Peer to peer lending– an alternative way to boost your savings

Filled your ISA? Disillusioned with low savings rates? Could peer-to-peer lending be an option for you?

But how exactly does peer-to-peer lending work, and what are the risks involved? Here we explain all you need to know to make the most of your money.

Product information supplied has been provided by each individual brand not MoneySuperMarket

Peer-to-peer lending accounts - Short term access to your money - Ordered by expected annualised rate after fees and bad debt

    • Provider/Product name 30 Day Easy Access Account

      Wellesley & Co

      30 Day Easy Access Account

    • Expected annualised rate after fees and bad debt 3.55%
      On Maturity
    • More details

      You lend to… Property developers. All lending is secured against property
      When do I earn interest? Interest is earned straight away even before your funds are matched
      Can I withdraw money before the term ends? Wellesley & Co will repay your funds to you on the expiration of 30 calendar days from the day on which they receive your 30 days’ notice, subject to liquidity limitations it’s likely your savings would have been matched to a longer term loan, see website for further information
      Provision fund? Yes, £1,440,470 as of March 2015
      How much can I save? From £10, with no maximum
      Founded in 2013, platform launched in November 2013

    • Go to site

    Great for
    Short term access to your money
    Start earning interest before your money is successfully matched
    But be aware that
    30 days notice is required before withdrawing your money
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name Tracker Rate

      Landbay

      Tracker Rate

    • Expected annualised rate after fees and bad debt Currently 3.5% per annum
    • More details

      You lend to… Landbay only facilitates secured lending against residential buy-to-let mortgages on tenanted properties in England and Wales
      When do I earn interest? Interest accrues immediately from the moment your funds are received
      Can I withdraw money before term ends? Yes, You can redeem your loan parts at any time and at no cost, subject to Landbay being able to reallocate your loan parts to new lenders. We typically only require a few days notice to facilitate Tracker Rate redemptions
      Provision fund? Yes, losses & late payments are protected by Landbay’s Rainy Day Fund and Landbay doesn't lend on commercial, bridging or development property loans
      How much can I save? From £100, no maximum
      Founded in 2013

    • Go to site

    Exclusive

    Exclusive £250 John Lewis voucher if you lend £10,000 or more for a minimum of 12 months into a Landbay account by 29/05/2015. Offer available to new customers only, T&Cs apply

    Great for
    Short term access to your money if required
    Benefit from any rise in UK interest rates, as this product tracks 3% above the Bank of England base rate
    No lender fees. The rate that you lend at is the rate you will receive
    But be aware that
    To lend you must be 18 years or older and a UK resident, with a UK bank account
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name Monthly Access

      RateSetter

      Monthly Access

    • Expected annualised rate after fees and bad debt 2.70% variable
    • More details

      You lend to… Real people (RateSetter has checked they're creditworthy)
      When do I earn interest? Only once money is lent, though if you select 'market offered rate' this is usually quick
      Can I withdraw money before term ends? Yes - but you'll be subject to pay SellOut fees
      Provision fund? Yes, £13.8 million as of May 2015
      How much can I save? From £10 to £1 million
      Founded in 2010

    • Go to site

    Great for
    Short term access to your money
    Simple P2P lending. RateSetter match your funds for you - just how a bank operates
    No lender fee applies
    But be aware that
    You can access your money (called 'sell out') at any time so long as there is another lender to take your place. The rate you earn will be reduced if you sell out before the full term and a fee may apply, refer to provider for full details
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

Peer-to-peer lending accounts - Short Term 6 Months To 3 Years - Ordered by term

    • Provider/Product name Lending

      Funding Circle

      Lending

    • Expected annualised rate after fees and bad debt 6.70% variable
    • More details

      You lend to… All types of businesses including limited companies, sole traders and partnerships in the UK (Funding Circle grades their credit rating A+ to C-)
      When do I earn interest? Typically, once your money is lent out you receive repayments every month (interest and principal)
      Can I withdraw money before term ends? Yes, you can sell some or all of your loan parts to other investors, for a 0.25% charge on each loan part. There may be some circumstances which prevent loan parts from being sold, for example loans that have had their risk bands ‘downgraded’
      Provision fund? Investors can manage their risk by lending to hundreds of different businesses. You receive all income from the borrower upfront rather than any being allocated into a provision fund for when, and if, a bad debt occurs
      Minimum Investment: From £20 with no maximum

