We may earn money when you click our links. Learn More. X

Peer-to-Peer Lending Sites: Lending Club vs Prosper vs Upstart

Best Peer to Peer Lending SitesSo you need some extra cash to get your business idea off the ground or pay off your overpriced credit card debt but not sure a bank will go for it? Welcome to the club! If you are looking for an alternative to taking out a traditional loan, then a peer-to-peer lending site could be a viable option. Lending Club and Prosper are widely considered the dominant peer-to-peer (P2P) lending sites, but what makes them the best of the pack? And how do they compare with other, lesser-known P2P sites? Here we give you a rundown of what P2P lending sites are all about and a comparison of several top services you’ll find on the web. But, first, we explain some of the basics so you can make a more informed decision.

If you are already familiar with how peer-to-peer lending works, jump ahead to our reviews section.

Our ranking#1#2#3
CompanyProsper LogoUpstart logo
WebsiteVisit WebsiteVisit WebsiteVisit Website
Our ranking

Peer-to-Peer Lending Sites vs Traditional Loans

So, what’s the difference between peer-to-peer (P2P) and traditional lenders? The biggest difference is that P2P lending sites are directly backed by everyday investors rather than financial institutions. And P2P lenders often offer lower fixed APR rates than other lenders, but like mortgage lenders and credit card companies, the riskier you are as a borrower (i.e. the worse your credit rating), the higher your APR. Depending on your credit score and documentation, you can receive your loan in as little as one business day versus a longer wait with traditional loans. There are some fees associated with most P2P loans – typically these are an origination fee, late payment fee and failed payment fee.

The borrowing and investing activities of P2P lenders in the United States are regulated by various federal and state entities. Each state’s regulations may differ so you need to check each P2P lending site to see if your state restricts you from borrowing and/or investing.

What to Expect When Borrowing from a Peer-to-Peer Lending Site

With most peer-to-peer lending sites, you’re required to fill out an online loan application, but your application won’t negatively impact your credit score like it does when you apply for typical loans (it’s called a soft inquiry). As with traditional loans, your interest rate is based on your credit score, usage and history, as well as your loan amount and terms. Your loan request receives a grade, depending on your risk factor as a borrower — these grades are also used for investors to determine how risky they want their investment to be (see our grading system overview below). Generally loans range from $1,000 to $35,000, but this depends on the lending site, as does the grading process, interest rate, and terms. See our comparison chart for the details.

Debt Consolidation, Credit Card Payoff and More

What types of loans do peer to peer lending sites offer? According to a 2014 Federal Reserve report, debt consolidation loans account for more than half of all peer-to-peer loans, followed by credit card payoffs (17%) and home improvement (8%). Small business loans account for an estimated 3.5% of all funded loans. Want to refinance student loans, put in a swimming pool, buy a new car, or fund medical expenses? Depending on the P2P lending site, you have a lot of options.

What’s In It For Investors?

There are a lot of opportunities for everyday investors to invest their money into peer-to-peer lending (you can start investing for as little as $25). For one thing, the yields tend to be pretty high compared to similar investment options – often several percentage points higher than investing in a CD.  And most peer-to-peer sites require at least a minimum 630 credit score for borrowers to be approved, so you’re not lending to the riskiest borrowers out there. One drawback for potential investors is that with most peer-to-peer lending sites, you must be an accredited investor, pursuant to the Securities Act of 1933.

One of the biggest positives for some investors is the personal investment – as an investor you choose who you want to invest with based on a number of criteria, not the least of which is the borrower’s personal story. This process cuts out the anonymous, big financial institution and brings both lending and investing down to a one-on-one, investor-to-borrower relationship.

What Are The Grading System And “Note” All About?

With peer-to-peer lending, everyday individuals fund small portions of loans, called notes by most P2P lending sites, and receive their principal plus interest when the borrower repays the loan. An investor typically can choose to: 1) invest in a number of different notes; and 2) determine how much to invest in each note.

