4 best peer-to-peer lenders for personal loans

If you need an individual loan to pay for a large expenditure or to refinance a high-interest debt, working with a peer-to-peer lender is an option to explore.Peer-to-peer lending organizations often use online platforms to connect people with investors who will fund their loans. You may be eligible for peer-to-peer lending even if your credit is not perfect because peer-to-peer lenders are often more flexible with their lending requirements than traditional banks.

Check out our options for the best peer-to-peer lenders offering personal loans. All of which allow you to apply for a preliminary application so you can know the interest rates and terms you can be offered – making it easy to buy the best loan for your situation.
Best to Integrate Debt: ProsperityWhy Prosper stands out: Prosper says debt ast to be the most common use of its personal loans, which are available for between $2,000 and $40,000. Debt action can save you money by reducing the amount of interest payable on your debt.

Fee: Prosper charges an initial fee of 2.4% to 5% of the loan amount. Prosper deducts the fee from the loan before the loan is disbursed, so make sure you calculate it before depositing the amount you want on your loan application.Repayment term: Prosper offers only two loan term: three years or five years. But you can pay the loan early without penalty up payment.Eligibility: Prosper said to qualify for a loan, you must have an income "greater than $0", a debt-to-income ratio of less than 50%, no bankruptcy in the last 12 months, fewer than five requests from credit offices over the past six years and at least three open transactions on your credit report. Repeated borrowers may have additional requirements

Best to Co-Borrowers: LendingClub

Why LendingClub stands out: If you don't qualify for a loan alone or want to improve your rate, LendingClub lets you add co-borrowers to your application. With a generic app, LendingClub looks at your combined income and co-borrower's credit history along with your credit history, potentially improving your chances of getting a loan. LendingClub offers loans between $1,000 and $40,000.

Fee: LendingClub will charge you an initial fee of 1% to 6% of your loan amount, which is included in your APR.Repayment terms: Like Prosper, LendingClub only offers 3-year and 5-year loan terms and no up-to-advance penalties.Eligibility: LendingClub will review information about you from your credit office, credit score, and, according to its website, "other information that predicts the likelihood that you will make a payment on time until your loan is fully repaid."

Best for small loans: Upstart

Why Upstart stands out: Upstart offers loans as small as $1,000, so you may not have to borrow more than you need. Many individual lenders have higher starting loans. Keep in mind that your minimum loan amount may be higher depending on where you live. Getting started can also be quick: If your application is approved, you can get the loan on the next business day.

Fees: Upstart charges a number of fees that may increase the cost of your personal loan. Its starting fee ranges from 0% to 8% of the loan amount, which is deducted from the total amount you have borrowed. There are also late fees, return fees, and fees for requesting copies of your records.Repayment terms: Upstart offers three-year and five-year repayment terms, with no up-to-advance penalty fees.Eligibility: Upstart reviews your education and employment level along with your credit score and report to help decide if you can repay the loan.

Best for Fair Credit: Peerform

Why Peerform stands out: If your credit score is in the "fair" range, Peerform can be a good lender to you. Peerform requires a FICO score® a minimum of 600 and a debt-to-income ratio of less than 40% (excluding mortgage debt). The loan amount is from $4,000 to $25,000.

Fees: Peerform's initiating fees range from 1% to 5% of the total loan amount. That money is taken from the amount you borrowed. There's also a $15 charge if an automatic deduction from your bank account is declined, a $15 deferred fee, and a cheque processing fee of $15 (you pay for each check payment).Repayment term: Peerform offers three-year and five-year loans. If you want to pay your loan early, Peerform won't charge you up-to-pre-payment penalties.Eligibility: In addition to credit scores and debt-to-income ratios, Peerform says you must have a fairly clean credit record in the last 12 months - without any issues such as a recent breach of current law or bankruptcy.

What you should know about peer-to-peer loans

Peer-to-peer lending, or P2P, is an alternative to lending from banks and traditional credit alliances. When you sign up for a loan on a peer-to-peer lending platform, the loan will be posted to investors. Investors will then look at different lending options to identify investment opportunities and decide whether they want to help fund a loan.

Some peer-to-peer lending markets also target small business owners who need funding to set up or grow their companies. If you want to get small business loans, you can explore peer-to-peer lenders catering to this market, like Funding Circle or StreetShares.
Depending on your credit, you may be eligible to receive a competitive interest rate. But those with lower credit scores will likely see higher interest rates - sometimes even higher than the credit card's average APR.

Signing up for a preliminary application is a way to see what your potential terms and interest rates can be without affecting your credit score. Keep in mind that the preliminary selection does not mean that you will receive approval or that your final terms will not change. And if you submit a full application, your credit may be affected. However, the preliminary process can help you buy the best potential terms and interest rates for your case.

How we choose these loans

To develop this list, we looked at large peer-to-peer lending organizations working with borrowers across the country. We checked the loan amount, interest rate, fees, and other factors to decide which lender to recommend.More about this source textSource text required for additional translation information