    • Go to site

    Great for
    You can choose each and every individual business you would like to invest in
    If you would like more of a hassle-free solution, you can pre-select the businesses you want to lend to and the rate you're happy to earn and let the Autobid invest for you
    But be aware that
    1% annual fee applies on the money you have lent
    There is no provision fund within the Funding Circle platform and is operated similar to an investment - the lower the risk band, the higher rates apply - but remember these are the riskier business
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name Green Energy Income Account

      Assetz Capital

      Green Energy Income Account

    • Expected annualised rate after fees and bad debt 7.00% Per Annum Gross Return
    • More details

      You lend to… This account is designed to make an actively diversified portfolio of loans in renewable energy projects such as on-shore wind farms
      When do I earn interest? Interest (income) is paid monthly
      Can I withdraw money before term ends? The Account generally contains 3-year loans to projects (after which capital should be repaid) but investors can exit the account earlier via the Aftermarket (subject to demand at that time)
      Provision fund? Assetz Provision Funding Limited (APFL), a UK Limited Company, has been set up to provide a discretionary Provision Fund linked to identified Assetz Investment Accounts or loans
      How much can I save? From £1, no maximum
      Founded in 2013

    • Go to site

    Great for
    Investing in renewable energy projects
    Long-term government backed projects with government contractual subsidies
    Automatic inclusion in a separate provision fund to protect investors from income delays or income and/or capital losses on this investment account
    But be aware that
    To lend you must be 18 years or older and a UK resident, with a UK bank account
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name FlexiLend 1 Year Term

      QuidCycle

      FlexiLend 1 Year Term

    • Expected annualised rate after fees and bad debt 4.30% representative return
    • More details

      You lend to… Real people (QuidCycle has checked they're creditworthy)
      When do I earn interest? Once your funds are fully matched with fully funded loans. You receive monthly repayments (interest and principal)
      Can I withdraw money before term ends? Fixed term for one year
      Provision fund? Yes, maintained at 1.50% of annualised installments due across our entire loan book
      How much can I save? The initial deposit is £500, but you can top up from £100 after that
      Founded in 2013

    • Go to site

    Great for
    You choose your rate and manage your reinvestments
    Your monthly repayments can be reinvested, or withdrawn as income
    No lender fee applies
    But be aware that
    To lend you must be 21 years or older and a UK resident, with a UK bank account
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name SwiftLend 1 Year Term

      QuidCycle

      SwiftLend 1 Year Term

    • Expected annualised rate after fees and bad debt 3.90% fixed on maturity
    • More details

      You lend to… Real people (QuidCycle has checked they're creditworthy)
      When do I earn interest? You start earning interest immediately, even before your funds are matched to a borrower
      Can I withdraw money before term ends? Fixed term for one year
      Provision fund? Yes, maintained at 1.50% of annualised installments due across our entire loan book
      How much can I save? The initial deposit is £500, but you can top up from £100 after that
      Founded in 2013

    • Go to site

    Great for
    Start earning interest before your money is successfully matched
    Interest is annually compounded
    No lender fee applies
    But be aware that
    To lend you must be 21 years or older and a UK resident, with a UK bank account
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name 1 Year Term

      RateSetter

      1 Year Term

    • Expected annualised rate after fees and bad debt 4.30% fixed
    • More details

      You lend to… real people (RateSetter has checked they're creditworthy)
      When do I earn interest? Only once money is lent, though if you select 'market offered rate' this is usually quick
      Can I withdraw money before term ends? Yes - but you'll be subject to pay SellOut fees
      Provision fund? Yes, £13.8 million as of May 2015
      How much can I save? From £10 to £1m
      Founded in 2010

    • Go to site

    Great for
    Short term access to your money
    Simple P2P lending. RateSetter match your funds for you - just how a bank operates
    No lender fee applies
    But be aware that
    You can access your money (called 'sell out') at any time so long as there is another lender to take your place. The rate you earn will be reduced if you sell out before the full term and a fee may apply, refer to provider for full details
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name 18 Month Term

      Wellesley & Co

      18 Month Term

    • Expected annualised rate after fees and bad debt 4.10% fixed
      on maturity
    • More details