The risk grading system is based on a credit score-based model for evaluating investment options. Each loan applicant’s credit rating is evaluated and translated into a letter grade, and investors can then choose how much risk they wish to take when funding a loan.

What’s The Risk with Investing in Peer-to-Peer Lending Sites?

Although the benefits of peer-to-peer lending can be lucrative for investors, you need to be a somewhat risk tolerant investor. Risk of loss is the biggest downside to investing in peer-to-peer lending. P2P loans are unsecured, meaning there are no assets backing each individual loan. So if a loan goes unpaid, investors are at a loss. And, of course, there’s always the risk of the P2P lending site discontinuing its services. Notes are not guaranteed or insured by any third-party or governmental agency.

Diversification is key. The range of risky versus not-as-risky borrowers you have to choose from as an investor really depends on the lending site – some have a solid base of less risky borrowers; others not so much. Some lending sites offer good risk investment tools to help investors determine how to best meet their individual needs. As a general rule, it is best to invest in small portions of many different loans rather than putting all your eggs in one basket.

Top Three Peer-to-Peer Lending Sites Reviews

Below are our picks for the top three lending sites with pros and cons for each. If you are looking for a loan, make sure you do your research and choose the site that is right for your unique needs. If you are an investor, hopefully these reviews will help you decide whether to invest in one of these peer lending sites or if you should look elsewhere.

#1 Lending Club


  • One of the best known P2P lending sites, so they have a solid track record
  • They offer larger loans than most other P2P lending sites
  • Excellent customer service
  • For borrowers, they have Saturday customer service phone hours and email anytime
  • You can choose from several different types of investment accounts: individual, joint, trustee, corporate, custodial/minor and IRA
  • 99.9% positive returns for investors who own 10+ Notes of relatively equal size
  • For investors: their minimum credit rating for borrowers is 660


  • For borrowers: their minimum credit rating is 660, which is higher than other P2P providers
  • APR not always the best rate available
  • Residents of Iowa and Idaho cannot borrow personal or small business loans
  • Only offer business for individual investors in 33 states
  • They offer fewer types of personal loans than competitors
  • They charge investors collection fees which are deducted from any amount recovered. The amount charged either of the following: 1) 18% of the amount recovered if the loan is 16 or more days late and no litigation is involved, or 2) 30% of hourly attorneys' fees, plus costs, if litigation is involved. Lending Club does not charge a collection fee if no payments are collected, and no collection fee will be charged in excess of the amount recovered.

Lending Club launched in 2007 as one of the first peer-to-peer lending sites, and today is one of the two dominant P2P lending sites based in the U.S. They have both experience and a solid base of investors, so they’re definitely deserving of their prominence. They offer small business loans starting at $5,000 and personal loans to consolidate debt, pay off credit cards, finance home improvement and swimming pool installation. LendingClub earns our #1 Best Peer to Peer Lending Site award for its attractive APRs, excellent customer service, investment options and much more. They are clearly leading this industry.

You can read our full review of Lending Club here.

#2 Prosper


  • They offer a number of different types of personal loans beyond the usual: military, wedding, baby and adoption, engagement ring, bridge and short-term loan
  • For borrowers: one of the lowest beginning APR rates available, and a lower minimum credit score than its major competitor
  • 92% of Prosper employees are investors
  • They offer a program for financial professionals to get involved
  • Their legal documents and SEC prospectus are available on their website
  • For investors: With Prosper's Quick Invest option, you can easily allocate your funds to a variety of borrowers, so even if one goes into default, the impact on your return is minimized.


  • All loans are capped at $35,000 – which is average for personal loans, but may not be enough to cover the costs of starting a business.
  • They only offer 36 or 60-month loans
  • For investors: based on their lower minimum credit score and high-end APR for borrowers, they tend to deal with riskier borrowers than some competitors
  • A large number of customer service complaints posted on online forums
  • Web platform is hard to navigate, difficult to find information

Prosper is our #2 pick for Best P2P Lending Site. It is one of the two P2P lending sites that currently dominates the market. Its parent company launched in 2005 and Prosper P2P lending site went online shortly thereafter. Over the past six years, Prosper peer-to-peer lending has granted more than $2.5 billion in personal loans. In mid-2014, Prosper raised $70 million in capital, led by Francisco Partners, a private equity firm, along with Institutional Ventures Partners (IVP) and Phenomen Ventures.

