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Peer to Peer Loans


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Representative APR


Representative Example: On an assumed loan amount of £750 over 12 months. Rate of interest 292% (fixed). Representative 171%APR. Total repayment amount £1351.20 and total interest is £601.20. 12 monthly payment of £112.60.*

* We do not know how many customers take out a loan or the APR, this calculation is based on the mean APR of the lenders we work with

Peer to peer loans allows you to borrow money through an online platform, but the funds are provided by other people, not by a lender or financial institution – hence the name ‘peer to peer.’ There are around a dozen peer to peer lenders in the UK, who essentially act as middlemen or matchmakers between borrowers who are looking for a loan and investors who are looking to lend out money and get a healthy return.

My Financial Broker works with all the peer to peer lenders in the UK, so you can borrow £1,000 to £35,000 repaid over 1 to 5 years. The actual loan is very similar to an online personal loan and the interest rate that you are charged will depend on your credit score. The checks are carried out online and you will often receive an instant quote and be able to receive funds on the same day if you are successful.

How Do Peer To Peer Loans Work?

Peer to peer loans connect borrowers who are looking for loans with other investors who are looking to get a return on their investment. Peer to peer lenders are less strict than other types of loan providers and are willing to offer loans for bad credit– and the interest rate you are charged is just adjusted to manage the risk.

You simply apply for an online loan and if you meet the criteria, you will be given a quote on the screen of how much you can borrow and the interest rate you will pay.

The peer to peer platform will process your application and the funds will be provided by one or several individual investors. The investors will be completely anonymous to you, so you will only be communicating with the platform such as Zopa, Ratesetter or Lending Works.

What Are The Benefits Of Peer To Peer Loans?

Good for borrowing large amounts

Peer to peer lenders can offer up to £35,000 which is a lot more than other payday lenders or guarantor lenders. This can be very useful if you are looking to consolidate debts, do home improvements, purchase a new car or use the funds for business purposes.

Alternative to banks

Many borrowers and investors are attracted to work with an alternative to banks or building societies. Customers find that peer to peer loans are faster to process and can often deal much better with their needs – plus, the interest rates are usually lower or more competitive.

Regulated and safe

The peer to peer lending industry is regulated by the Financial Conduct Authority giving you peace of mind that it is safe to use as borrowers and investors.

All credit histories considered

Peer to peer loans are especially receptive to people with bad credit histories including recent defaults and missed payments. The risk is managed by charging a slightly higher interest rate, whereby those with good credit histories get access to very low rates starting from just 3% APR.

Fully online

The entire process is online and there are no high street shops – which means that peer to peer loans can offer lower interest as the lender passes on the savings to you.


The idea of borrowing from other individuals may seem a bit awkward, but actually they are usually a group of investors and their identity is kept completely anonymous. Peer to peer lenders offer an intelligent platform for borrowing and investing money.

Can I Get Peer To Peer Loans For Bad Credit?

Yes, absolutely. Those with poor credit or fair credit are put into categories and the may be charged slightly higher rates of interest to mitigate the potential risks. The interest rates are only a little higher, of up to 34.9% - which is still significantly cheaper than most credit cards and short term loans.

Why Would I Use Peer To Peer Lending Compared To A Regular Bank?

Peer to peer lending offers more competitive rates than banks from 3% to 24.9% APR. The application is completely online and processed very quickly, with funds often available within 24 hours.

The main benefit is for those with adverse credit histories, who are often turned down by mainstream lenders, but now are able to access funds through peer to peer investors looking to get a better return on their investment.

Should I Invest Through Peer To Peer Lending?

From an investor’s perspective, peer to peer lending offers an opportunity to get a better rate than the average saving account, with returns of 6% to 9% usually available.

The potential return on investment is based on what group of people you would like to lend to, with good credit customers posing less risk (offering returns of 1% to 3%) and bad credit customers posing higher risks, but potentially greater returns (up to 9%).

The peer to peer business model allows investors to manage their risk quite effectively, however, it is not backed by the financial services compensation scheme.

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