The 5 Best Peer To Peer Lending Sites Compared

Finding the best peer to peer lending platform nowadays requires a good understanding of the services offered by the websites. Borrowing or lending money through traditional methods - involving financial institutions and red-tape - can be a tad problematic, and that is why the concept of Peer to Peer Lending is so remarkable. P2PL, also called ‘crowdlending’ or ‘social lending’ is a good lending method if you are looking for a way to access crucial finance despite such obstacles as a poor credit rating or low earnings.

Nowadays there are quite a lot of social lending sites that offer P2PL services that you need to make a comparison of the best services out there. Then, select one or more that offer the right mix of services and offers you require. For starters, the best p2p lending sites are the ones that offer the lowest interest rates from which you are guaranteed a good return on investment.

I have studied and compared some of the top sites that offer this service and come up with a good review of their services, what they offer, and what they do not. Use the table below as a guide to selecting the p2p service that suits you.

Comparison of The 5 Best Peer to Peer Lending Websites

If you ask anyone who has ever considered using a p2p website for their reasoning, they would usually say it is because of the low interest rates and/or the nice ROI it promises. Only if you are prudent you’ll realize that there is more to this you should consider when deciding on a social lender to use. Peer to peer lending is a growing industry and will only get more popular in the future, as discussed in the video below:

The best p2p lending websites offer you two things: credibility and community. I usually recommend that before committing to a p2p website, you consider the APR and investor earnings as well as the length of time (in years) the website has been running. Reading a review, such as this one, can help you decide if the social lending website you are considering is one that works for you.

For this comparison I have included the top five peer to peer websites that have a minimum Smart Rating of 80% and organized them in that order accordingly. This review is accurate up to the year 2016.

P2PL Service

Loan Value


Total Loans Already Funded

Investor Earnings

BBB.Org Rating

lending club

Between $1,000-$35,000 (Avg. of $15,000)






Prosper loans

Between $2,000-$35,000 (Avg. of $13,000)






Funding circle

Between $25,000-$500,000





SoFi loans

Between $10,000-$100,000




Not BBB Accredited

Peerform lending

Between $1,000-$15,000




Not BBB Accredited

*Depending on the level of risk.  **Converted from £ to $

How To Select a Peer to Peer Lending Website For Your Own Use: Important Factors To Consider

1. Check How The Websites Compare

Peer to peer lending is not without its risks, so it is for your own safety that you understand how the social lending websites control and mitigate against risks. If you are a lender, you should find out how the website verifies the trustworthiness of potential borrowers.

For potential lenders a good and easy way to reduce your risk is to spread the money you are investing across as many borrowers as possible.

2. Interest Rates Are a Double-Edged Sword

Understand this: the higher the interest rate, the higher the risk that comes with it. Essentially, if you find a website that offers a mouthwatering interest rate, you should tread very carefully as the accompanying risk might be critical.

3. Determine What Type of Lender or Borrower You Are or Want to Be

The best type of p2p lending platform offers the lender the opportunity to select the type(s) of borrower(s) they want to cater to, and it allows the borrower to select the kind of lenders they want. You should be able to specify such things as the length of the loan repayment period per category. This means that there will be a set period for the rates to be in place for repayment and lenders can set the return on investment they expect accordingly.

This is a method that ensures that both lender and borrower are protected: if the lender goes too high in setting their range, no borrower will come their way and if they go too low, then their money will be ‘snapped up’ in an instant.

4. Find Out The Policy Regarding Bad Debt

Despite the assurance of credibility a p2p website might bring to the table, sometimes something goes wrong and bad debt becomes a thing. Some of the more forward-thinking peer to peer lending websites have over time planned for this by making borrowers pay an additional rate charge which makes up what is known as the ‘provision fund.’

peer to peer lending

The provision fund is then rate-regulated by the market on the website at any given day and kicks in whenever bad debt arises. The interest rate a borrower has to pay is closely tied to his credit risk, naturally, and the ‘high-risk’ borrowers will pay a higher rate compared to people with relatively better credit. These discrepancies, or additional funds, are kept in the provision fund.

Although the provision fund isn’t a sure banker - it will not cover all defaults fully - it will cover on average about 6 times the anticipated loss. This means that for a lender, he/she will take a loss if the defaults surpass six times the expected amount. If, on the other hand, the default is less than the expected, the lender will receive the surplus money in the form of a bonus.

This of course is a worst-case scenario and it is important for your p2p lending website to monitor and properly gauge the risk of borrowers on the website. It is also always nice to know a provision fund is present in case of the occasional defaults, which is where most of the complaints about these types of services come from.

Review & Features of the Top Crowdlending Websites

You probably need a bit more information than I provided in the table above before making a decision, so I will provide it here.