You can read our full review of Prosper here.

#3 Upstart


  • Other than the typical personal loans, Upstart offers loans for: student loans, relocation, travel, medical bills, and more
  • Loans for small business start-ups
  • Customer support via live chat, email or phone
  • Refunds on origination fees to investors on defaulted loans


  • Check processing fee of $15 if you choose to make loan payment by check
  • To invest, you must be an accredited investor

Upstart, our #3 choice for Best Peer to Peer Lending Site, is a younger peer-to-peer lending site geared largely toward college students and up-and-coming young professionals. “Ex-Googlers” founded Upstart in 2012 with the model of going beyond your credit score, with a focus on the potential of borrowers. Their statistical model considers schools you attended, your area of study, academic performance, and employment history to offer you the loan you’ve earned. Their loans are unsecured, but as an investor you can invest in loans by buying loan-related securities. These securities are issued by a trust and represent an ownership in the loan that the trust holds.

Best P2P Lenders: Category Winners

We’ve also ranked four of the peer-to-peer lending sites as the best in certain categories:

Comparison Tables Of Peer To Peer Lending Sites

We have two comparison tables for you to look over. The first is for borrowers and the second is for investors.


CompanyWinner: Lending ClubRunner-Up: ProsperThird Place: UpstartCircleBack LendingDaricFunding CirclePeerformSoFi
View plansVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit Website
Customer supportM-Sat: 6am-5pm PSTM-F: 8am-9pm; Sat: 9am-5:30pm ESTM-F: 6am-6pm PSTEmail and Phone (Hours Not Listed)Email OnlyM-F: 8am-6pm PSTM-F: 9am-6pm ESTM-TH: 7am-8pm; Fri: 7am-4pm; Sat-Sun: 7am-2pm PST
Personal loans
Small business loans
APR estimating toolMust applyMust applyMust applyMust applyMust apply
Minimum credit score660640640Unlisted660Unlisted600Unlisted
Approval time7 days average7 days averageAs soon as day 1As soon as day 1Up to 14 daysAs soon as day 11-14 daysSeveral business days
Minimum loan amount$5,000$2,000$3,000$3,001$1,000$25,000$1,000$10,000
Maximum loan amount$35,000 personal; $300,000 small business$35,000$25,000$35,000$35,000 personal; $50,000 small business$500,000$25,000$100,000
Origination fee1-5%1-5%1-6%0.99-4.99%Up to 5% of loan amount3.49%-7.99%1-5%None
Lowest interest rate5.49% personal; 5.9% small businessUnlisted5%5.96%6.03%4.99%UnlistedUnlisted
Lowest APR rate6.48%6.73%5.7%6.63%6.78%4.99% (interest)7.12%5.5%
Highest APR rate29.99%35.36%29.99%29.99%27.79% (interest)29.08%9.24%
Loan terms24, 36, or 60 months personal; 1-5 years small business36 or 60 months36 months30 or 60 months36 or 60 months6, 12, 24, 36, 48, or 60 months36 months36, 60, or 84 months
Late fee$15 or 5% of missed payment amount (whichever is greater)$15$15 or 5% of missed payment amount (whichever is greater)$15$155% of missed payment amount$15 or 5% of missed payment amount (whichever is greater)$5 or 4% of missed payment amount (whichever is less)
Grace period15 days15 days15 days15 days15 daysUnlisted15 days15 days
Failed payment fee$15$15$15$15$15Unlisted$15
Collection fee
View plansVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit Website
View plans
Customer support
Personal loans
Small business loans
APR estimating tool
Minimum credit score
Approval time
Minimum loan amount
Maximum loan amount
Origination fee
Lowest interest rate
Lowest APR rate
Highest APR rate
Loan terms
Late fee
Grace period
Failed payment fee
Collection fee
View plans
Winner: Lending Club Runner-Up: Prosper Third Place: Upstart CircleBack Lending Daric Funding Circle Peerform SoFi
Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website
M-Sat: 6am-5pm PST M-F: 8am-9pm; Sat: 9am-5:30pm EST M-F: 6am-6pm PST Email and Phone (Hours Not Listed) Email Only M-F: 8am-6pm PST M-F: 9am-6pm EST M-TH: 7am-8pm; Fri: 7am-4pm; Sat-Sun: 7am-2pm PST
Must apply Must apply Must apply Must apply Must apply
660 640 640 Unlisted 660 Unlisted 600 Unlisted
7 days average 7 days average As soon as day 1 As soon as day 1 Up to 14 days As soon as day 1 1-14 days Several business days
$5,000 $2,000 $3,000 $3,001 $1,000 $25,000 $1,000 $10,000
$35,000 personal; $300,000 small business $35,000 $25,000 $35,000 $35,000 personal; $50,000 small business $500,000 $25,000 $100,000
1-5% 1-5% 1-6% 0.99-4.99% Up to 5% of loan amount 3.49%-7.99% 1-5% None
5.49% personal; 5.9% small business Unlisted 5% 5.96% 6.03% 4.99% Unlisted Unlisted
6.48% 6.73% 5.7% 6.63% 6.78% 4.99% (interest) 7.12% 5.5%
29.99% 35.36% 29.99% 29.99% 27.79% (interest) 29.08% 9.24%
24, 36, or 60 months personal; 1-5 years small business 36 or 60 months 36 months 30 or 60 months 36 or 60 months 6, 12, 24, 36, 48, or 60 months 36 months 36, 60, or 84 months
$15 or 5% of missed payment amount (whichever is greater) $15 $15 or 5% of missed payment amount (whichever is greater) $15 $15 5% of missed payment amount $15 or 5% of missed payment amount (whichever is greater) $5 or 4% of missed payment amount (whichever is less)
15 days 15 days 15 days 15 days 15 days Unlisted 15 days 15 days
$15 $15 $15 $15 $15 Unlisted $15
Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website


