Peer to Peer lending is simply borrowing from an individual or group of people who are willing to lend money to applicants they determine as qualified.Peer to Peer Lending

These Lenders are called investors and you can also decide to become an investor instead of a borrower. Investors and borrowers can be connected through websites which set rates, terms and allow the transaction to take place.

What is Peer to Peer Lending

Although the general operations may be the same, certain factors may vary from investor to investor. For example, their loan rates, eligibility criteria, tenures, target borrowers and even loan amounts. So, just like every other loan application, it is right to scout for the best options for you and pick the one that suits you best. For now, here are some Peer-to-Peer Lending best websites of March 2021.


This website is known for the best rates. It was founded by a group of wall street executives in 2010. If you want to apply for a loan here and get good rates as low as 5.99%, it is best that you have excellent credit. Since the interest rates for borrowers with excellent credit scores are quite low, it gets some competitive edge.

There are also no prepayment penalties.

Despite all the good sides to it, just like every lender option, Peerform also has a few cons. If you are considering borrowing over $25,000, you might need to consider other options because Peerform’s maximum loan amount is just $25,000. While their minimum loan amount is $4,000.

Read more: Different type of Loans

They also charge late fees of $15 or 5% of the unpaid payment; whichever one is higher. Choosing to pay by check instead of getting debited from your bank directly, will attract charges of an extra $15 per payment. There is also a $15 fee per draft attempt if payments fail. This can be seen as quite disadvantageous, which is why it is good to compare investors.

As a borrower, you would need at least a 600 FICO score which is the recommended minimum credit score. Also, your debt-to-income ratio should not be up to 40 % upward. Anything higher would pose a problem. You should possess one or more revolving accounts and should be free from recent bankruptcies and delinquencies in the last year.

It is also important to note that their loans are also not available in 5 states, namely; Connecticut, North Dakota, West Virginia, Wyoming and Vermont. Peerform takes about 3 days to distribute funds which have certain restrictions as to what you are allowed to use it for. For example, education-related expenses are prohibited.

Read more: Best Smart Reasons to Get a Business Loan


This investor was founded in 2012 by former Google employees who came together as a group. It has generated over $7.8 billion in consumer loans. It is known as the best for borrowers with Limited Credit History and borrowers seeking out personal loans that qualify, may have access to $1,000 – $50,000 in funding.

Some benefits you can find in transacting with Upstart is their fast funding, a higher amount for loan maximum than many other Peer-to-Peer investors and the fact that they do not just consider your credit score but Education or job history.

On the flip side, they do not allow co-signers, their origination fee is up to 8% and their APR maximum is as high as 35.99%, which is quite high.

Read more: Disadvantages of Bank Loans

You would need a minimum credit score of 600. However, as earlier mentioned, other things are considered. Their repayment term goes from 3 years to 5 years and you receive funds within 1 business day after you have accepted the loan. This could however take up to 2 days if you accept the loan after 5 pm EST. Another important thing to note if you are a resident in West Virginia or Iowa is that you will not be eligible for a loan.


Known as the best for Fair credit was launched in 2005. Although, Payoff loans are not available in all states, borrowers who can apply, have access to rates as low as 5.99% and their FICO credit score. Since Payoff offers loans with a limited credit history, it could prove useful if you want to apply for a loan individually.

Other advantages with Payoff loans apart from the free access to your FICO score, is that there is a pre-qualification option available and prepayment doesn’t attract a penalty. On the other hand, some disadvantages come with transacting with Payoff, like their no joint application rule, funding times are longer than some others and they are not available nationwide.

Read more: Tax Refund Loans

Payoff’s APR range is 5.99% to 24.99% and their origination fee is up to 5%. The minimum you are allowed to borrow is $5,000, while the maximum is $40,000. Their minimum credit score recommendation is 640 and the repayment term is from 24 months up to 60 months. If you want to apply for a Payoff loan, you are only allowed to do individual applications and your funds will be received within 2-5 business days. Also note that if you are a resident of Nevada, Nebraska, Massachusetts and Mississippi, you would not be able to apply for a loan as those states are ineligible

Funding Circle

Known as the best for small businesses was founded in 2010. With over 100,000 investors, Funding Circle has encouraged 90,000 small businesses by helping them get access to funds they can use to reach their goals. They are open to business owners with fair credit and you have fast access to funds as a borrower. There are certain things you would need to consider as a business before applying for a loan from Funding Circle:

Has your business been founded for more than 3 years? Do you have a FICO score of at least 660? If yes, then a small business loan from this company may be worth your consideration. This, however, can be a disadvantage and restriction for business owners without over 3 years in the establishment who are looking to borrow from Funding Circle. Another disadvantage in transacting with Funding Circle is that for general partnerships, a hard credit check is required and this usually stays on your credit record for about 2 years.

Their minimum recommended credit score (personal score) is 660 in FICO score and their repayment term is from 6 months to 5 years. You can borrow only from $25,000 to $500,000 but businesses based in Nevada are not eligible to apply for loans.


Known as the best for borrowers with Established Credit History. It was founded in 2005 and was the United States’ first Peer-to-Peer investing marketplace.

Prosper has helped borrowers over $770,000 to obtain funds. Some advantages in transacting with Prosper is their flexibility to change the due date of your monthly payment and their lower maximum origination fee. Although Prosper is the U.S pioneer of Peer-to-Peer Lending, it is not free of disadvantages.

Read more: Unsecured Loans

They are quite slow in funding, have a high maximum APR of 35.99% and you must have three or more open credit accounts to qualify. Their minimum credit score is not disclosed, however, it has been said to be 640. Repayment durations range from 3 to 5 years and application is not available to residents of West Virginia or Iowa.

How Does Peer-To-Peer Lending Work?

Just like regular loans, you apply first, then the investing platform may assign you a risk grade and the investors will review your request for the loan. Once all is set on your end, and that of the lenders, your loan will be deposited to your account within the time frame stated by the platform. Following after all these steps would be your repayments. It is always better to never be late on your monthly payments as this could affect your credit score and even attract late fees that would make you end up paying more than you should originally.

Read more: Hospitality Equipment

If you choose to be on the investing side of Peer-to-Peer lending, you can earn extra income and broaden your portfolio. Investing would also be great for you if you are looking to save your funds in a way that yields more interest for you. All you have to do is to apply to open an account on your chosen platform, get approved, deposit money to be loaned out and start your investment journey.

While enjoying your journey, also note that there are risks involved like any other type of investments, as there is the possibility of the platform shutting down and there is also no repayment guarantee from borrowers. Make sure to pick out a platform with a more secure repayment system. With all bases covered you might end up cashing out more than you ever imagined.