Looking for an alternative to traditional, market-based investing in the United States? You’re in the right place. Previously, we’ve reviewed the best P2P lending platforms in Europe as well as the United Kingdom. But in this article, we’ll be focusing on the US. If you’re an American investor, read on. We’ll give you details about the best P2P lending sites in the US.
P2P (Peer-to-peer) lending has a long history in the United States. The US was one of the first countries to launch online P2P lending platforms. The two oldest P2P lending sites in the US are Prosper Marketplace and Lending Club. They launched in 2005 and 2007, respectively.
Since then, the P2P lending marketplace has only gotten more crowded in America. But which platforms are worth your time and money? Which ones will provide good returns and a balanced portfolio? You can find out in this article.
We’ll be taking a look at the top P2P lending platforms in the United States. We’ll be ranking them based on four factors.
- Returns – We’ll detail the average returns investors can expect from each lending platform.
- Diversification – We’ll take a look at the different loan types offered by each US-based P2P lending platform.
- Features – We’ll examine features like minimum investment amount, buyback guarantees, auto-investing and secondary markets for buying/selling loans.
- Interface – We’ll discuss the overall experience of depositing money, investing, and using the P2P lending platform’s interface.
Let’s get started now, and examine the best P2P lending platforms in the United States.
Upstart is a US-based P2P lending platform that was first founded in 2012. Primarily, this platform focuses on consumer loans. These are usually used to help borrowers get out of credit card debt, or fund large purchases. Since it was founded about seven years ago, Upstart has issued more than $3.8 billion in loans. This makes it one of the most popular P2P lending platforms in America.
The rate of return depends on the loan you choose. It usually ranges from 5.6-9.2% based on the credit profile and risk of the borrower. Upstart has a relatively low minimum investment of just $100. This is within reach for most investors. It also has an easy-to-use auto-invest feature. However, it lacks any kind of buyback guarantee or secondary market. These features would be nice to have, but are not totally essential.
The two best things about Upstart are its slick user interface and its unique risk-grading system, which helps you choose the best loans in which to invest. The two worst things about Upstart are its relatively risky loans, and a lack of overall diversity in the types of loans available.
Sharestates was first founded in 2014. It has quickly become popular with investors looking for a P2P lending platform to use to invest in real estate. It has issued more than $1.96 billion in loans, which is quite high given how new the platform is. It’s open to both US customers and non-US citizens with a US-based bank account.
Sharestates exclusively offers real estate loans. These types of loans are usually considered to be safer than other types of loans. This is because they are secured by the value of real property. Interest rates usually range from 8-12%, with an average annual rate of return of 10.30%.
The minimum investment for Sharestates is quite high, however. You must invest $5,000 if you are a US resident, and $10,000 if you are not a US resident. It has an auto-invest feature, but lacks any secondary market. It doesn’t have a buyback guarantee. However, this is not as important since real estate loans are secured with property.
The two best things about Sharestates are its high-quality loans and easy-to-use autoinvest features. The two worst things are its relatively high minimum investment and the lack of liquidity of your investments.
Founded in 2013, GROUNDFLOOR is a P2P lending platform that focuses on real estate loans. It is similarly to Sharestates and a few others on this list. It has issued more than $22.4 million in loans since it was founded. There are more than 65,000 investors on the platform.
GROUNDFLOOR offers highly-variable interest rates, based on your appetite for risk. You can get anywhere from 5.5-26% interest on your investments. The average return for most customers is about 10%.
You can start investing with just $10 on GROUNDFLOOR. This is better than most of the other platforms on this list. No matter how much cash you have to spare, you can get started with this platform.
Unfortunately, GROUNDFLOOR is weak when it comes to features. It has no automated investment tools, secondary market or buyback guarantee. Most other picks on this list offer at least one of these features.
The two best things about GROUNDFLOOR are its low minimum investment, and the ability to get very high returns if you’re okay with higher risk. The two worst things about it are its relative lack of loan diversity and its lack of an auto-invest feature.
4. Funding Circle US
Funding Circle was first based in the UK, but has also become one of the best US P2P lending platforms. The US branch of Funding Circle was first established in 2013, and has grown rapidly since then. Today, it has issued more than $2.2 billion in loans.