CompanyWinner: Lending ClubRunner-Up: ProsperThird Place: UpstartCircleBack LendingDaricFunding CirclePeerformSoFi
View plansVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit Website
Customer supportM-F: 7am-5pm PSTM-F: 11am-8pm ESTM-F: 6am-6pm PSTEmail only to get startedEmail onlyM-F: 8am-6pm PSTM-F: 9am-6pm ESTM-TH: 7am-8pm; Fri: 7am-4pm; Sat-Sun: 7am-2pm PST
401K rolloverUnlistedUnlistedUnlistedUnlisted
Manual investingUnlistedUnlistedUnlisted
Risk grading systemUnlisted
Minimum to invest$25$25$100Unlisted$25$250,000$100,000Unlisted
Return range4.74%-7.98%5.48%-10.78%5.1%-8.5%Unlisted9%-10% averageUnlistedUnlistedUnlisted
WithdrawalMonthly principal & interestMonthly principal & interestCan transfer funds to your bank account anytimeUnlistedMonthly principal & interestUnlistedUnlisted
Monthly service fee1%1%0.5%Unlisted1%0.08%1%Unlisted
Reinvest optionUnlistedUnlistedUnlisted
View plansVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit WebsiteVisit Website
View plans
Customer support
401K rollover
Manual investing
Risk grading system
Minimum to invest
Return range
Monthly service fee
Reinvest option
View plans
Winner: Lending Club Runner-Up: Prosper Third Place: Upstart CircleBack Lending Daric Funding Circle Peerform SoFi
Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website
M-F: 7am-5pm PST M-F: 11am-8pm EST M-F: 6am-6pm PST Email only to get started Email only M-F: 8am-6pm PST M-F: 9am-6pm EST M-TH: 7am-8pm; Fri: 7am-4pm; Sat-Sun: 7am-2pm PST
Unlisted Unlisted Unlisted Unlisted
Unlisted Unlisted Unlisted
Unlisted Unlisted Unlisted
Unlisted Unlisted
$25 $25 $100 Unlisted $25 $250,000 $100,000 Unlisted
4.74%-7.98% 5.48%-10.78% 5.1%-8.5% Unlisted 9%-10% average Unlisted Unlisted Unlisted
Monthly principal & interest Monthly principal & interest Can transfer funds to your bank account anytime Unlisted Monthly principal & interest Unlisted Unlisted
1% 1% 0.5% Unlisted 1% 0.08% 1% Unlisted
Unlisted Unlisted Unlisted
Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website Visit Website

