Marketplace and community lending alternatives — how each type works and which one fits your situation.
If a bank has turned you down or a payday loan would cost too much, there are other places to borrow money. Platforms that connect borrowers directly with individual lenders — or with a pool of community members — have been around since the mid-2000s. The landscape looks different today than it did even a few years ago, but real options remain.
This page explains what each type of platform actually does, who each one is built for, and how to figure out which one makes sense for your situation. For people in an immediate crisis, note that these are all loans — they have to be paid back. If you are behind on rent or utilities right now, check whether emergency assistance or charity help is available first. Start with the resources at financial help from local city, county and state assistance programs.
Four types of platforms — and who each one is built for
Not all of these platforms work the same way or serve the same person. Here is what each one actually does.
Prosper is the platform to look at if you have fair to good credit and need a larger amount — anywhere from $2,000 to $50,000. Individual investors fund loans through the Prosper marketplace, which is how it differs from a bank. Rates run from 8.99% to 35.99% APR depending on your credit profile, and there is an origination fee of 1% to 9.99% taken out of what you receive. Someone with a credit score around 640 will likely end up near the higher end of that rate range and should compare carefully before accepting any offer.
- Prosper works best for people who want to consolidate credit card debt or cover a larger expense, and who have steady income and a credit history that shows they can repay. More detail on Prosper is at the NHPB guide to Prosper loans.
SoLo Funds is a community lending app where individual members fund each other's small, short-term loans. Loan amounts run from $20 to $575. There is no credit check, which makes it one of the few options for people who are unbanked, new to the US, or rebuilding from a bad credit history. Borrowers set their own repayment date and can offer an optional tip to lenders and donation to SoLo. Understanding how that model works in practice matters before applying. More detail on SoLo — including an honest look at the costs — is at the SoLo Funds loan page.
MAF Lending Circles are run by Mission Asset Fund, a nonprofit. A small group of people each contribute a set monthly amount, and members take turns receiving the pooled money. Loans range from $300 to $2,400 with monthly payments typically between $50 and $200. The interest rate is 0%. MAF reports every payment to all three credit bureaus, so consistent participation can build or repair a credit score over time. This is the right fit for someone who wants to build credit and can commit to a monthly payment — not someone who needs cash by tomorrow. More on how Lending Circles work is at the Lending Circles page.
Oportun is a federally certified Community Development Financial Institution that makes personal loans to people with no credit history, bad credit, or no Social Security number. If you have an ITIN or a Matricula Consular card, you can apply — which makes Oportun one of the only regulated lenders open to immigrants and undocumented individuals.
- Loans run from $300 to $10,000 with an APR capped at 35.99%, and payments are reported to all three credit bureaus. There is an origination fee of up to 10% depending on your state, so factor that into what you actually receive. Oportun is not available in every state. More detail is at Oportun loans.
How these compare to banks and payday lenders
A traditional bank personal loan generally requires a solid credit score, steady employment history, and a debt-to-income ratio that many lower-income borrowers can't meet. That is why so many people end up at payday lenders, which are typically fast and require very little — but charge annual rates that can exceed 400%.
The platforms above sit in between. Prosper requires some credit history but accepts scores as low as around 600. SoLo Funds requires no credit history at all. MAF Lending Circles accept people with no credit file and no score. None of them charge anywhere close to what a payday lender charges, though Prosper's upper end of 35.99% APR is still a meaningful cost for borrowers who don't qualify for the lower rates.
If you have no credit history or a very low score and need more than $575, you may still have options — a guide to lenders that work with poor to fair credit is at the NHPB guide to loans for people with lower credit scores. If you have no bank account at all, start with options for a loan that does not require a bank account.
What happened to the peer-to-peer lending model
A few years ago, peer-to-peer lending was a larger industry. LendingClub was one of the most well-known platforms. In 2020, LendingClub shut down its retail peer-to-peer lending program when it acquired a bank charter and became a full digital bank. It no longer connects individual investors with individual borrowers. Today it offers personal loans as a bank — a different product through a different model. If you've seen LendingClub described as a peer-to-peer company, that information is out of date.
Prosper is the main marketplace lender still operating the original model in the US, where individual investors fund loans for individual borrowers. SoLo Funds is a newer, smaller version of that model focused specifically on micro-loans for underserved borrowers. MAF is not a marketplace at all — it's a nonprofit using a community lending structure that predates the internet and has existed in many cultures for generations under names like tandas, susus, and cundinas.
Using a loan from any of these platforms to pay down debt
A loan from any of these platforms can be put toward existing debt if the math works in the borrower's favor. That means the rate on the new loan has to be lower than the rate on the debt being paid off. As an example - a Prosper loan at 18% APR paying off a credit card at 28% APR saves money over time.
A SoLo micro-loan used to pay a small overdue bill before a late fee kicks in can also make sense. It does not always work — borrowers near Prosper's rate ceiling may not save anything by switching debts at similar rates. More on this specific use is at guide to using peer to peer loans to consolidate debt.
The information on this page reflects how these platforms currently operate and is provided for general guidance only. Loan terms, fees, availability, and eligibility requirements change. Confirm current details directly with each platform before applying.
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