Best Peer-to-Peer Lenders for Bad Credit of November 2024

ElitePersonalFinance
Last Update: September 25, 2023 Loan Reviews Loans

While traditional lenders turn consumer deposits into loans, peer-to-peer (P2P) lenders use capital from investors. The P2P business model allows individuals and institutions to tailor their risk tolerances to borrowers’ credit scores, and the dynamic increases your chances of obtaining a loan. For example, borrowers with bad credit often incur higher APRs. And this happens because the lower your credit score, the higher your perceived probability of default. However, since some P2P investors have higher risk tolerances than direct lenders, they’re willing to extend bad credit financing to earn a higher rate of return. As a result, P2P lenders often provide funding when others won’t.

There are only a few bad credit P2P lenders in the marketplace, so your choices are slim. However, our bad credit personal loan guide reviews more than 20 lenders with 35.99% or less APRs. Also, some don’t charge loan origination fees. Furthermore, we also reviewed 25 alternative lenders that offer better products than payday loans. So don’t settle for a 400% APR if you have poor credit.

Our marketplace also lists dozens of products for borrowers with bad credit. Moreover, applying does not require a commitment and won’t impact your credit score. As a result, it’s prudent to shop around, and doing so increases your chances of landing the best deal.

Best Peer-to-Peer Lenders for Bad Credit of November 2024

Companies like Upstart and Happy Money provide P2P loans that meet your and investors’ objectives. Therefore, the business model satisfies both parties and helps fill the void between traditional and alternative lenders. Moreover, our list also includes loan comparison sites because they offer P2P loans. However, some also provide standard personal loans and alternative loans, so their networks have many products.

Lender:Loan Amount:APR:Min. Credit Score:Type:Best For:
Upstart $1,000 – $50,0004.6% – 35.99%300Peer-to-peer lenderLow credit scores, high DTI ratios
PersonalLoans$1,000 – $35,0005.99% – 35.99%580Connects to peer-to-peer lendersShort and long-term personal loans
Happy Money$5,000 – $40,0005.99% – 24.99%550Peer-to-peer lenderA stable credit history

Upstart

Loan Amount:$1,000 – $50,000
APR:4.6% – 35.99%
Min. Credit Score:300
Approval:1 – 7 Days
Terms:3 – 5 Years
Fees:
  • Loan origination fee of 0% – 12%
  • Late payment fee of 5% of the amount due, or $15, whichever is greater, after a 15-day grace period
  • Insufficient funds fee of $15
  • Paper documents fee of $10
  • There are no prepayment fees
Qualification Criteria:
  • Minimum age: 18
  • Residing in the United States (don’t have to be a citizen or permanent resident) (exception for military)
  • Minimum credit score of 300 in most states
  • No bankruptcies or public records on your credit report
  • No accounts that are currently in collections or delinquent
  • Living in the 50 US states
Average Borrower Profile:
  • Borrows roughly $8,600.
  • Incurs an APR of 23.98% on a five-year term
  • Achieves approval nearly twice as often than traditional lenders with a FICO Score of 620 to 660
  • The CFPB found Upstart’s AI risk model approves 27% more borrowers and they incur APRs 16% lower than traditional lenders
Best For:Low credit scores, high DTI ratios
Check rates

Terms: Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).

Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.

The full range of available rates varies by state. A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.44% and a 8.64% origination fee of $864, for an APR of 22.88%. In this example, the borrower will receive $9136 and will make 60 monthly payments of $257. APR is calculated based on 5-year rates offered in March 2023.  Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.

While most loans through Upstart are unsecured, certain lenders may place a lien on other accounts you hold with the same institution. It is important to review your promissory note for these details before accepting your loan.

When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information may be reported to the credit bureaus.

The APR calculation compares the two models based on the average APR offered to borrowers up to the same approval rate. The hypothetical credit-score only model used in Upstart’s analysis was developed in connection with the CFPB No Action Letter access-to-credit testing program and was built from a traditional credit score only model trained on Upstart platform data. APR for the scorecard was averaged for each given traditional credit score grouping.

While automated recurring payments are easy to set up, payments by check or one time electronic payments can also be used to repay a loan. Borrowers have the flexibility to choose the repayment method that works best for them.

This information is based on actual borrowers as of 4/1/2023 who identified “credit card refinancing” as their primary use of funds and paid off at least 51% of their outstanding credit card debt within 3 months of taking out the loan. Out of these actual borrowers, some could have experienced an increase or decrease in their credit score. This information reflects the overall average change in credit score points experienced by this group of borrowers as identified above.

The majority of borrowers on the Upstart marketplace are able to receive an instant decision upon submitting a completed application, without providing additional supporting documents, however final approval is conditioned upon passing the hard credit inquiry. Loan processing may be subject to longer wait times if additional documentation is required for review.

Upstart is a P2P lender that lets you borrow $1,000 to $50,000, with APRs of 4.6% to 35.99% and terms of three to five years. The minimum credit score to qualify is 300, and applying won’t impact your credit profile. Upstart’s technology is unique because the company uses artificial intelligence (AI) and alternative data to assess credit risk. Metrics like your education and job history carry more weight in the analysis, and these variables can help offset a low credit score. As a result, Upstart is one of the best P2P lenders for bad credit.

Loan minimums vary by state, w