Which Peer-to-Peer Lending Company is Better for Bad Credit?

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Peer to peer lending can be a good option for those who have bad credit and do not want to have to go through traditional means like banks or credit cards to be able to get access to money. An overview of peer to peer lending companies will give some insight as to which ones can become a good option for those who are struggling with their credit score or other negative items that would restrict them from more heavily regulated financing. However, also keep in mind that some peer-to-peer lenders can be just as stringent as the banks, so they may not really work for those with poor credit.

Upstart versus Lending Club

Lending Club is one of the most well known peer-to-peer lenders online due to their age and consistent presence. However, they are also closer to traditional lenders in their requirements and usually require a FICO score of at least 600, which eliminates most potential borrowers with bad credit. Lending Club will also tend to give borrowers with poor credit a lower “grade” which means that interest rates will be higher. See our complete Lending Club review here.

Upstart’s motto is “You are more than your credit score.” Upstart considers things like education history, work experience and credit history when deciding a loan. For example, recent grads without much work or credit history can rest assured that their academic records can be considered as part of their application. Check out our full Upstart review here.

Peerform vs Prosper

Peerform has minimum FICO score requirements for most borrowers, but they will consider income sources aside from a traditional job. Peerform is a newer option but they do require an origination fee on top of the loan amount. They may be a turnoff for some borrowers.

Prosper is another big name in peer-to-peer lending online. They were the original peer-to-peer lender and have been in business since 2005. Because of their reputation, they also tend to look at more traditional financial indicators like a bank and require higher credit scores, which would exclude some borrowers with bad credit. However, they offer loans up to $40,000 with no prepayment penalties.

If your credit isn’t quite good enough for a Prosper or Lending Club loan and you don’t want to pay extra fees, Upstart may be the way to go.