Peer-to-Peer Lending Guide

Information verified correct on January 19th, 2017

Find a better way to borrow or invest with peer-to-peer lending.

While not necessarily a new lending platform, having been introduced into the US market in 2006, peer-to-peer lending has gained traction recently as a new way to invest and borrow. For those looking to offer funds, returns can be in the lucrative 5% to 9% range, while borrowers can enjoy competitive rates on unsecured loans. This guide will take you through peer-to-peer (P2P) lending, its benefits and shortfalls, and how it can work for you.

Alternative personal loans you can apply for

Rates last updated January 19th, 2017
Unfortunately, none of the personal loan providers have a loan for that credit score. It you are urgent need of a small loan, you might want to check out a short term loan.
Max. Loan Amount Minimum Credit Score Turnaround Time Requirements
NetCredit Personal Loan
You could borrow up to $10,000 and get an interest rate personalized to your credit score
$10,000 300 1 business day Varies based upon state of application Go to site More
LightStream Personal Loans
You could borrow up to $100,000 with rates starting from 1.99% fixed.
$100,000 680 Varies You must have a good or excellent FICO and be an American citizen or a permanent resident of the US. Go to site More
SWIFT Personal Loans
With a 5 minute simple application, SWIFT connects you with lenders that will offer you terms that are reasonable, affordable, and trustworthy.
$10,000 1-2 days You have a valid bank account, You have a job or regular source of income, You are a resident of the United States and You are 18 years of age or older Go to site More
SoFi Personal Loan
Borrow up to $100,000 with a competitive APR and no fees.
$100,000 660 Varies You must be a U.S. citizen or permanent resident 18 years or older. Go to site More
Avant - Personal Loan
Borrow up to $35,000 with APRs ranging from 9.95% – 36.00%
$35,000 660 1-2 business days You must have at least a fair credit score (580 or more). Showing proof of a steady income. You must be a US Resident over 18 years old. Go to site More
Upstart Personal Loans
You are not required to have a specific minimum annual gross income, or credit history. That easy.
$50,000 660 1-2 business days 18+. US citizen or permanent resident. 660 credit score or higher. Go to site More
Payoff Personal Loans
Stress-free loan with APR starting at 8 and a 35000 credit line
$35,000 660 1-2 business days Avg credit score and debt to income ratio less than 50%. 18 years and older. Go to site More
Lending Club Personal Loan
Borrow up to $40,000 with rates starting at 5.99 to 35.89 APR based on your credit score.
$40,000 660 Varies You must be over 18 years of age, a permanent resident of the US or an American citizen and have a steady source of income. Go to site More
LendKey Student Loans
Reduce your interest rate, lower your monthly payments, and save thousands over the lifetime of your student loans.
$175,000 660 1-2 business days You must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible school. Go to site More

Personal loan lender matching services

These matching services connect consumers with personal loan lenders. It is important to note that these services do not make credit decisions and they are not lenders, loan brokers or agents for any lender or loan broker. They can help link you up with a lender that might be able to help you access a loan.

Rates last updated January 19th, 2017
Unfortunately, none of the personal loan providers have a loan for that credit score. It you are urgent need of a small loan, you might want to check out a short term loan.
Max. Loan Amount Minimum Credit Score Turnaround Time Requirements
PersonalLoans.com
An online loan matching service that connects you with lenders.
$35,000 Varies by Lender 1-2 days You must be employed, 18+ with a bank account. Go to site More
TrustedPersonalLoans.com Personal Loan
Trusted Loans give you flexibility to pay for your credit, once or twice each month.
$10,000 330 As soon as tomorrow 18+, have an open bank account, be employed or have regular income Go to site More
LendingTree Personal Loan
What everybody ought to know about LendingTree and the personal loans it provides.
$35,000 639 If you apply during working hours on a business day you can get access to approved funds within 24 hours. You must be an American citizen or a permanent resident of the US, You must be at least 18 years of age and You should have a regular source of income Go to site More
Accredited Debt Relief
Accredited Debt Relief can help you lower your monthly payments and interest rates or get out from serious debt. They offer free consultations at 1-877-569-5675.
Varies based on lender No minimum Varies based on lender 18 years of age or older, legal resident of the United States and additional terms may apply based on services and products used. Go to site More

How does peer-to-peer lending work?