Monthly Service Fee: The amount charged to the investor based on a percentage of the borrower’s monthly payment amount. These are typically collected anytime an investor receives a payment proceed.

Other P2P Lending Sites

To jump straight to an in-depth review of a peer-to-peer lending site you’re interested in, click on the link in the list below:

CircleBack Lending | DaricFunding CirclePeerform | SoFi

CircleBack Lending Review

Visit WebsiteCircleback Lending logo

CircleBack launched in early 2012 by a founder of Loanio. Loanio was one of the original three P2P lending services which folded in the 2008 financial crisis. It took until 2014 for CircleBack to get firmly planted with the help of Jeffries (a premier global investment bank), which securitized a $500 million batch of consumer loans. CircleBack has a long way to go to compete with the big players, but their founder is committed to the ideal of peer-to-peer lending. Time will tell if they have the staying power of their competitors.


  • The personal loan types are much more varied than competitors. Other than the typical types, they offer loans for: medical expenses, auto/car, motorcycle or boat purchases, wedding, engagement ring, vacation, relocation and military loans.
  • Their founder has a commitment to social peer-to-peer lending
  • Comprehensive blog with up-to-date advice
  • Quicker than average turnaround for loan approval and funding


  • $15 Check processing fee if you choose to pay your loan by check
  • Customer support is via email only, but they indicate on their website their
  • No listed information for investors – you have to submit their online form first

Daric Review

Visit WebsiteDaric logo

Launched in late 2013, Daric is one of the newcomers to online peer-to-peer lending. Although it hasn’t reached the big leagues yet, Daric founders have tried to differentiate their platform by being user-friendly and easy to apply – you only need to fill out their online application and add your bank account to your profile. Only in rare cases, they say, do you need to upload other documentation. Daric is a true peer-to-peer lending site that has pretty standard rates and investor options. The one thing that sets Daric apart is the ability to take out a second loan once you’ve made on-time payments for 6 months.


  • Offer personal and small business loans
  • Solid APR rates
  • Second loan option after six months of on-time repayments (maximum total of $50,000 for both loans)
  • All legal information, including SEC filings, listed on their website
  • Investors can earn returns from borrowers' fees, such as late or failed payment fees


  • Customer support via email only and there aren't many resources on their website
  • Loans for less than $5,000 are only available for 36-month terms
  • Eligibility standards to borrow are more stringent than many other sites
  • Daric won't grant you a partial loan if your loan is less than 60% funded by investors after 14 days
  • Must be an accredited investor to invest with Daric

Funding Circle LogoFunding Circle Review

Visit Website

With sites in the U.S., the U.K., Germany and the Netherlands, Funding Circle is positioning itself to be a global leader in peer-to-peer lending. They focus exclusively on small business loans. US Funding Circle’s founding owners (small businessmen themselves) launched the brand in 2013 to fill a void within the traditional bank lending system. Their goal was to help other small business owners secure funding that they otherwise wouldn’t be able to get. To date, Funding Circle has lent more than $8 billion globally to 62,000 businesses. To qualify, small businesses must have been in operation for more than 24 months.