      You lend to… Property developers. All lending is secured against property
      When do I earn interest? Interest is earned straight away when you select a fixed term, you even earn interest before your funds are matched
      Can I withdraw money before term ends? Yes. There is no fee, however the interest rate will be re-aligned to fairly reflect how long you lent your funds for. This is available subject to liquidity
      Provision fund? Yes, £1,440,470 as of March 2015
      How much can I save? From £10, with no maximum
      Founded in 2013, platform launched in November 2013

    • Go to site

    Great for
    No lender fee applies
    Start earning interest before your money is successfully matched
    But be aware that
    Early withdrawal is not guaranteed - ensure you can fix your savings for the specified term. If you think you'll need access, look for a shorter term or even monthly access products
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name FlexiLend 3 Year Term

      QuidCycle

      FlexiLend 3 Year Term

    • Expected annualised rate after fees and bad debt 5.20% representative return
    • More details

      You lend to… Real people (QuidCycle has checked they're creditworthy)
      When do I earn interest? Once your funds are fully matched with fully funded loans. You receive monthly repayments (interest and principal)
      Can I withdraw money before term ends? Yes - but after the first year. A small fee applies.
      Provision fund? Yes, maintained at 1.50% of annualised installments due across our entire loan book
      How much can I save? The initial deposit is £500, but you can top up from £100 after that
      Founded in 2013

    • Go to site

    Great for
    You choose your rate and manage your reinvestments
    Your monthly repayments can be reinvested, or withdrawn as income
    No lender fee applies
    But be aware that
    To lend you must be 21 years or older and a UK resident, with a UK bank account
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name SwiftLend 3 Year Term

      QuidCycle

      SwiftLend 3 Year Term

    • Expected annualised rate after fees and bad debt 4.80% fixed on maturity
    • More details

      You lend to… Real people (QuidCycle has checked they're creditworthy)
      When do I earn interest? You start earning interest immediately, even before your funds are matched to a borrower
      Can I withdraw money before term ends? Yes - but after the first year. A small fee applies.
      Provision fund? Yes, maintained at 1.50% of annualised installments due across our entire loan book
      How much can I save? The initial deposit is £500, but you can top up from £100 after that
      Founded in 2013

    • Go to site

    Great for
    Start earning interest before your money is successfully matched
    Interest is annually compounded
    No lender fee applies
    But be aware that
    To lend you must be 21 years or older and a UK resident, with a UK bank account
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name Fixed Rate 3 Year Fixed Term

      Landbay

      Fixed Rate 3 Year Fixed Term

    • Expected annualised rate after fees and bad debt 4.40% annualised
    • More details

      You lend to… Landbay only facilitates secured lending against residential buy-to-let mortgages on tenanted properties in England and Wales
      When do I earn interest? Interest accrues immediately from the moment your funds are received
      Can I withdraw money before term ends? Yes, redeeming your Fixed Rate loan parts may be possible prior to completion of the 3-year fixed term, subject to Landbay being able to reallocate your loan parts to new lenders. Fixed Rate loan parts will be redeemed at the current market rate, which may be higher or lower depending on how rates move in the future
      Provision fund? Yes, losses & late payments are protected by Landbay’s Rainy Day Fund and Landbay doesn't lend on commercial, bridging or development property loans
      How much can I save? From £100, no maximum
      Founded in 2013

    • Go to site

    Exclusive

    Exclusive £250 John Lewis voucher if you lend £10,000 or more for a minimum of 12 months into a Landbay account by 29/05/2015. Offer available to new customers only, T&Cs apply

    Great for
    A fixed rate of interest
    Interest accrues immediately from the moment your funds are received
    No lender fees. The rate that you lend at is the rate you will receive
    But be aware that
    To lend you must be 18 years or older and a UK resident, with a UK bank account
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name 3 Year Income

      RateSetter

      3 Year Income

    • Expected annualised rate after fees and bad debt 5.70% fixed
    • More details

      You lend to… Real people (RateSetter has checked they're creditworthy)
      When do I earn interest? Only once money is lent, though if you select 'market offered rate' this is usually quick
      Can I withdraw money before term ends? Yes - but you'll be subject to pay SellOut fees
      Provision fund? Yes, £13.8 million as of May 2015
      How much can I save? From £10 to £1 million
      Founded in 2010

    • Go to site

    Great for
    Short term access to your money
    Simple P2P lending. RateSetter match your funds for you - just how a bank operates
    No lender fee applies
    But be aware that
    You can access your money (called 'sell out') at any time so long as there is another lender to take your place. The rate you earn will be reduced if you sell out before the full term and a fee may apply, refer to provider for full details
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name 1 To 3 Year Term

