Best Peer-to-Peer Lending of June 2023

Personal loan interest rates decreased this week for both the 36-month and 60-month loan terms. Here are the average personal loan rates offered to well-qualified applicants with a credit score of 720 or greater, as of June 19:

  • Three-year personal loan term: 20.47% (down from 21.25% a week ago).
  • Five-year personal loan term: 21.72% (down from 21.94% a week ago).

Personal loan rates vary widely based on creditworthiness. Borrowers with very good or excellent credit scores will see much lower interest rates than those with fair or poor credit. Often, borrowers with bad credit will apply for a secured personal loan that uses an asset as collateral in order to achieve lower rates:

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A peer-to-peer loan is usually an unsecured personal loan funded by institutional investors and obtained through an online platform. P2P lenders may work with consumers or small businesses.

Like traditional lenders, P2P lenders may consider factors such as your debt-to-income ratio and credit score for loan approval. But P2P platforms often rely on automated systems and algorithms to evaluate your creditworthiness, set loan terms and determine interest rates.

The marketplace handles all aspects of the loan, from determining eligibility to underwriting and collecting payments.


  • More flexible qualification requirements than other types of loans. P2P marketplaces are usually open to everyone, including borrowers with short credit histories, low credit scores or high DTI ratios. Marketplaces can offer more flexibility because they “don’t necessarily hold the risk; they are matchmakers,” says Rutger van Faassen, innovation and new markets, industry ecosystems executive at data provider Curinos.
  • Prequalification for borrowers. You can often prequalify using a soft credit pull to check your chances of approval and estimate loan terms. The soft inquiry means your credit won’t take a hit while you shop for a loan.
  • Good deals on rates. If you have a strong credit history, you may qualify for lower rates than what traditional lenders offer.
  • Quick cash compared with some traditional lenders. “Peer-to-peer lenders have a much better, streamlined process for borrowers to get to money, usually within a day or so,” van Faassen says. “The traditional banking system has always been slower, and there’s more paperwork.”
  • Potential to boost credit scores. Making on-time payments to your peer-to-peer lender can help you build a credit history and improve your credit. Most marketplaces report your payments to the credit bureaus, but double-check before you apply for a loan.


  • Loan fees. You could have to pay fees, such as an origination fee, on top of interest charges. Origination fees may cost 1% to 8% of the loan amount. That’s an extra $400 on a $5,000 loan or $400 off your loan funds.
  • Higher interest rates than traditional lenders. Your rate depends on your credit score and your peer-to-peer marketplace. The lower your credit score, the higher your rate. Shop around for the best rate.
  • Fewer financial hardship options from P2P lenders. You might not receive the same type of support that you would get from a bank if you take out a loan but later can’t make your monthly payments. “Very often, whomever is servicing the loan doesn’t have options, or few options, to help that consumer,” says Jim Triggs, president and CEO of nonprofit credit counseling agency Money Management International.
  • Credit score dings. Do not spread out your loan shopping to avoid damaging your score with hard credit inquiries. Contain hard inquiries to 14 days, and they will count as one inquiry on your credit report, regardless of whether lenders use FICO or VantageScore credit-scoring models.

Peer-to-peer loans and traditional personal loans have a few key differences, but they also share some similarities:

Peer-to-peer personal loans Traditional personal loans
Who funds the loans? Investors Traditional financial institutions such as banks, credit unions and online lenders
Where are they available? Peer-to-peer lending marketplaces Traditional financial institutions
Are the loans unsecured or secured? Typically limited to unsecured loans Unsecured and secured loans available
Credit requirements Many marketplaces lend to borrowers with lower credit scores – but at least 580 – and shorter credit histories. Most lenders require good or excellent credit.
Can I apply with a co-signer? May be able to apply with a co-signer, depending on the lender May be able to apply with a co-signer, depending on the lender
Can I get prequalified? Prequalification usually available Prequalification usually available
Does it help build credit? Yes, if the lender reports to the credit bureaus, and most do. Yes, if the lender reports to the credit bureaus, and most do.

