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 Access Account

      Assetz Capital

      30 Day Access Account

    • Expected annualised rate after fees and bad debt 4.25% Per Annum Gross Return
    • More details

      You lend to:This account is designed to make an actively diversified portfolio of loans in British businesses with realisable security
      When do I earn interest?: Interest (income) is paid monthly
      Can I withdraw money before term ends?: The account charges no fees for withdrawals and access to funds after 30 days’ notice, in normal market conditions
      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

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    Great for
    Investing in British businesses
    Attractive interest rate of 4.25% pa
    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 Tracker Rate

      Landbay

      Tracker Rate

    • Expected annualised rate after fees and bad debt 3.99% annualised (LIBOR + 3.35% pa)
    • 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 Reserve Fund and Landbay doesn't lend on commercial, bridging or development property loans. This is a discretionary fund derived solely from Landbay's fees and margin.
      How much can I save? From £100, no maximum
      Founded in 2013

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    Great for
    Short term access to your money if required
    This product tracks 3.35% per annum above LIBOR (London Interbank Offered 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 Quick Access Account

      Assetz Capital

      Quick Access Account

    • Expected annualised rate after fees and bad debt Currently 3.75% Per Annum Gross Return
    • More details

      You lend to… The Quick Access Account (QAA) invests in secured loans, made to a wide range of quality UK SME businesses that pass Assetz Capital's credit policy
      When do I earn interest? Interest is paid monthly
      Can I withdraw money before term ends? The Account has been designed to provide very quick access to your cash in normal market conditions. Assetz Capital does not impose any minimum term on your investment and makes no charge if you withdraw your cash. Assetz publishes the recent account access speed and has to date been under 1 second. A substantial cash balance is retained at all times to aid liquidity
      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 including the QAA. Please see their Provision Fund page for full information
      How much can I save? From £1 to £100,000 direct investment. Additionally, idle funds in other accounts may also be invested up to a cap of £25,000 per person
      Founded in 2013

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    Great for
    Investors looking for a fair interest rate on peer to peer loans whilst having fast access to their funds in normal market conditions
    Unprecedented liquidity and ease of access, with no fees or reduction in interest rate for requesting access
    Automatic inclusion in a separate, discretionary provision fund to protect investors from interest delays and loss of interest and/or capital with this account
    But be aware that
    To lend, you must be 18 years or older, a UK resident with a UK bank account
    Your investment is not covered by the FSCS compensation scheme
    Quick access to your funds is principally enabled by maintaining high liquidity in this investment account. Assetz Capital publish full details and their 7 day average access time on their website

    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 Access

      Zopa

      Access

    • Expected annualised rate after fees and bad debt 3.3% projected return
    • More details

      You lend to… Real people based in the UK taking loans of up to 5 years who are in the Zopa risk markets A* to C. Your money is automatically split into small chunks and lent directly to a number of sensible borrowers.
      When do I earn interest? Once money is lent to a borrower you will receive monthly repayments of your capital plus interest
      Can I withdraw money before term ends? You can withdraw your money for free as borrowers repay. If you choose to sell your loans to withdraw all, or a lump sum, there needs to be other lenders to buy your loans. With Zopa Access there is no fee to sell your loans.
      Provision fund? Yes, Zopa has a Safeguard fund which is designed to cover expected losses. Their loss expectations are based on their historical loan performance, and assume a similar economic environment. It is not a guarantee.
      How much can I save? From £10, with no maximum
      Founded in 2005 - it’s the longest running P2P platform

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    Great for
    Great if you’re new to Zopa, or if you want to dip into your money occasionally
    Track record – Only peer to peer lender with 10 years strong performance track record, including through the financial crisis
    Trusted by more lenders than any other P2P company. Zopa has over 50,000 active lenders
    But be aware that
    You can sell your loans, as long as there other lenders in the market
    With peer to peer lending your capital is at risk and your money is not protected by the FSCS compensation scheme
    You must be 18 years or over to lend your money with Zopa

    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 Rolling market

      RateSetter

      Rolling market

    • Expected annualised rate after fees and bad debt 3.20% 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
      Provision fund? Yes, £16.3 million as of November 2015
      How much can I save? From £10 to no maximum (although RateSetter may limit the amount an individual can invest in any single market)
      Founded in 2010

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    £100 Bonus

    Invest £1,000+ for 1 year and get a £100 bonus. Ts & Cs apply.

