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The peer-to-peer lending and investing industry makes billions of dollars each year. As each year passes by, statistics show an increase in the number of people who want to participate both as borrowers and as investors. However, there are many things to consider before making the final decision.

The first thing you should take into consideration is whether the peer-to-peer lending industry is right for you and your financial goal. You should ask yourself questions such as: How much money would I need?  What will I be using the money for?

Furthermore, you should consider your current financial situation, your credit score, your credit history, the current interest rate on a debt you might have, and the list goes on. When it comes to investing, you need to do your own due diligence. Do your research.

In the end, if you find a loan that is offering a lower interest rate than what you are currently paying, you still need to consider some factors. For instance, find out whether there is a penalty for repaying the loan early or whether the interest rate is fixed or variable.

In this article, we will briefly explain to you which are the best peer-to-peer lending companies and why. Please, note that, before you get involved with any of these companies, you need to do your own research on the lending company itself. Now, let’s take a look at the four best peer-to-peer lending companies.

LendingClub | NYSE: LC

Minimum Credit Score: 600

Est. APR: 5.99% – 35.89%

Loan Term: 3 to 5 years

LendingClub is the biggest and most reputable online peer-to-peer lending company. Since 2007, when the company was launched, LendingClub has successfully loaned over $36 billion in loans, including personal loans.

Not only this, but LendingClub is the first-ever publicly traded peer-to-peer lending company, dominating the market with a 45% share. As a reputable online lender, LendingClub offers both personal and business loans ranging from $1,000 up to $40,000 and up to $300,000 for small businesses.

Origination fee: up to 6% of the loan amount

Late fee: Greater of $15 or 5% of payment after the 15-day grace period

Prepayment fee: None

Read a full LendingClub review.

Prosper

Minimum Credit Score: 640

Est. APR: 6.95% – 35.99%

Loan Term: 3 to 5 years

Prosper is an online peer-to-peer lending company that has been operating since 2006. According to reputable online sources, since 2006, the company has issued more than $16 billion in loans. According to reliable sources, Prosper is amongst the giants in the peer-to-peer investing world.

In short, Prosper offers loans for various reasons, such as debt consolidation, home improvement loans, medical loans, etc. However, to be approved, the borrower must have a credit score of at least 640, high income, and well-established credit history. Further, Prosper offers the option of adding a co-borrower, thus improving the chances of getting a loan.

Origination fee:  2.4% to 5% of the loan amount

Late fee: Greater of $15 or 5% of payment after the 15-day grace period

Prepayment fee: None

Read a full LendingClub vs. Prosper review.

Funding Circle | LSE: FCH

Minimum Credit Score: 620  

Est. APR: 11.67% – 36.00%

Loan Term: 6 months to 5 years

Funding Circle connects small businesses with investors who are willing to fund them. This peer-to-peer lender offers loans up to $500,000 for up to five years. The best part is that the funds will be available within three business days if you are approved.

Further, according to reputable sources, since 2010, the company has worked with over 40,000 businesses in the U.S. and U.K. Typically, Funding Circle is focused on small to medium-sized companies. Also, with Funding Circle, borrowers can choose a loan term between 6 months and five years.

Origination fee: 3.49% – 6.99% of the loan amount

Late fee: Greater of $15 or 5% of payment after the 15-day grace period

Prepayment fee: None

Upstart

Minimum Credit Score: 620

Est. APR: 4.73% – 35.99%

Loan Term: 3 to 5 years

Upstart is not a traditional peer-to-peer lending platform. The company uses data beyond your credit history and score when evaluating your creditworthiness. For instance, Upstart considers factors such as education, area of study, job history, and current occupation. These factors are helpful when the company is trying to determine your likelihood to repay your loan.

Since 2012, Upstart has helped many borrowers with a maximum loan amount of $50,000. As a non-traditional peer-to-peer lending company, Upstart offers investors the opportunity of setting up an IRA.

Origination fee: up to 8% of the loan amount

Late fee: Greater of $15 or 5% of payment after the 15-day grace period

Prepayment fee: None

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