Check out peer-to-peer lending marketplaces if you are looking for a personal loan and you:

  • Need funds quickly. When borrowers need money in a few days, “Usually what we find is people say speed is more important than the best price,” van Faassen says. A peer-to-peer loan can be a good solution because you get your money faster than a traditional personal loan.
  • Have less-than-perfect credit. If you don’t qualify for a personal loan from traditional financial institutions, you might have better luck with a P2P marketplace. P2P marketplaces generally lend money to people with fair or better credit, which translates to a score of at least 580.
  • Are looking for a good deal. Borrowers with strong credit should shop around for the best rates with several types of lenders, including P2P lenders. You might find more competitive rates than traditional banks and credit unions thanks to streamlined processes and lower overhead.

Find the Personal Loan That’s Right for You

Shopping around and prequalifying with multiple lenders is a good idea to help you find the best peer-to-peer lenders for your financial situation. When you’re evaluating lenders, look at:

  • Loan restrictions. How will you use the P2P loan, and does the lender allow that purpose?
  • Loan amounts. These vary with each lender and may range from about $1,000 to $40,000 or more. Your creditworthiness will affect how much you can borrow. If minimum or maximum loan amounts don’t work for your needs, you may need to check out a different marketplace.
  • Qualification requirements. Check the marketplace’s minimum credit score, income and debt-to-income ratio requirements. Researching the lender or prequalifying can help you see whether you meet those thresholds before applying.
  • Fees. Does the marketplace charge origination fees, late fees or other fees? Fees increase the cost of borrowing, but you might find a lender that limits them.
  • Loan terms. Each marketplace also offers different repayment terms, usually between three and six years. A longer loan term comes with a lower monthly payment but higher interest costs. If you think you’ll pay down the loan early, then look for lenders that don’t charge prepayment penalties.
  • Interest rates. A peer-to-peer lender may advertise a certain annual percentage rate range, but your creditworthiness influences your rate. One lender may offer you a lower rate than others, which can help you save money over the loan term.

  • Consider a home equity loan or line of credit. A home equity loan or a HELOC could offer the best rate for home repairs because it is backed by your home as collateral.
  • Explore personal loan options. Although personal loans and P2P lending may look similar, they are not. Check rates and terms to see where you qualify for the best deal.
  • Check out an automobile loan. If you need to buy a new or used car, an auto loan might offer better terms and rates than a P2P loan.
  • Think about using a credit card. If you can’t pay off the balance right away, a 0% balance transfer credit card will allow you to clear it over the introductory rate period.
  • Borrow from a family member. Weigh the pros and cons of borrowing from friends or family members. If someone can lend you money, then you may get better terms than a P2P loan.

Peer-to-peer loans have potential pitfalls such as origination fees and high interest rates for some borrowers.”But overall, they are a safe lending instrument for consumers,” Triggs says.

P2P platforms should safeguard your personal and financial information as a traditional lender would. You might be nervous that you aren’t borrowing from a traditional financial institution, but investors and not borrowers take on the most risk. When borrowers don’t repay loans and they default, investors likely won’t get their money back. Do your due diligence as you would with a traditional bank or online lender. Before applying for a P2P loan, check third-party reviews on the marketplace lender, “especially if something sounds too good to be true or it’s not a well-known company,” Triggs says.

Once you meet the requirements set by the website you want to invest through, like your income level, you then will need to set up your online profile. Also, make sure to choose if you’re investing through a traditional or retirement savings account. After creating your account, you will then need to fill your investment portfolio with notes, which are parts of loans that you’ll have to buy to begin investing.

U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.

To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. Personal loan companies are evaluated based on customer service ratings, interest rates, maximum loan term, minimum and maximum loan amounts, minimum FICO score, online features, and origination fees.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.

To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.

To recap, here are the picks:

Best Peer-to-Peer Lending of June 2023

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