    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
    Your savings are not protected by the FSCS compensation scheme
    To invest with RateSetter you must be aged 18 or over and have a UK bank account

    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 7.20% 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 E)
      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 higher 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 usually earned 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 Plus

      Zopa

      Plus

    • Expected annualised rate after fees and bad debt 6.5% projected return
    • More details

      You lend to… Real people based in the UK taking loans of up to 5 years who are in the Zopa risk markets A* to E. Your money is automatically split into small chunks and lent directly to a number of sensible borrowers.
      When do I earn interest? Once money is lent to a borrower you will receive monthly repayments of your capital plus interest
      Can I withdraw money before term ends? You can withdraw your money for free as borrowers repay. If you choose to sell your loans to withdraw all, or a lump sum, there needs to be other lenders to buy your loans. With Zopa Plus there is a 1% fee to sell your loans.
      Provision fund? No, with Zopa Plus your money is not covered by the Safeguard fund. Whilst expected returns are higher so is the anticipated credit risk.
      How much can I save? From £1,000 to ensure your money is diversified across at least 100 borrowers, with no maximum
      Founded in 2005 - it’s the longest running P2P platform

    • Go to site

    Great for
    Great if you’re happy lending at Zopa and want a higher return for more risk
    Track record – Only peer to peer lender with 10 years strong performance track record, including through the financial crisis
    Trusted by more lenders than any other P2P company. Zopa has over 50,000 active lenders
    But be aware that
    You can sell your loans to other lenders to access your money however a 1% fee applies to use this service
    With peer to peer lending your capital is at risk and your money is not protected by the FSCS compensation scheme
    You must be 18 years or over to lend your money with Zopa

    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 Regular Investment

      QuidCycle

      Regular Investment

    • Expected annualised rate after fees and bad debt 5.2% 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 successfully 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 QuidCycle's entire loan book
      How much can I save? The minimum initial and regular deposits are £100
      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 invest 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 Classic

      Zopa

      Classic

    • Expected annualised rate after fees and bad debt 4.1% projected return
    • More details

      You lend to… Real people based in the UK taking loans of up to 5 years who are in the Zopa risk markets A* to C. Your money is automatically split into small chunks and lent directly to a number of sensible borrowers.
      When do I earn interest? Once money is lent to a borrower you will receive monthly repayments of your capital plus interest
      Can I withdraw money before term ends? You can withdraw your money for free as borrowers repay. If you choose to sell your loans to withdraw all, or a lump sum, there needs to be other lenders to buy your loans. With Zopa Classic there is a 1% fee to sell your loans.
      Provision fund? Yes, Zopa has a Safeguard fund which is designed to cover expected losses. Their loss expectations are based on their historical loan performance, and assume a similar economic environment. It is not a guarantee.
      How much can I save? From £10, with no maximum
      Founded in 2005 - it’s the longest running P2P platform

    • Go to site

    Great for
    Great if you want to put your money away and leave it to grow
    Track record – Only peer to peer lender with 10 years strong performance track record, including through the financial crisis
    Trusted by more lenders than any other P2P company. Zopa has over 50,000 active lenders
    But be aware that
    You can sell your loans to other lenders to access your money however a 1% fee applies to use this service
    With peer to peer lending your capital is at risk and your money is not protected by the FSCS compensation scheme
    You must be 18 years or over to lend your money with Zopa

    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 market

      RateSetter

      1 Year market

    • Expected annualised rate after fees and bad debt 3.40% 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, £16.3 million as of November 2015
      How much can I save? From £10 to no maximum (although RateSetter may limit the amount an individual can invest in any single market)
      Founded in 2010

    • Go to site

    £100 Bonus

    Invest £1,000+ for 1 year and get a £100 bonus. Ts & Cs apply.

    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
    To invest with RateSetter you must be aged 18 or over and have a UK bank account

    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

      Wellesley & Co

      1 Year Term

    • Expected annualised rate after fees and bad debt 2.25% fixed
    • 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, £4,168,663 as of June 2016
      How much can I save? From £10, with no maximum
      Founded in 2013, platform launched in November 2013

    • Go to site

    2016 SUPERS

    Winner of the Best ‘Alternative’ Savings Account Provider

    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 2 Year Term

      Wellesley & Co

      2 Year Term

    • Expected annualised rate after fees and bad debt 2.35% fixed
    • 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, £4,168,663 as of June 2016
      How much can I save? From £10, with no maximum
      Founded in 2013, platform launched in November 2013

    • Go to site

    2016 SUPERS

    Winner of the Best 'Alternative' Savings Account Provider

    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 1 To 3 Year Term

      Lending Works

      1 To 3 Year Term

    • Expected annualised rate after fees and bad debt 4.20% 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
    To invest you must be aged 18 or over and a UK resident, with a UK bank account

    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 - Long Term 4 Years And Over - Ordered by term

    • Provider/Product name Lending

      Funding Circle

      Lending

    • Expected annualised rate after fees and bad debt 7.20% 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 E)
      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 higher 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 Great British Business Account