      Lending Works

      1 To 3 Year Term

    • Expected annualised rate after fees and bad debt 5.10% AER
    • More details

      You lend to… Real people (Lending Works has checked they're creditworthy)
      When do I earn interest? Only once money is lent. On average this takes 7 days
      Can I withdraw money before term ends? Yes, for a 0.6% (min £20) fee and there needs to be a new lender willing to take your loans before you can access your money
      Provision fund? Yes and on top of that Lending Works is unique as it has insurance against borrower default
      How much can I save? From £10, no maximum
      Founded in 2012 (platform launched 2014)

    • Go to site

    Great for
    Easily re-invest your earnings through the online Auto Lend tool and get instant access to your money using the Quick Withdraw tool
    No lender fees apply
    Threefold protection which includes the Lending Works Shield. The Shield has insurance against borrower defaults, cybercrime and fraud. No other peer-to-peer lender offers this
    But be aware that
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name 3 Year Term

      Wellesley & Co

      3 Year Term

    • Expected annualised rate after fees and bad debt 5.10% fixed
      on maturity
    • More details

      You lend to… Property developers. All lending is secured against property
      When do I earn interest? Interest is earned straight away when you select a fixed term, you even earn interest before your funds are matched
      Can I withdraw money before term ends? Yes. There is no fee, however the interest rate will be re-aligned to fairly reflect how long you lent your funds for. This is available subject to liquidity
      Provision fund? Yes, £1,440,470 as of March 2015
      How much can I save? From £10, with no maximum
      Founded in 2013, platform launched in November 2013

    • Go to site

    Great for
    No lender fee applies
    Start earning interest before your money is successfully matched
    But be aware that
    Early withdrawal is not guaranteed - ensure you can fix your savings for the specified term. If you think you'll need access, look for a shorter term or even monthly access products
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name Up to 3 Years

      Zopa

      Up to 3 Years

    • Expected annualised rate after fees and bad debt 4.0% projected return
    • More details

      You lend to… Real people, including sole traders (Zopa grades their credit rating A* to C)
      When do I earn interest? Only once money is lent to a borrower
      Can I withdraw money before term ends? Yes - but a 1% fee applies
      Provision fund? Yes referred to as the Safeguard fund, contains over £5 million
      How much can I save? From £10, with no maximum
      Founded in 2005 - it's the oldest P2P platform

    • Go to site

    Great for
    For emergency access, you can use Zopa's Rapid Return tool - a 1% fee applies to use this service
    But be aware that
    You must be 18 years or older to lend your money with Zopa
    Your savings are not protected by the FSCS compensation scheme

Peer-to-peer lending accounts - Long Term 4 Years And Over - Ordered by term

    • Provider/Product name Lending

      Funding Circle

      Lending

    • Expected annualised rate after fees and bad debt 6.70% variable
    • More details

      You lend to… All types of businesses including limited companies, sole traders and partnerships in the UK (Funding Circle grades their credit rating A+ to C-)
      When do I earn interest? Typically, once your money is lent out you receive repayments every month (interest and principal)
      Can I withdraw money before term ends? Yes, you can sell some or all of your loan parts to other investors, for a 0.25% charge on each loan part. There may be some circumstances which prevent loan parts from being sold, for example loans that have had their risk bands ‘downgraded’
      Provision fund? Investors can manage their risk by lending to hundreds of different businesses. You receive all income from the borrower upfront rather than any being allocated into a provision fund for when, and if, a bad debt occurs
      Minimum Investment: From £20 with no maximum

    • Go to site

    Great for
    You can choose each and every individual business you would like to invest in
    If you would like more of a hassle-free solution, you can pre-select the businesses you want to lend to and the rate you're happy to earn and let the Autobid invest for you
    But be aware that
    1% annual fee applies on the money you have lent
    There is no provision fund within the Funding Circle platform and is operated similar to an investment - the lower the risk band, the higher rates apply - but remember these are the riskier business
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name 4 To 5 Year Term

      Lending Works

      4 To 5 Year Term

    • Expected annualised rate after fees and bad debt 6.20% AER
    • More details

      You lend to… Real people (Lending Works has checked they're creditworthy)
      When do I earn interest? Only once money is lent. On average this takes 7 days
      Can I withdraw money before term ends? Yes, for a 0.6% (min £20) fee and there needs to be a new lender willing to take your loans before you can access your money
      Provision fund? Yes and on top of that Lending Works is unique as it has insurance against borrower default
      How much can I save? From £10, no maximum
      Founded in 2012 (platform launched 2014)

