
- Doesn't accept co-signers
- Origination fee of 2% to 6% of the loan amount
- Only two loan terms to choose from (3 or 5 years)
Loans start at $1,000 and can reach $40,000, with loan terms from 24 to 60 months. There is no prepayment penalty and borrowers can apply for a LendingClub loan with a co-applicant.
If you don't want to commit to a long-term loan, you could consider a credit card with an intro APR offer, like the Wells Fargo Reflect® Card.
The Wells Fargo Reflect® Card can help you save on interest charges thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
- Best-in-class intro-APR for purchases and qualifying balance transfers
- No annual fee
- Cell phone insurance: up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible
- No rewards
- No welcome bonus
- High balance transfer fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.49%, 23.99%, or 28.24% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
5%, min: $5
Foreign transaction fee
3%
FAQs
What are peer-to-peer loans?
Peer-to-peer lending is the process of getting a loan directly from investors, without a bank or financial institution acting as an intermediary. Borrowers are commonly connected to lenders via an online platform and enjoy lower interest rates, more flexible credit requirements and faster funding times.
Are peer-to-peer loans safe?
For borrowers, peer-to-peer loans are as safe as traditional loans. It's the lenders who take on greater risk, as borrower defaults are more common and the money deposited for the loan is not FDIC-insured.
What's the minimum credit score for a peer-to-peer loan?
P2P platforms have different standards: Some require a minimum credit score of 580 (considerably lower than what a bank or credit union would require) but others have no minimum credit requirement at all. In most cases, however, a higher credit score will improve your chances of receiving favorable rates and terms.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every personal loan list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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Our methodology
To determine which peer-to-peer lenders are the best, CNBC Select analyzed a handful of online lending platforms. We considered key factors like interest rates, fees, loan amounts, term lengths and funding speed.
After reviewing the above features, we sorted our recommendations by best for bad or no credit, best for starting a small business and best for quick funding.
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