Funding Circle primarily focuses on unsecured business loans for small-to-medium-sized enterprises (SMEs). It offers loan terms between 6 months to 5 years. Typical returns on loans are between 4-9.5% depending on the loan, with an average return of between 5.7-7.8%.
Funding Circle does have an auto-invest feature, which lets you automatically invest in thousands of loans based on your desired terms. It has no buyback guarantee or secondary market. Also, its minimum investment is relatively high. You’ll need to invest at least $500 to get started. This may not be a great option if you’re a new investor without much capital to work with.
The two best things about Funding Circle are its great track record and wide diversity of business loans. The two worst things about this US P2P lending platform are its high minimum investment, and a relatively high 1% service fee.
5. Lending Club
Lending Club is one of the oldest and best US P2P lending platforms. It was first founded in 2007, shortly after Prosper. It’s open to only US-based investors. It has issued a total of more than $50 billion in loans, which is the highest number on this list.
Lending Club offers a wide diversity of loans, including business loans, consumer loans and car loans, and even medical financing. This makes it easier for you to diversify your portfolio. Its returns on each loan typically range from 4-7%, with an average of 5.45%. This is lower than some competitors, but still pretty good since Lending Club offers relatively low-risk loans.
However, its minimum investment is high at $1,000. Once you do invest, though, you can easily browse thousands of loans and invest manually. You can also automatically invest in a large portfolio of loans using its automatic investing tools.
The two best things about Lending Club are its huge variety of loans and easy-to-use auto-invest feature. The two worst things about this P2P lending platform are its high minimum investment, and relatively low returns compared to some other lending platforms.
Founded in 2013 in America, LendingHome is one of the best US P2P lending websites for investing in real estate. It has issued more than $3 billion in loans. It specializes in real estate loans and hard money loans.
Typical interest rates for its loans range from 5-10%, with average annual returns of around 7.25% for most investors. Every investment is backed with real estate, which helps reduce risk. LendingHome also has a great auto-invest feature which lets you invest in qualifying loans automatically.
However, LendingHome has a high minimum investment of $1,000. If you want to invest manually, you need to invest at least $5,000. It’s also only open to accredited investors. This means you will need to provide proof of your income and/or assets to qualify as an investor in LendingHome.
The two best things about LendingHome are that its loans are all backed by real estate, and its streamlined auto-invest tool which makes investing easy. The two worst things about this platform are that it has a high minimum investment, and that it is only open to accredited investors.
Streetshares was first started in 2013, and has quickly grown into one of the best US-based P2P lending platforms since then. It focuses primarily on business loans, and has issued more than $100 million in loans. Uniquely, Streetshares is a veteran-run business and mostly offers loans to qualified US veterans.
It offers an interest rate of about 5% on investments, which is fairly low. However, its loans seem to be relatively high-quality. This means a lower overall risk. In addition, you invest in “Business Bonds,” which allow you to spread your money through thousands of different loans.
You can start investing on Streetshares with just $25. This means it is very easy to get started with this platform, even if you do not have a lot of cash to spare. In addition, the Streetshares auto-invest feature lets you invest in Business Bonds automatically, so you don’t have to spend as much time managing your investments.
The two best things about Streetshares are its unique investment structure, and its long track record of providing a 5% return rate. The two worst things about this P2P lending platform are its lack of loan diversity, and low overall returns compared to some competitors.
PeerStreet was first founded in 2014. It has grown quite a bit since then, and has issued more than $2 billion in loans. PeerStreet is focused on real estate loans exclusively, and all of its loans are backed by real estate and have less than a 75% loan-to-value (LTV) ratio. Loan terms range from 6 to 36 months.
Return rates from Peer Street typically average around 6%-9%, depending on the loans in which you choose to invest. You can invest manually using PeerStreet, or take advantage of its auto-investing tool. This lets you invest in loans that meet your criteria automatically whenever you deposit cash.
