David Allan

Expertly compared by David Allan

Products Updated October 24, 2018

Peer to Peer Loans

If you are looking for a peer to peer loan then we can help. View and compare our selection of peer to peer lenders from our selection below and see who is offering the cheapest deals and loan rates on the market. These types of loans offer an alternative from typical high street lenders.

This calculator will give you an idea of costs. The exact amount and APR payable will be provided from the lender subject to credit and affordability checks.

Your monthly payment will be:

£136.90

Interest on this loan will be:

£714

Annual Percentage Rate (APR):

3.7%

Total repaid will be:

£8,214

3 providers expertly compared:

Learn More
Good Credit
Rated 5/ 5

Zopa Why?
Why?

This provider is our Expert’s Choice in its category as it won tops marks for the following.

  • TRUST
  • VALUE
  • EXPERTISE & KNOWLEDGE
  • CUSTOMER SERVICE

Learn more about how we review and assess the providers here on Lending Expert.

Loan Amount
£1,000 - £25,000

Representative APR
3.1%

Loan Term
1 - 7 years

Loan Type
Peer to Peer Lender

Status
Homeowners & Tenants

Zopa directly match people looking for a personal loan with people looking to invest. It's their way of making money simple and fair. Since 2005 Zopa have approved a staggering £2.92 billion in loans.

Representative Example

3 providers expertly compared:

Available via broker only
All credit types
Rated 4.8/ 5

RateSetter

Loan Amount
£500 - £35,000

Representative APR
3.9%

Loan Term
2 - 5 years

Loan Type
Peer to Peer Lender

Status
Homeowners & Tenants

Rate Setter is a peer-to-peer lender offering personal loans from £500 - £35,000 over 2 to 5 years. Loans available to both tenants and homeowners. Money could be transfered into your account within just a few days.

Representative Example

3 providers expertly compared:

Available via broker only
All credit types
Rated 4.5/ 5

Lending Works

Loan Amount
£1,000 - £25,000

Representative APR
7.9%

Loan Term
1 - 5 years

Loan Type
Peer to Peer Lender

Status
Homeowners & Tenants

Lending Works is a peer to peer lender that connects people that want to invest their money with borrowers who want to get a better rate on their personal loan. Loans available from £1,000 to £25,000 over 1 -5 years.

What are peer to peer loans and how do they work?

Peer to peer lenders

Peer to peer lenders

Peer to peer lending is basically people lending money to other people who are not friends or family. This type of lending does not go through any traditional financial institution, such as a bank, but instead uses an intermediary company such as Zopa or RateSetter that vets applicants and decides whether they are a low enough risk lending to. The majority of peer to peer lending is done as unsecured loans and the interest rates as set by the lenders in relation to the individual. Higher risk lenders attract higher interest rates, and lower risk lenders attract lower interest rates.

What’s in it for the intermediaries?

The intermediary companies that actually administer the loans are for-profit organisations who generate their revenue from the fee that is charged in order to take out the loan. They also make money from the investors in the form of a fund management fee, which is either a fixed amount or percentage of the loan amount. Operating completely online, there are also few overheads, especially as many of the processes are automated, so running the company is cheaper than for mainstream lenders.

Related: Peer to Peer Business Loans

Who can apply for a peer to peer loan?

There are really only three things that you need in order to qualify for a peer to peer loan. Firstly you will need to be able to confirm your identity, usually through a passport or driving licence, you will need evidence of your income and ability to make the repayments, in the form of pay slips and bank statements, or the equivalent of these if you have slightly different circumstances, and finally you will need a good credit history and ben able to demonstrate a good track record of repaying your debts.

What interest rates will i pay?

This will depend on a number of factors, but it will mostly be related to the amount that you borrow. If you borrow a small amount, or a large amount you will find that you will pay higher interest rates of around 8%. If you have a loan of around £5000 to £20,000 you will find that you pay between 4% and 5% depending on the term that you choose to repay the loan over. It is also worth noting that you don’t generally have early repayment fees.

 

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Rating: 4.6 / 5 with 27 votes

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