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Personal Loans

Peer-to-Peer Lending: Where to Find These Loans

Peer-to-peer loans are similar to traditional loans, but instead of borrowing money from a lender, consumers borrow from individual investors. Other than that, peer-to-peer loans are often similar to their traditional counterparts from banks, credit unions, and online lenders.

Knowing how peer-to-peer lending works can help you better understand your borrowing options if you’re considering a personal or small business loan.

What are peer-to-peer loans?

Peer-to-peer (P2P) lending platforms connect individual borrowers with a network of investors, which can be individuals or companies. Depending on the type of loan, your borrowing experience might be different.

P2P personal loans

Peer-to-peer personal loans are similar to personal loans from traditional lenders and are just as safe.

You may not even know you’re working with a P2P lending platform instead of a traditional lender: 

  • The application process is the same.
  • P2P platforms often service the loans after you’re approved.
  • You’ll never come in direct contact with your investors. 

Sometimes, the eligibility requirements can be less stringent than traditional personal loans. So if you have less-than-stellar credit, you may include P2P platforms as you shop for a loan.

P2P business loans

Peer-to-peer loans for small businesses are often for smaller amounts than traditional business loans. You may need to find individual lenders on your own before you get help from the lending platform. 

But you also might be able to get a low or even no interest rate, and credit requirements could be low or nonexistent.

Pros and cons of peer-to-peer personal loans

As with any financial product, getting a P2P personal or business loan to consolidate debt, cover emergency expenses, or make a large purchase offers advantages and disadvantages. 

Keep the following in mind before you proceed.


  • May offer lower interest rates

    If you have excellent credit, you may qualify for a lower interest rate than a traditional personal lender. 

  • You may get more flexibility

    P2P lenders may be more willing to work with bad-credit borrowers, and depending on the platform, you may get a lower loan amount than many traditional lenders allow.

  • Online platform

    Most P2P lending platforms are online only, making getting a loan convenient and quick.


  • Upfront fees

    P2P loans often come with an upfront origination fee, which compensates the lending platform for facilitating the loan process.

  • You may end up with a higher interest rate

    If your credit is fair but not good or excellent, you might qualify for a more favorable interest rate with a traditional lender.

  • Can damage your credit

    As with traditional personal loans, P2P personal loans can damage your credit if you miss a payment. 

Where to find peer-to-peer loans

We’ve researched P2P marketplaces to consider.

LenderType of P2P loanRates (APR)
KivaSmall business0% (as of Feb. 2024)


Personal loans

  • Next-day funding
  • Customizable monthly payment
  • Allows cosigners

Prosper offers flexible loan amounts from $2,000 to $50,000 and repayment terms, with no prepayment penalty if you choose to pay off your loan early.

The platform has a minimum credit score of 640, but if you’re unsure about your eligibility, you can prequalify with a soft credit check before you submit an official application. If you don’t have good approval odds on your own, or the rate quotes are high, you can apply with a cosigner. 

If you have good credit, Prosper offers competitive rates that beat many traditional personal loans. However, the lender also charges a high APR if your credit score is on the lower end of its acceptable range.


Small business loans

  • Offers 0% APR loans
  • Requires borrowers to crowdsource funds
  • No minimum credit score

If you’re an entrepreneur, you can get startup cash for your business with Kiva. The nonprofit microlending platform doesn’t offer large loans, but it has no credit, collateral, or cash flow requirements, and its loans don’t charge interest or fees.

That said, when you apply, you must find between five and 35 initial investors from your network of family members and friends, with a minimum investment of $25 each. Once you meet that requirement, Kiva will post your loan on its website for others to add their investment.

It can take at least several weeks to get the funding you need. Loan amounts go up to $15,000.

How to apply for a peer-to-peer loan

Depending on the type of loan you want, the application process can be similar to a traditional loan.

Applying for personal P2P loans

For personal peer-to-peer loans, the application process typically goes like this:

  1. Apply online through the P2P lending platform, providing basic details about yourself, how much you want to borrow, and the purpose of the loan.
  2. Provide necessary documentation, such as a copy of your government-issued photo ID and income documents (pay stub, W-2, or bank statement).
  3. If approved, review the loan agreement and accept the loan.
  4. Receive the loan funds, less origination charges, and start making payments.

Each lending platform has unique criteria for approval, so review the requirements and get prequalified before you apply to gauge your approval odds and potential terms.

Applying for small business P2P loans

As for business loans, Kiva’s process is quite different from traditional lenders:

  1. Get prequalified, then fill out an application, providing details about yourself and your business
  2. Upon approval, you’ll have 15 days to invite friends and family members to lend to you.
  3. Once you’ve found enough lenders in your network, your profile is listed on Kiva’s website for up to 30 days.
  4. Once your loan is funded, you’ll start making monthly payments.

Kiva does not require a minimum credit score to get approved.

Is a peer-to-peer personal loan right for me?

If you’re considering a personal loan, it’s wise to consider all types of lenders, including P2P lending platforms. This is true if you have excellent credit and want to minimize your interest costs or you have bad credit and need a loan without strict credit requirements.

But as with any personal loan, it’s essential to consider the following features before you apply:

  • Interest rate quotes: Unlike traditional bank loans, P2P platforms may offer more competitive rates due to their lower operational costs, but they are still the leading indicator of what your overall cost of borrowing will be
  • Origination fees: Origination fees are upfront charges imposed by P2P platforms to cover the costs associated with processing a new loan application. These fees are typically a percentage of the total loan amount and are either deducted from the loan proceeds before disbursal or added to the loan balance.
  • Loan amounts: Loan amounts can range from a few hundred to several tens of thousands of dollars, depending on the platform’s policies and the borrower’s needs and credit profile. P2P loans offer flexibility in borrowing amounts, catering to a wide range of financial needs from debt consolidation to home improvement projects.
  • Repayment terms: Repayment terms can range from a few months to several years, offering flexibility to match the borrower’s payment capacity. Longer repayment terms may result in lower monthly payments but higher overall interest costs.
  • Eligibility criteria: Eligibility criteria can include minimum credit scores, income levels, debt-to-income ratios, and other financial indicators. P2P platforms use these criteria to assess the risk of lending to a borrower and determine the terms of the loan, and can vary across platforms.

Alternatives to peer-to-peer loans

If you want options beyond P2P loans, keep these alternatives in mind:

  • Traditional personal loans: It’s often best to go with the lender or platform that offers you the best terms, regardless of whether it’s a P2P or traditional personal loan. So be sure to include different types of lenders as you shop. 
  • Credit cards: If you have good credit, you may be able to qualify for a credit card with an introductory 0% APR on purchases, balance transfers, or both. Depending on what you need, this option can save you significant money and offer more flexibility with your monthly payments.
  • Loan from a loved one: If your credit is in bad shape or you don’t want the credit impact of a personal loan, consider asking a friend to lend you money—or accepting a loan from your parents or another family member. To avoid damaging your relationship, it’s wise to draw up an official contract for repayment and to pay off the loan on time or early. 

Before you proceed, research and compare all your options to determine the best fit for you and your needs.