Best peer-to-peer lenders for personal loans

Written by: Kat Tretina

•2 min read

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If you need to take out a personal loan to pay for a major expense or to refinance high-interest debt, working with a peer-to-peer lender is one option to explore.

Peer-to-peer lenders typically use online platforms to connect people with investors who will finance their loans. You may qualify for a peer-to-peer loan even if your credit isn’t perfect because peer-to-peer lenders are often more flexible with their lending requirements than traditional banks.

Check out our picks for the best peer-to-peer lenders that offer personal loans. All of them allow you to apply for prequalification so you can get an idea of the interest rate and terms you might be offered — making it easier to shop around for the best loan for your situation.

What you should know about peer-to-peer loans

Peer-to-peer, or P2P, lending is an alternative to borrowing from traditional banks and credit unions. When you apply for a loan on a peer-to-peer lending platform, the loan is posted to investors. Investors then review the different loan options to identify investment opportunities and decide if they’d like to help fund a loan.

Some peer-to-peer lending marketplaces also target small-business owners who need funding to establish or grow their companies. If you want to get a small-business loan, you can explore peer-to-peer lenders that cater to this market, like Funding Circle or StreetShares.

Depending on your credit, you may qualify for a competitive interest rate. But people with lower credit scores will likely see higher interest rates — sometimes even higher than the average credit card APR.

Applying for prequalification is a way to see what your potential terms and interest rate may be without hurting your credit scores. Note that prequalification doesn’t mean you’ll receive approval or that your final terms won’t change. And if you submit a full application, your credit may take a hit. But the prequalification process can help you shop for the best potential interest rate and terms for your situation.

How we picked these loans

To develop this list, we looked at major peer-to-peer lenders that work with borrowers across the country. We examined loan amounts, interest rates, fees and other factors to decide which lenders to recommend.

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.