3 Best Peer-to-Peer Lending Sites in 2022

Peer-to-peer (P2P) lending is exactly what it is – a form of online lending in which individual investors work directly with people or businesses seeking loans.

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If you’re thinking about the risks of investing in peer-to-peer lending and prefer investing in the companies themselves instead, this is one way to go.

Let’s take a look at how peer-to-peer lending works, how to invest in peer-to-peer lending sites, and the top picks for this year.

How the loan between individuals works

You can find peer-to-peer loans on online lending platforms, and those who want peer-to-peer loans must go through a prequalification process to find out if they are eligible for the loans. A lender will give them an estimate of the loan terms, interest rate and fees. They can then submit their application based on these estimates. The lender will also perform a credit check and the applicant will know if they will get your loan approved.

Then the loan goes to the financing stage, where several investors review the loan. Lenders can decide whether or not to fund all or part of your loan, and it largely depends on how much you want to borrow.

Those looking for peer-to-peer loans can get enough loans from enough lenders and receive an electronic transfer. Lenders will get your fixed monthly payments disbursed based on your repayment terms.

It is important to note that although P2P lending is legal in the United States, the federal government does not insure the investments. If the borrower defaults, investors could lose their entire investment.

The best peer-to-peer lending sites for investors

Let’s take a look at the best peer-to-peer lending sites you might want to consider this year, both investing in a listed company and direct investing as a P2P lender.

Lending Club Corp. (NYSE:LC)

LendingClub Corp., headquartered in San Francisco, is a fintech market bank that offers education, financing and auto loan services. The company offers personal, educational and patient financing and automobile loans. Members can access a wide range of financial products and services through a technology-driven platform, which aims to help people spend less when they borrow and earn more when they save.

Lending Club had a record full year in 2021, with revenue of $818.6 million, up 157% from 2020. Market revenue increased 136% and net interest income increased 259% year over year. Lending Club achieved profitability under GAAP in 2021, with net income of $18.6 million for the year ended December 31, 2021, compared to a net loss of $187.5 million in 2020.

The main achievements of the year include the acquisition and integration of the bank, the consolidation of personal loans, auto refinance and purchase financing on a single origination platform and the acceleration of the acquisition of members.

A new recurring stream of net interest income increased 27% sequentially to $83.1 million as the bank’s loan book increased 22% from September 2021. Net income was impacted negatively by $56.6 million of notable items: $39.5 million of current expected credit loss (CECL) provisioning, less net charges and $17.1 million of net revenue deferral, both of which resulted by strong growth in retained loans. Earnings per share therefore fell by $0.53 in Q4 2021.

Upstart Holdings Inc. (NASDAQ: UPST)

Upstart Holdings Inc., headquartered in San Mateo, California, is a cloud-based artificial intelligence (AI) lending platform. The Company’s platform connects consumers, banks and institutional investors through a shared AI lending platform based on real risk. Upstart aims to improve access to affordable credit while reducing risk and lending costs by more accurately identifying risk and avoiding traditional credit score-based lending models.

In Q3 2021, Upstart’s total revenue was $228 million, an increase of 250% over Q3 2020. Total fee revenue was $210 million, an increase of 235% in year-on-year. Banking partners issued 362,780 loans totaling $3.13 billion, up 244% from last year.

Some highlights of the third quarter:

  • Operating income was $28.6 million, up from $12.2 million last year.
  • GAAP net income was $29.1 million, compared to $9.7 million in the third quarter of 2020.
  • Adjusted net income was $57.4 million, compared to $12.3 million in 2020.
  • GAAP diluted earnings per share was $0.30 and diluted adjusted earnings per share was $0.60.
  • Adjusted EBITDA was $59.1 million, up from $15.5 million last year.

Upstart expects fourth quarter revenue to grow from $255 million to $265 million, net income from $16 to $20 million, adjusted net income from $48 to $50 million and adjusted EBITDA from 51 to 53 millions of dollars.


We will end with an unlisted option. If you want to invest in Prosper, you must choose to invest in its market, personal loans and home equity. Create your account and build a personalized portfolio by selecting individual loans or using Prosper’s automatic investment tool. The money will be deposited monthly into your Prosper account. Prosper has facilitated over $20 billion in loans to over 1,190,000 people since 2005. Prosper manages all loan services on behalf of borrowers and matched investors.

Prosper Marketplace, backed by leading investors including Sequoia Capital, Francisco Partners, Institutional Venture Partners and Credit Suisse NEXT Fund, may be an option for you if you want to invest differently.

As of December 2021, approximately 60% of loan originations were rated AA-B and average loan sizes remained relatively stable month-over-month. The median monthly payment on the Prosper loan-to-income ratio (LTI) for December was 5.25%. The weighted average lending rate for December issues remained stable month on month.

Consider investing in P2P for new opportunities

If you’re looking for other opportunities, consider peer-to-peer lending to impact your portfolio. They may offer a high yield option, but it’s important to remember that they come with risk. P2P lending platforms require lower minimum credit thresholds than traditional banks, which would mean a higher risk of default on loans. Do your research before deciding if P2P investing is right for you.

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