    • Go to site

    Great for
    Easily re-invest your earnings through the online Auto Lend tool and get instant access to your money using the Quick Withdraw tool
    No lender fees apply
    Threefold protection which includes the Lending Works Shield. The Shield has insurance against borrower defaults, cybercrime and fraud. No other peer-to-peer lender offers this
    But be aware that
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name FlexiLend 5 Year Term

      QuidCycle

      FlexiLend 5 Year Term

    • Expected annualised rate after fees and bad debt 6.10% representative return
    • More details

      You lend to… Real people (QuidCycle has checked they're creditworthy)
      When do I earn interest? Once your funds are fully matched with fully funded loans. You receive monthly repayments (interest and principal)
      Can I withdraw money before term ends? Yes - but after the first year. A small fee applies.
      Provision fund? Yes, maintained at 1.50% of annualised installments due across our entire loan book
      How much can I save? The initial deposit is £500, but you can top up from £100 after that
      Founded in 2013

    • Go to site

    Great for
    You choose your rate and manage your reinvestments
    Your monthly repayments can be reinvested, or withdrawn as income
    No lender fee applies
    But be aware that
    To lend you must be 21 years or older and a UK resident, with a UK bank account
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name 5 Year Term

      Wellesley & Co

      5 Year Term

    • Expected annualised rate after fees and bad debt 6.32% fixed
      on maturity
    • More details

      You lend to… Property developers. All lending is secured against property
      When do I earn interest? Interest is earned straight away when you select a fixed term, you even earn interest before your funds are matched
      Can I withdraw money before term ends? Yes. There is no fee, however the interest rate will be re-aligned to fairly reflect how long you lent your funds for. This is available subject to liquidity
      Provision fund? Yes, £1,440,470 as of March 2015
      How much can I save? From £10, with no maximum
      Founded in 2013, platform launched in November 2013

    • Go to site

    Great for
    No lender fee applies
    Start earning interest before your money is successfully matched
    But be aware that
    Early withdrawal is not guaranteed - ensure you can fix your savings for the specified term. If you think you'll need access, look for a shorter term or even monthly access products
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages. Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name 5 Year Income

      RateSetter

      5 Year Income

    • Expected annualised rate after fees and bad debt 6.10% fixed
    • More details

      You lend to… Real people (RateSetter has checked they're creditworthy)
      When do I earn interest? Only once money is lent, though if you select 'market offered rate' this is usually quick
      Can I withdraw money before term ends? Yes - but you'll be subject to pay SellOut fees
      Provision fund? Yes, £13.8 million as of May 2015
      How much can I save? From £10 to £1 million
      Founded in 2010

    • Go to site

    Great for
    Short term access to your money
    Simple P2P lending. RateSetter match your funds for you - just how a bank operates
    No lender fee applies
    But be aware that
    You can access your money (called 'sell out') at any time so long as there is another lender to take your place. The rate you earn will be reduced if you sell out before the full term and a fee may apply, refer to provider for full details
    Your savings are not protected by the FSCS compensation scheme

    Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name SwiftLend 5 Year Term

      QuidCycle

      SwiftLend 5 Year Term

    • Expected annualised rate after fees and bad debt 5.70% fixed on maturity
    • More details

      You lend to… Real people (QuidCycle has checked they're creditworthy)
      When do I earn interest? You start earning interest immediately, even before your funds are matched to a borrower
      Can I withdraw money before term ends? Yes - but after the first year. A small fee applies.
      Provision fund? Yes, maintained at 1.50% of annualised installments due across our entire loan book
      How much can I save? The initial deposit is £500, but you can top up from £100 after that
      Founded in 2013

    • Go to site

    Great for
    Start earning interest before your money is successfully matched
    Interest is annually compounded
    No lender fee applies
    But be aware that
    To lend you must be 21 years or older and a UK resident, with a UK bank account
    Your savings are not protected by the FSCS compensation scheme

     Peer-to-peer lending can offer potentially attractive returns. There is a risk you may lose some or all of your initial investment as it is not protected by the Financial Services Compensation Scheme, although many lenders do offer their own compensation packages.  Please first read our peer-to-peer guide below to see if this product is right for you.