  • Each borrower gets a personal account manager who is their dedicated contact throughout the application process
  • Once you apply online, you'll typically hear from a loan specialist within 1 hour
  • All loans are secured (most P2P loans are unsecured)
  • Great customer service via phone, email and a blog
  • Robust platform


  • No personal loans
  • No start-up business loans
  • They only lend to established small business owners
  • Applicants must pay an origination fee of 3.49% to 7.99% which is deducted from your loan proceeds
  • You must be an accredited investor to invest

Peerform Review

Visit WebsitePeerform logo

Peerform, launched by Wall Street executives, has been around since 2010 – a healthy life-span for a peer-to-peer lending site. Although they’re not as well-known as Lending Club or Prosper, they bring a healthy alternative to P2P lending. For one thing, their minimum credit score is lower than all other sites we’ve seen, and you don’t have to be currently employed to qualify if you can provide other sources of income. The downside, perhaps, is for eager investors – their minimum to invest is $100,000, clearly leaving out a huge portion of everyday people in their process.


  • Customer support via phone, live chat and email
  • You don’t necessarily have to be currently employed to qualify if you can provide documentation of another source of income
  • Lowest minimum credit score, so borrowers with less than stellar credit have a shot at getting a loan
  • If your loan isn’t totally funded by investors you have the option to accept or to decline the partially funded loan
  • Investing with Peerform allowed in all 50 states


  • $15 check processing fee if making loan payment with check
  • Only 36-month payback term is available
  • Loan amounts are smaller and APR higher
  • No weekend customer support hours
  • Borrowers are charged a collection fee if loan goes into default
  • Must be an accredited investor to invest with Peerform
  • With a minimum investment of $100,000, they are geared more toward institutional investors rather than everyday ones

SoFi Review

Visit WebsiteSoFi logo

Social Finance, Inc. (commonly known as SoFi) began as a peer-to-peer lending site focusing solely on student loan refinancing, but in early 2015 they expanded their product line into personal loans. Their target borrower is an early career professional, who has the additional options of MBA loans and mortgage loans. APR rates and terms differ for each type of loan. What we like is their nontraditional underwriting approach, which takes into account merit and employment history, among other factors, to provide financing for those who may not be able to qualify elsewhere. In 2014 SoFi acquired $200 million in Series D funding led by Third Point Ventures and affiliates, but they continue to follow the peer-to-peer lending model with everyday investors.


  • Unique member benefits: career support and job placement assistance
  • Unemployment protection (they temporarily suspend loan payments if you lose your job)
  • Customer support 7 days a week via phone and email
  • No borrower origination fee
  • Impressively low student loan refinance rates: 1.92%-5.17% variable or 3.5%-7.24% fixed (5, 10, 15 or 20 year terms available) for both Federal and private student loans
  • May accept co-signers for student loan refinancing and MBA loans only, depending on situation (contact them)
  • Parent PLUS loan refinancing


  • No small business loans offered
  • To qualify for a loan, you must have a degree from one of their selected Title IV accredited universities or graduate programs
  • Stringent eligibility requirements, including solid employment history, very strong monthly cash flow and credit score
  • Little to no information on website about their investment options – you must contact them
  • A number of customer complaints on online forums about poor customer service

The Morphing Business of Peer to Peer Lending Sites

Although Lending Club and Prosper have their drawbacks they still clearly dominate the peer-to-peer lending site market. But it’s a service that’s been in pretty constant flux over the last few years. The unfortunate reality for true peer-to-peer diehards is that most of these services don’t seem to be able (or willing) to survive and thrive without some kind of institutional funding from investment groups, rather than large banks. Peer-to-peer lending is still morphing, so we’ll keep an eye on where the industry goes from here.

We Want To Know What You Think!

Have you used one of our profiled peer-to-peer lending sites? If so, tell us your experiences. Do you already have a peer-to-peer lending site in mind and don’t see it listed here? Let us know and we’ll make sure to add it to our review.

Was this article helpful?

Thank you for your feedback!

Tell us how we can make your experience better next time.

Back to Top

We use cookies to enhance your website experience. By continuing to use our site you agree to the use of cookies in accordance with our policy. Click for more information to find out what cookies we use, what they do and how you can disable them.