However, PeerStreet has a relatively high minimum investment of $1,000. If you’re a newer investor and not ready to commit that kind of cash, it’s probably not the best option for you. You may want to get started with one of the other US P2P lending platforms on this list.
The two best things about PeerStreet are its high-quality real estate loans, and its streamlined auto-investing feature. The two worst things about this platform are its high minimum investment, and lower returns compared to some other real estate investing platforms.
8. Fund That Flip
As the name implies, Fund That Flip focuses on “hard money” real estate loans. This type of loan is usually used by house “flippers” to restore and renovate homes, then resell them for a profit. Since this US-based P2P lending platform was founded in 2014, it has funded hundreds of redevelopment projects.
Return rates for hard money loans are quite good. Fund That Flip offers rates of between 9-12%, with an average of about 10.75%. Hard money loans are also secured by real property. This helps reduce your risk as an investor.
However, this platform usually only has a handful of open projects at a time. As of writing, only 3 projects were available for investors to choose from. Fund That Flip has no auto-invest feature. It also requires a minimum investment of $5,000, which is quite high.
The two best things about Fund That Flip are its high returns, and the fact that your investments are all backed by real estate. The worst things about this platform are its high minimum investment, and the lack of loan diversity.
9. Patch of Land
Patch of Land is another one of the best US P2P lending platforms for investors looking to get exposure in real estate. It was founded in 2013. Uniquely, it accepts investors from all over the globe, not just US investors. Since it began, Patch of Land has issued more than $725 million in loans.
Patch of Land issues loans with interest rates ranging from 7.5-12%. Its average annual rate of return is about 10.56%. This means it’s a good option if you want high returns. It also does a lot of groundwork related to its loans. This includes doing due diligence about developers and pre-vetting them before accepting their loans.
Patch of Land is only open to accredited investors. You also will have to deposit at least $5,000 into this platform to begin using it, even if you are an accredited investor. This means most retail investors won’t qualify to use this platform.
The two best things about Patch of Land are its consistent returns, and pre-vetted loans. The two worst things about this platform are its high minimum investment, and the fact that it’s only open to accredited investors.
10. Crowd Lending Inc.
This P2P lending platform was founded in 2015, and focuses on real estate loans for commercial companies and developers. It uses a fund-based structure. This provides investors with a wide variety of loan products. The target annual returns of this fund are 8% per year. Its fund was first begun in 2016, and it has hit its target every year since then.
You can automatically invest and reinvest your earnings with Crowd Lending, Inc. This makes it a good choice if you want a hands-off approach to investing.
There’s one big caveat, though. Like a few other P2P platforms on this list, Crowd Lending, Inc is only available to accredited investors. You need to prove an income of $200,000 per year for 2 years, or a net worth of $1 million or more (excluding your residence).
Not only that, but the minimum investment is ridiculously high. You need to invest at least $50,000 to get started with Crowd Lending, Inc. That’s the highest on this list by far.
The two best things about Crowd Lending, Inc. are its high returns and long track record of success. The two worst things are that it’s open only to accredited investors, and has a huge minimum investment.
Prosper is the oldest and most reputable US P2P lending platform. It’s definitely one of the best US P2P investing websites for new investors. It was founded in 2005, and it has issued more than $15 billion in loans since then. Only Lending Club has funded more loans.
Prosper focuses on consumer loans, which are relatively risky. You can expect interest rates on loans of between 3.4-8.5%. The average rate of return is about 5%. You can browse tens of thousands of loans manually to invest, or you can use its autoinvest feature. By specifying your preferred loan terms and rates, you can automatically build your portfolio quickly and easily.
It’s easy to get started and sign up. The Prosper user interface is not very good, but you can still set up an account quickly. You also only need to invest $25 to start. This is one of the lowest of any of the US P2P lending platforms on this list.
The two best things about Prosper are its enormous number of loans and its low minimum investment. The two worst things are its relatively low returns, and its lack of other loan types beyond consumer loans.
Start investing with one of these P2P lending platforms in the US today!
If you’re a US-based investor, we hope you’ve found this list of the best P2P lending platforms in the US to be helpful. If you use this guide and a bit of your own research, you’re sure to find the best option for investing your cash!