    • Provider/Product name Up to 5 Years

      Zopa

      Up to 5 Years

    • Expected annualised rate after fees and bad debt 5.0% projected return
    • More details

      You lend to… Real people, including sole traders (Zopa grades their credit rating A* to C)
      When do I earn interest? Only once money is lent to a borrower
      Can I withdraw money before term ends? Yes - but a 1% fee applies
      Provision fund? Yes referred to as the Safeguard fund, contains over £5 million
      How much can I save? From £10, with no maximum
      Founded in 2005 - it's the oldest P2P platform

    • Go to site

    Great for
    For emergency access, you can use Zopa's Rapid Return tool - a 1% fee applies to use this service
    But be aware that
    You must be 18 years or older to lend your money with Zopa
    Your savings are not protected by the FSCS compensation scheme

What is peer-to-peer lending?

Important information about peer-to-peer lending

Investing your savings in a peer-to-peer lending scheme can potentially be a good way to get better returns than more conventional forms of saving. However, it should only be considered as part of a balanced investment portfolio and is not for everyone. Peer-to-peer savings are not regulated by the Financial Conduct Authority and your capital will not be protected by the Financial Services Compensation Scheme should things go wrong. It’s important you understand both the advantages and disadvantages before making a decision on whether to invest, so please read this guide to help you make a more informed decision.

As the name suggests, peer-to-peer lending involves people using their savings to lend to other individuals, therefore cutting out the need for banks to be involved. The aim is that those who are willing to lend could get higher returns on their savings than they would if they put their money in a conventional savings account, and in turn the individuals they are lending to could get lower cost loans than they would if they borrowed through a bank.

Some peer-to-peer sites lend to small businesses too, which for many has proved invaluable in light of current tight bank lending restrictions.

As a lender, you can choose your rate of return based on the length of time you want to invest your money for and the level of risk you’re prepared to take. For example, if you only want to lend to those with the best credit scores you will earn less than if you are prepared to lend to a higher risk group.

There are charges and fees although these are usually already factored in to the rate you see advertised – this is worth checking though.

Anyone aged 18 or above who is a UK resident, has a UK current account and is not lending in the course of a business can usually become a peer to peer lender.

You don’t need to lend large sums to invest either, most peer-to-peer investments start from as little as £10 or £20.

What are the advantages of using peer-to-peer lending?

In today’s low interest rate environment, peer-to-peer saving is proving increasingly popular, returns can be considerably higher than those offered on most savings accounts, and are fixed for the period of the loan, which can usually be over either three or five years. In order to minimise the risks any money you lend can usually be split over multiple credit-checked borrowers in small chunks. Therefore if one person fails to keep up with their repayments, it doesn’t mean you would lose all your money.

Some peer-to-peer lending companies run their own schemes that guarantee to return every penny to investors through a Provision Fund which borrowers contribute to by way of a credit rate fee charged at between 0.5% and 3% of the loan.

For additional protection, most peer-to-peer schemes hold Consumer Credit Licences from the Office of Fair Trading and use the same processes and fraud prevention systems as banks, but always ask what protection is in place before becoming a lender.

What are the disadvantages of peer-to-peer lending?

Saving with peer-to-peer lending should only be considered as part of a balanced investment portfolio.

Peer-to-peer saving is not regulated by the Financial Conduct Authority and your money will not be covered by the Financial Services Compensation Scheme as with most standard investment schemes if the lending company goes bust.

Investing your savings within a peer-to-peer lending scheme is not for everyone. Interest rates vary significantly with higher returns gained through lending to higher risk borrowers. This in turn raises the risk that you may not get some or all of your money back.

If you need to withdraw your funds early, some schemes will charge a fee for doing this and some schemes don’t allow withdrawal of your capital early at all. It is sometimes possible to sell the loan on in order to get your money out early, but there is usually a fee for doing this and could take time, meaning you can’t access your cash in the interim.

If the person you have lent the money to within the scheme defaults on their loan repayments, there is a risk you could lose all or some of your money. Also, if the borrower chooses to repay their loan early, which many people do, it will have a knock on effect on your rate of return.

Compare options for investing in peer-to-peer lending

The number of peer-to-peer lending schemes available has increased dramatically in recent years, so comparing them and finding the right one to suit your needs isn’t always easy. However, you can use MoneySuperMarket to compare peer to peer investment options without having to trawl around all the different sites yourself.

 

 

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