Peer-To-Peer Lending

Peer-to-Peer Lending

Peer-to-Peer Lending (P2P)

Peer-to-peer lending (P2P) is a method for individuals or companies to lend money to one another. You, as the lender, are paid interest and the funds are returned when the loan is repaid. However, compared to a savings account, peer-to-peer lending is much riskier.

P2P websites work similarly to marketplaces. They connect people or companies who want to lend money with people who need money. Borrowers will get money without having to go to the bank.

On certain websites, any money you lend is instantly shared among several borrowers, but on others, you can pick who you want to lend to.

In general, the higher the interest rate a person will pay, the riskier the person will be.

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Getting started with peer to peer lending

Open a P2P lender account and deposit funds via debit card or direct transfer.

Here are the Best P2P Websites of 2021


  • The maximum and minimum amounts you can borrow are $4,000 and $25,000, respectively.
  • 5.99 percent to 29.99 percent APR
  • Fees: Origination fees vary from 1% to 5% of the total loan amount. Late fees are $15 or 5% of the outstanding balance, whichever is greater. There is a $15 charge per payment if you pay by check rather than direct debit from your bank. Failure to pay results in a $15 charge per attempted draft. Prepayment penalties are not paid by Peerform.
  • FICO score of 600 is the minimum recommended credit score.
  • Other conditions for qualification: You should have a debt-to-income ratio (DTI) of less than 40% and at least one open bank account. In the last 12 months, your credit report should display at least one revolving account and no current delinquencies, recent bankruptcies, or collections (other than medical).
  • Terms of repayment: three or five years
  • Time for funds to be received: Funds are allocated within three days of final loan approval, but the bank can take longer to process them.
  • Restrictions: Funds cannot be used to pay for educational expenses or refinance student loans. Connecticut, North Dakota, Vermont, West Virginia, and Wyoming residents are not eligible for loans. 1
  • Institutional investors (organizations that invest on behalf of their individual members/clients, such as hedge funds, mutual funds, pension funds, and other similar entities) who buy entire loans are able to provide funding through Peerform.


  • You can borrow anywhere between $1,000 and $50,000, depending on your credit, income, and other factors included in your loan application.
  • 8.27 percent–35.99 percent APR range
  • Fees: Origination fees vary from 0% to 8% of the loan amount. Late fees are 5% of your past-due balance per month, or $15, whichever is greater. Upstart also charges $15 for returned ACH transfers or checks, as well as $10 for paper copies of records (one-time fee).
  • 600 is the minimum credit score that is required.
  • Other requirements: Upstart will review your credit reports for something that could disqualify you from a loan (such as bankruptcy, public records, more than 5 inquiries in the last six months, etc.). In most states, you must also be 18 years old, have a personal bank account, be employed full-time (or have a full-time work offer beginning within the next 6 months), and have verifiable personal information (name, date of birth, and Social Security number).
  • 3 or 5-year repayment terms
  • When you approve the loan, you will obtain funds within one business day, or two days if you accept after 5 p.m. EST.
  • Residents of West Virginia and Iowa are not qualified to participate.
  • The lender’s perspective: On the Upstart website, accredited investors will register. To become an accredited investor, you must have a yearly income of $200,000 ($300,000 for joint filers) or a net worth of $1 million or more. Borrowers at Upstart have a low delinquency rate: almost 90% of loans are current or paid in full.


  • The maximum and minimum amounts you will borrow are $2,000 and $40,000, respectively.
  • 7.95 percent–35.99 percent APR range
  • Expenses: For a 3-year term, origination fees vary from 1% to 5%, and for a 5-year term, origination fees range from 2% to 5%. The greater of $15 or 5% of the delayed payment is charged as a late fee. If you pay by check, you’ll be charged $5 or 5% of your bill, whichever is less. There are no fines for paying in advance.
  • Minimum credit score required: The number is unknown, but it is said to be 640.
  • Other conditions for qualification: Your debt-to-income ratio must be less than 50%, with any of your declared income being greater than $0. Your credit reports must be free of recent bankruptcy filings, have less than five credit inquiries in the last six months, and have at least three open tradelines (credit accounts).
  • 3 or 5-year repayment terms
  • Funds are usually received within 5 days. Under some conditions, next-day funding is secure.
  • Limitations: Residents of West Virginia and Iowa are not qualified.
  • The lender’s perspective: Investors can open an account and begin investing with as little as $25. The average historical return on Prosper is 5.3 percent.

Funding Circle

  • The maximum and minimum amounts you can borrow are $25,000 and $500,000, respectively.
  • The APR ranges from 11.29 percent to 30.12 percent.
  • Origination fees will vary from 3.49 percent to 6.99 percent. Prepayment penalties are not paid by Funding Circle. If a bill is 10 days past due, late fees of 5% of the missed payment are levied.
  • FICO score of 660 is the minimum recommended credit score (personal score)
  • Other conditions include having been in operation for at least 3 years and not having filed for bankruptcy in the previous 7 years.
  • Repayment terms: 6 months to 5 years
  • Money can be received in as little as three days.
  • Restrictions: Companies located in Nevada are not eligible.
  • The lender’s perspective: You must be an accredited investor ready to put down a minimum of $25,000 in your Funding Circle account. Annual returns for investors on the platform have ranged from 5% to 7% in the past. An annual maintenance fee of 1% of loan repayments will be paid by investors.


  • The maximum and minimum amounts you can borrow are $5,000 and $40,000, respectively.
  • 5.99 percent to 24.99 percent APR
  • Fees: Origination charge ranges from 0% to 5%.
  • 640 is the minimum credit score that is recommended.
  • Other qualifications: Only individual applicants are accepted.
  • Terms of repayment: 24 to 60 months
  • Within 2 to 5 business days, you will obtain your funds.
  • Residents of Massachusetts, Mississippi, Nebraska, and Nevada are not qualified to participate.
  • New Mexico’s minimum loan volume is $5,100, while Maryland’s is $6,100.

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Co-Owner of The Billionaire Blog. I have been an affiliate marketer for the last 3 years. It’s all about the small things in life.

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