Peer-to-peer lending takes place in an online marketplace facilitated by a third-party lender. If you’re looking to borrow, you submit an online application just like you would with any other loan. You provide details regarding your financial circumstances, including income, employment, assets, debts and credit score, and you wait to be approved. Investors can review your application (no personal details) and choose whether to finance your loan wholly or partially.

What are the features of a P2P loan?

Peer-to-peer lending has been a growing part of the American credit sector since its inception in 2006. Here are a few reasons why borrowers choose to take out P2P loans:

  • Lower rates. You’ll be offered an annual percentage rate (APR) based on your credit history, and this is typically lower than what is offered by a bank. Rates vary between 5.3% to 30% APR depending on what you’re looking to finance and what your credit score is like.
  • Check your rate. You can get an interest rate quote without it affecting your credit score, which is usually not possible with a bank.
  • Flexible eligibility criteria. Peer-to-peer lenders base your rate on your credit history. You can apply with less-than-perfect credit, but the rate you get will be higher.
  • Fast turnaround for funding. The application process is fast, and you can expect your funds relatively quickly depending on the amount your apply for and the details provided on your application.
  • Less fees. You will only pay one loan origination fee rather than the several fees charged by other lenders. You will also generally not be charged prepayment penalties.
NetCredit Personal Loan

NetCredit Personal Loans

NetCredit offer you the chance to borrow money as alternative to bank personal loans. As you borrow more your credit score increases and your interest rate becomes lower.

  • Min. Loan Amount: $1,000
  • Loan Term: Varies upon State
  • Turnaround Time: 1 business day
  • Total Costs: Depends on your credit score.
  • Build your credit score - Must be 21+
  • No security needed
  • Confidential and secure!

    “I’m an investor. What are the benefits for me?”

    If you’re looking to get involved in P2P financing as an investor, here are the features you can look forward to:

    • Lucrative returns. Investors can look forward to returns of between 5% and 9%.
    • Diversify your investments. You choose how much to fund per loan and you can spread your risk among multiple borrowers. This lessens the impact of negative results from late payments or defaults from riskier loans.
    • Easy for first-time investors. Playing the stock market may be difficult and time-consuming for first-time investors, but P2P lending is a much simpler way to invest. You choose where to put your money based on multiple loan factors and then receive monthly cash flow.
    • Different accounts available. You have multiple account options with some providers, including retirement accounts or standard investment accounts.

    What loan options are available?

    • Unsecured personal loans. This is a common type of loan available from P2P lenders, and you can use it to finance anything from a holiday to furniture purchases. You can usually borrow between $1,000 and $35,000.
    • Secured personal loans. If you have security, such as a car or property, you can take out a secured personal loan through a marketplace lender. If you have bad credit, you may have a better chance of being approved if you can provide collateral.
    • Debt consolidation loans. Another common reason people take out P2P loans is to consolidate debt. You can bring together debt from separate accounts such as credit cards or personal loans and pay it off at a lower rate.
    • Business loans. A newer type of financing is personal loans for business or P2P business loans, which help get your business on its feet or keep it moving.

    How can you find the right marketplace lender?

    There are a few peer-to-peer or marketplace lenders available in the US right now. Here’s how you can compare and find the right one for you:

    • How much will you be charged? This is an important aspect to consider for borrowers and investors. When it comes to borrowing, you need to consider what your rate will be and how much the loan origination fee is. You can generally check your rate without it affecting your credit file. For investors, what fees will you be charged?
    • Are you eligible? This is an important consideration for borrowers. Check the minimum criteria and make sure you meet it before applying.
    • What happens if borrowers default? If you want to invest, see what the marketplace lender has in place in terms of collection services for late or defaulted payments. Some lenders will take on the responsibility of collecting payments and some will charge a fee for this service.

    Peer-to-peer lending is a great alternative form of credit to consider – whether you’re a lender or a borrower. Remember that not every form of credit or investment opportunity is going to be right for you, so compare P2P loans to other options before making a decision.

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    US Personal Loans Offers

    Learn about our information service
    TrustedPersonalLoans.com Personal Loan

    Trusted Loans give you flexibility to pay for your credit, once or twice each month.

    LightStream Personal Loans

    You could borrow up to $100,000 with rates starting from 1.99% fixed.

    NetCredit Personal Loan

    You could borrow up to $10,000 and get an interest rate personalized to your credit score

    SWIFT Personal Loans

    With a 5 minute simple application, SWIFT connects you with lenders that will offer you terms that are reasonable, affordable, and trustworthy.

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