The Top 3 Peer-to-Peer Lending Sites Compared

One of the biggest victims of the current recession has been the liquidity market. Credit has almost disappeared, forcing practically everyone in need of a loan to find new ways to obtain one.

“Necessity is the mother of invention,” as the saying goes, and the need for low-cost personal loans has lead to the invention of a new kind of financing: peer-to-peer loan institutions. They’re very new (as in, the industry still has a lot of growing pains to be worked through), they’re a product of the Internet, and they’re growing by leaps and bounds. Go Banking Rates has compared and contrasted the biggest names in the business, and here’s what we found.

Lending Club

Requirements for getting loans: Debt-to-income ratio below 25%; resident of U.S.; over 18 years old; valid bank account and valid Social Security number; minimum FICO score of 660; strong credit history (Read this for more information).

Interest rates: Borrowers with the best credit scores will get the most favorable interest rates on their loans. At Lending Club, rates range from 7.05% to 21.21%.

Loan fees: Origination fee – 0.75% – 3.00%; default fee – $15; late payment fee – $15; early payment fee – none

Loan term: 3 years

What they’re saying: “It was an awesome feeling to think I would be saving over $500 because of a much better rate, then also paying the necessary interest to friends and business associates rather than huge corporate banks in whom I have nothing short of anti-confidence.” – Matt Jabs,

Save for Your Future


Requirements for getting loans: Minimum credit score 640; must live in state where Prosper loans are available (Maine, Kansas, Iowa, and North Dakota excluded); have bank account and Social Security number; pass anti-fraud and identity verification protocols. Interest rates: 0% – 35.00%, depending on individual credit

Loan fees: origination fee – 3.00%; default fee – $15; late payment fee – $15; early payment fee – none

Loan term: 3 years

What they’re saying: “Because this loan funded on the day I really needed it, I was able to save my home from going into foreclosure and avoid a grand mess. I have taken care of all requirements presently, and my financial plan is working. Now I can breath!!” – Borrower,

IOU Central

Requirements for getting loans: For small business owners only. Must provide detailed financial information on business, including monthly bank statements.

Interest rates: Varying; site is auction-based.

Fees: origination fee -3.75%; default fee – $25; late payment fee – $25

Loan term: 1, 2, and 3 years


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