#1: Lending Club

lending club


Loans Funded to Date: $15bn+

Featured in: Business Insider, Forbes, The Economist, Telegraph

Years in business: 9

Minimum Investment Amount: $25

The ‘world’s largest credit marketplace,’ Lending Club offers its users an opportunity to get off the ‘investment roller-coaster’ - for good. It offers a safe lending-borrowing community by screening every application with its tested proprietary module. Only 10% of all requests are approved; only the best are ever allowed through Lending Club’s platform. This website is top on most lists of best p2p lending sites and it is one I highly recommend.

#2: Prosper Loans (Also Known As Prosper Marketplace)

Prosper loans


Loans Funded to Date: $6bn+, with over 250,000 lenders/borrowers

Featured in: Bloomberg Businessweek, CNBC, The Wall Street Journal, NPR, Reuters.

Years in business: 11

Minimum Investment Amount: $25

Prosper, the first peer-to-peer lending marketplace in America, has grown since 2005 to 2 million members, with over 6 billion dollars accumulated in funded loans. Prosper’s mission statement is simple: to allow people invest in each other without the restrictions of financial and social institutions. It remains one of the peer lending websites around.

#3: Funding Circle

Funding circle


Loans Funded to Date: £1,140,039,040

Featured in: Financial Times, Business Insider, The Guardian, TechCrunch, Forbes

Years in business: 6

Minimum Investment Amount: £20

Funding Circle has published an estimated return of about 7.4% after fees and bad debt. While they cater to several countries including Germany, USA, Spain and The Netherlands, Funding Circle is first of all a UK-based company. The peer to peer lending site is backed by the British Business Bank, which is a development bank wholly owned by the UK government. Read our full funding circle review here.

#4: SoFi

SoFi loans


Loans Funded to Date: Over $7 billion

Featured in: CNBC, Bloomberg, Forbes, The Wall Street Journal, Financial Times, INC, Re/code, Ad Week, Advertising Age.

Years in business: 5

Minimum Investment Amount: £20

First starting as a lending model for students and recent graduates to receive investments from alumni through a student loan process, SoFi’s plan was to reduce the interest rates below what was available through the federal government default loan accessing systems. SoFi has since moved from the alumni model to more traditional lending services, and it offers other benefits such as career services and mentoring for startup owners.

#5: PeerForm

Peerform lending


Loans Funded to Date: Over $7 billion

Featured in: Bloomberg Businessweek, Yahoo!, Reuters, American Banker, Time.

Years in business: 6

Minimum Investment Amount: £20

Peerform began in 2010 as a business put together by Wall Street execs to help build a community of dependable borrowers and lenders.

The website combines the FICO score with other techniques for ensuring that a borrower is well suited for a lender. Peerform has named their method of screening the ‘Peerform Loan Analyzer.’ This method has been developed with economists and can help people with credit scores as low as 600 to get loans.

Peer to Peer Lending FAQs

You are, at this point, probably wondering which p2p lending website suits your needs. What you need to do is have some questions answered that will help simplify everything.

1. How Can I Qualify For a Personal Loan From a Peer To Peer Lending Site?

There are various methods individual Peer to Peer Lending websites use to screen for borrowers on their platform, but they generally require your credit score and personal information.

Some of them use the FICO score, although many of them combine that with other in-house methods of determining the risk level of any borrower.

The corollary to this question for lenders is how a lender can start lending money on a p2p lending website. In a nutshell, lenders can create accounts on the websites of their choice and send out invitations for borrowers to make requests.

2. How Can A Lender Know an Ideal Potential Borrower?

The information is usually available on the website. As a lender you should study the loan request from a borrower intricately and make sure you understand the full scope of their terms. The good thing about a P2P lending situation is that both lender and borrower can agree on loan repayment period and the interest rate that is accrued over time, so you are never roped into a deal you do not fancy.

Define your terms, and your ideal borrower will find you.

3. How Much Can I Borrow On a P2P Website, And For How Long?

This varies a little depending on the platform you are applying to, but there are averages to help guide you on what you can borrow and the average repayment period. Refer to the table at the top of this article for a hint.

Make a Decision - Which Peer to Peer Lending Website Works For You?

By now you should have had enough information to make a decision on a social lending website. Remember: no matter what you choose, your ideal p2p lending website should be one that covers the bases and offers you transparency and communication. According to my findings, Lending Club is up there in that respect - the reason, I suspect, for it becoming the largest lending marketplace online.

Lending Club has, as a hallmark of its safety guarantee, a scrupulous screening process that is as transparent as it is reassuring both of the quality of its lenders and its borrowers. They offer personal loans up to $40,000 which you can access here.

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