      Assetz Capital

      Great British Business 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 Small and Medium Sized Enterprises (SMEs)
      When do I earn interest? Interest (income) is earned monthly
      Can I withdraw money before term ends? The Account may contain short term loans of less than one month through to 5-year term loans to businesses 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 the future of Britain's small businesses
    Flexible investment, with the ability to add or reduce investment on an ongoing basis
    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 invest you must be aged 18 or over and a UK resident, with a UK bank account
    Your savings are not covered 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 Plus

      Zopa

      Plus

    • Expected annualised rate after fees and bad debt 6.5% projected return
    • More details

      You lend to… Real people based in the UK taking loans of up to 5 years who are in the Zopa risk markets A* to E. Your money is automatically split into small chunks and lent directly to a number of sensible borrowers.
      When do I earn interest? Once money is lent to a borrower you will receive monthly repayments of your capital plus interest
      Can I withdraw money before term ends? You can withdraw your money for free as borrowers repay. If you choose to sell your loans to withdraw all, or a lump sum, there needs to be other lenders to buy your loans. With Zopa Plus there is a 1% fee to sell your loans.
      Provision fund? No, with Zopa Plus your money is not covered by the Safeguard fund. Whilst expected returns are higher so is the anticipated credit risk.
      How much can I save? From £1,000 to ensure your money is diversified across at least 100 borrowers, with no maximum
      Founded in 2005 - it’s the longest running P2P platform

    • Go to site

    Great for
    Great if you’re happy lending at Zopa and want a higher return for more risk
    Track record – Only peer to peer lender with 10 years strong performance track record, including through the financial crisis
    Trusted by more lenders than any other P2P company. Zopa has over 50,000 active lenders
    But be aware that
    You can sell your loans to other lenders to access your money however a 1% fee applies to use this service
    With peer to peer lending your capital is at risk and your money is not protected by the FSCS compensation scheme
    You must be 18 years or over to lend your money with Zopa

    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 5.20% 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
    To invest you must be aged 18 or over and a UK resident, with a UK bank account

    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 Lump Sum Investment

      QuidCycle

      Lump Sum Investment

    • Expected annualised rate after fees and bad debt Up to 6.1% 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 successfully 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 QuidCycle's entire loan book
      How much can I save? The minimum deposit is £500
      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 invest 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 market

      RateSetter

      5 Year market

    • Expected annualised rate after fees and bad debt 5.30% 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, £16.3 million as of November 2015
      How much can I save? From £10 to no maximum (although RateSetter may limit the amount an individual can invest in any single market)
      Founded in 2010

    • Go to site

    £100 Bonus

    Invest £1,000+ for 1 year and get a £100 bonus. Ts & Cs apply.

    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
    To invest with RateSetter you must be aged 18 or over and have a UK bank account

    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 Classic

      Zopa

      Classic

    • Expected annualised rate after fees and bad debt 4.1% projected return
    • More details

      You lend to… Real people based in the UK taking loans of up to 5 years who are in the Zopa risk markets A* to C. Your money is automatically split into small chunks and lent directly to a number of sensible borrowers.
      When do I earn interest? Once money is lent to a borrower you will receive monthly repayments of your capital plus interest
      Can I withdraw money before term ends? You can withdraw your money for free as borrowers repay. If you choose to sell your loans to withdraw all, or a lump sum, there needs to be other lenders to buy your loans. With Zopa Classic there is a 1% fee to sell your loans.
      Provision fund? Yes, Zopa has a Safeguard fund which is designed to cover expected losses. Their loss expectations are based on their historical loan performance, and assume a similar economic environment. It is not a guarantee.
      How much can I save? From £10, with no maximum
      Founded in 2005 - it’s the longest running P2P platform

    • Go to site

    Great for
    Great if you want to put your money away and leave it to grow
    Track record – Only peer to peer lender with 10 years strong performance track record, including through the financial crisis
    Trusted by more lenders than any other P2P company. Zopa has over 50,000 active lenders
    But be aware that
    You can sell your loans to other lenders to access your money however a 1% fee applies to use this service
    With peer to peer lending your capital is at risk and your money is not protected by the FSCS compensation scheme
    You must be 18 years or over to lend your money with Zopa

    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.

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 result in 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 regulated by the Financial Conduct Authority but 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. 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 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.

Since April 2016, it has been possible to hold peer-to-peer loans within an Individual Savings Account (ISA), so that returns are tax-free. This type of ISA is known as an innovative finance ISA. This tax year (2016/ 2017), you can invest up to £15,240 in ISAs, either in stocks and shares, cash, or peer-to-peer loans, or you can invest in a combination of these.

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 regulated by the Financial Conduct Authority but 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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