Peer-to-peer (P2P) lending has come a long way since its early internet-age roots. What began as an alternative to traditional bank loans has grown into a multi-billion-dollar industry that connects borrowers directly with investors through online platforms. Whether you’re someone looking to earn interest on your spare cash or a borrower hoping to avoid the red tape of traditional lending, P2P platforms offer an intriguing middle ground.
But not all platforms are created equal. Some cater to personal loans, others specialize in business financing, and some operate with tighter risk controls than others. In this post, we’ll take a close look at the top P2P lending platforms in 2025, what makes each of them stand out, and what you should know before diving in.
What Is Peer-to-Peer Lending?
Before we get into rankings, let’s briefly define what we’re talking about.
Peer-to-peer lending is a method of debt financing that allows individuals to borrow and lend money without using a traditional financial institution as an intermediary. Instead of banks, you have platforms that match borrowers with investors. The platform handles servicing, payments, and sometimes risk assessments, for a fee.
Borrowers typically get lower interest rates than they would from a bank. Lenders get higher returns than a savings account. Of course, those returns come with some risk, including the possibility of borrower default.
Considerations Before Choosing a Platform
You should consider what separates a decent P2P platform from a great one. Here are a few important criteria to consider:
- Risk management tools: Does the platform have credit checks or risk grades?
- Liquidity: Can lenders access their money quickly if needed?
- Fees: What percentage does the platform take from loans or returns?
- Track record: How long has it been operating, and how transparent is its performance data?
- Regulation: Is the platform registered and compliant with financial regulations?
With these in mind, let’s explore the best peer-to-peer lending platforms currently available.
1. LendingClub
LendingClub is one of the oldest and most well-known P2P lending platforms in the United States. Since launching in 2007, it has facilitated billions in loans. In fact, it’s transitioned into more of a hybrid model, operating with a banking charter now, but it still offers a marketplace for investors.
Pros:
- Transparent credit grading system for loans
- Strong regulatory compliance
- Automated investing options
Cons:
- Limited investment opportunities since becoming a bank
- Minimum investment per note is $25, but diversification can still be costly for small investors
LendingClub is best for investors who value a more hands-off approach and prefer platforms with a long, stable history.
2. Prosper
Prosper is LendingClub’s longtime rival and has also been around since 2006. It still operates purely as a marketplace lender, connecting individual borrowers with investors.
Pros:
- Detailed borrower profiles and risk ratings
- Low minimum investment ($25)
- Consistent returns historically, with risk tiers clearly defined
Cons:
- Loan default rates can vary depending on economic conditions
- Investors must manually build portfolios unless they use an auto-invest tool
Prosper is a solid choice for retail investors who like transparency and control over their lending portfolio.
3. Upstart
Upstart is a newer player but has made waves with its use of artificial intelligence in credit scoring. Founded by ex-Googlers, Upstart uses machine learning to evaluate borrower risk, taking into account education, employment history, and even SAT scores.
Pros:
- Modern underwriting approach
- Higher approval rates for younger borrowers or those with thin credit files
- Solid historical returns for investors
Cons:
- Minimum investment is higher than some competitors
- Not a pure P2P model anymore; many loans are now funded by institutions
Upstart is ideal for tech-savvy investors who want exposure to an AI-driven lending model.
4. Funding Circle
If you’re looking to support small businesses rather than individual borrowers, Funding Circle is worth a close look. This UK-based platform operates in several countries and specializes in small business loans.
Pros:
- Focus on business loans, not personal lending
- Typically higher loan sizes and returns
- Transparent performance data
Cons:
- Higher minimum investments
- Less liquidity than platforms focused on shorter-term personal loans
Funding Circle suits investors comfortable with medium-term commitments and interested in supporting business growth.
5. PeerBerry
PeerBerry is a European platform that connects investors with loans from multiple lending partners. It primarily offers short-term consumer loans, often underwritten by non-bank lenders.
Pros:
- High yields, often in the 10–12% range
- Buyback guarantees on many loans
- Easy-to-use interface
Cons:
- Higher risk, especially during economic downturns
- Heavily reliant on lending partners’ financial health
PeerBerry is a good fit for experienced investors who understand credit risk and are comfortable with international markets.
6. Mintos
Mintos is another European platform but operates more like a P2P lending marketplace. It offers a vast range of loan originators across different countries and sectors, from personal loans to car financing.
Pros:
- Extremely diversified loan offerings
- Strong secondary market for liquidity
- Automatic investment options available
Cons:
- Complexity can overwhelm beginners
- Due diligence is on the investor to research loan originators
Mintos is best for investors who want access to international markets and are willing to do a bit of homework.
7. Kiva
Kiva takes a different approach. It’s not about earning a financial return but about social impact. Kiva allows individuals to fund microloans to entrepreneurs and small businesses in developing countries.
Pros:
- Focus on social good and global impact
- Zero interest for borrowers
- Minimal risk of fraud due to vetting partners
Cons:
- No financial return on your capital
- Risk of non-repayment still exists
Kiva is for people who want to lend with heart rather than for profit. Think of it as philanthropic lending, not investing.
Tips for Lending Wisely
No matter which platform you choose, here are a few parting tips to keep your wallet (and nerves) safe:
- Diversify: Don’t put all your funds into one borrower or loan type. Spread it around.
- Start small: Get a feel for the platform before committing large sums.
- Reinvest returns: Compound interest works wonders, even in P2P lending.
- Check platform health: Platforms can fail. Choose ones with strong financials and good reviews.
Final Thoughts
Peer-to-peer lending platforms offer a flexible, often rewarding way to invest or borrow. They bring financial services closer to the people and away from the often slow, opaque world of traditional banking. Whether you’re drawn to LendingClub’s institutional polish, Mintos’s global diversity, or Kiva’s social mission, there’s a platform out there that matches your goals.
Just remember, this is real money and real risk. With the right research and a sensible strategy, P2P lending can be a great addition to your financial toolkit.
And when your parents ask what P2P platforms are, explain that they work like mini-banks you can access from your computer, no fancy offices or formal meetings required.