What to Know First
Many personal loan lenders require borrowers to have good or excellent credit, making it difficult for individuals with fair or poor credit to qualify. Peer-to-peer (P2P) lending offers an alternative by connecting borrowers with multiple investors, increasing the chances of loan approval and potentially offering better rates.
P2P lenders usually operate online, providing a quick application process and fast funding. To help you find the best P2P lender, we reviewed 12 companies based on factors like APRs, loan terms, fees, and investor returns. Below are the top P2P lending options for 2025.
Best Peer-to-Peer Lenders for 2025
1. Best Overall: Prosper
- APR Range: 8.99% – 35.99%
- Minimum Credit Score: 600
- Loan Amount: $2,000 – $50,000
- Loan Terms: 24 – 60 months
Why We Chose It:
Prosper stands out for its willingness to work with borrowers with fair credit. It also allows joint applications, which can increase the chances of loan approval. The lender offers fast loan disbursement and has excellent customer reviews.
Pros:
- Accepts fair-credit borrowers
- Allows joint applications
- Quick loan disbursement
Cons:
- Charges origination fees (1.00% – 9.99%)
- Maximum loan term is five years
- Payments by check incur additional fees
2. Best for Small Business: Funding Circle
- APR Range: 11.29% – 30.12%
- Minimum Credit Score: 620
- Loan Amount: $25,000 – $500,000
- Loan Terms: 6 – 84 months
Why We Chose It:
Funding Circle specializes in small business loans, offering higher loan amounts and quick funding. It provides multiple credit options, including business term loans and lines of credit.
Pros:
- Pre-qualification tool available
- Multiple loan options for businesses
- Quick loan disbursement
Cons:
- Charges origination fees (4.49% – 10.49%)
- Requires at least moderately good credit (660+)
- Businesses must be operational for at least two years
Comparing the Best P2P Loans
| Lender | Best For | APR Range | Origination Fee | Loan Amount | Loan Term |
|---|---|---|---|---|---|
| Prosper | Best Overall | 8.99% – 35.99% | 1.00% – 9.99% | $2,000 – $50,000 | 24 – 60 months |
| Funding Circle | Small Business | 11.29% – 30.12% | 4.49% – 10.49% | $25,000 – $500,000 | 6 – 84 months |
Guide to Choosing the Best P2P Lending Platforms
Key Factors to Consider:
- APR: The total cost of borrowing, including interest and fees.
- Loan Terms: The repayment period—shorter terms usually mean higher payments but lower overall interest.
- Origination Fees: Some lenders charge fees deducted from the loan amount.
- Credit Score Requirements: Each lender has a minimum credit score threshold.
- Collateral: Some P2P lenders offer secured loans for better approval chances and lower rates.
- Loan Disbursement Time: Some lenders provide funding within 24 hours, while others may take longer.
How to Apply for a P2P Loan
Most P2P lenders offer a pre-qualification tool to check eligibility without affecting credit scores. The application process usually involves providing personal information such as:
- Name
- Address
- Social Security number
- Income and employment details
If approved, the lender assigns a risk category, and investors decide whether to fund the loan. The process is typically fast, with funds disbursed within a few days.
How to Invest in P2P Loans
While P2P lending was once a popular way for individual investors to earn returns, most platforms now cater to institutional investors. However, some still allow individual investments, including:
- Prosper: Allows individuals to invest with as little as $25.
- Kiva: Offers microloans for global entrepreneurs, starting at $25.
- Fundrise: Focuses on real estate investments, with a minimum investment of $10.
- PeerStreet: Specializes in real estate lending, requiring a $1,000 minimum investment.
Final Thoughts
P2P lending remains an excellent option for borrowers struggling to secure loans from traditional banks. While fewer true P2P lenders exist today, platforms like Prosper and Funding Circle still provide competitive loan options.
If you have strong credit and stable income, you may qualify for lower rates through banks or credit unions. However, for those with fair credit or unique funding needs, P2P lending is worth considering.
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