Jasmine Birtles
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6 Best Peer-to-Peer Lending Platforms For UK Investors
Ruby Layram
10th Apr 2025
Peer-to-peer lending (P2P) has dramatically reshaped the way individuals and small businesses access capital. Rather than jumping through hoops at traditional banks, borrowers can now connect directly with investors through online platforms- often snagging better terms in the process.
And for investors? It’s a fresh way to potentially earn solid returns while helping real people reach their financial goals. As the market matures, a wide variety of P2P platforms have sprung up, each offering unique perks depending on what you’re looking for.
Below, we dive into some of the top contenders, giving you the lowdown to help you pick the best fit for your investment style or borrowing needs.
1. Lending Club
Founded in 2007, LendingClub has become one of the largest P2P platforms globally, facilitating over $60 billion in loans.
In the UK, its focus is largely on personal and small business loans. LendingClub offers loans ranging from £1,000 to £40,000, with APRs starting at 7.90% and extending up to 35.99%. The terms generally range between three and five years.
What sets LendingClub apart is its secondary market, which allows investors to buy and sell loan notes, providing more liquidity in a traditionally illiquid market.
While LendingClub has a solid reputation, its origination fees, which range between 3% and 6%, can be somewhat high compared to other platforms. However, the platform’s long track record and flexibility make it an attractive option for UK investors.
2. Loanpad
Loanpad is a UK-based P2P lending platform that focuses on property-backed loans. It partners with experienced third-party lenders to offer investors opportunities in short-to-medium-term loans with a strong emphasis on security and liquidity.
Investments start from as little as £10, making it accessible for both new and seasoned investors.
Loanpad offers competitive rates, with the Classic Account providing up to 5.5% and the Premier 60-Day Access Account offering up to 6.5% gross annual interest.
Investments are tied to property development loans with terms ranging from a few months to several years, depending on the specific loan agreement.
The platform automatically diversifies your funds across all active loans, reducing individual investment risk. Additionally, the platform pays interest daily, providing regular income for investors.
While this platform has a solid reputation, its worth noting that all investments are secured against property developments, which means your portfolio’s performance is closely tied to the property market’s dynamics. Loanpad is also relatively new compared to some P2P platforms, which may be a consideration for investors seeking long-term operational history.
3. Kuflink
Kuflink is a UK-based peer-to-peer lending platform that connects investors with borrowers seeking property-secured loans.
Since it launched in 2016, Kuflink has handled over £135 million in loans across more than 650,000 investments, serving a community of over 10,000 investors.
That’s pretty promising numbers!
Kuflink offers two primary investment options:
- Auto-Invest Account: This option allows investors to automatically allocate funds across available loans with terms of 12, 36, or 60 months. Returns for the 12-month term have been reported around 5%, with interest paid annually.
- Select-Invest Account: Investors can manually select individual loans to invest in, with terms ranging from 3 to 18 months. This option offers the potential for higher returns, with some investors achieving average annual returns between 6% and 7.2%.
An attractive feature of Kuflink’s Select-Invest Account is the “skin-in-the-game” approach, where Kuflink invests 5% of its own capital into each loan on a first-loss basis.
Investors that use the platform have reported returns of up to 7% which is pretty good-going in todays climate!
However, interest on Auto-Invest accounts is paid annually, which may not suit investors seeking more frequent income.
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4. Ratesetter
Ratesetter is one of the UK’s most well-known P2P lending platforms, offering personal loans, business loans, and investment opportunities.
Established in 2010, it has facilitated over £3 billion in loans and is regulated by the UK’s Financial Conduct Authority (FCA), providing an added layer of security for investors.
Loans on Ratesetter range from £1,000 to £35,000, with APRs ranging from 3.0% to 29.9%. Loan terms typically run from one to five years.
The platform offers a Provision Fund to protect investors from borrower defaults, making it more appealing to those looking for a relatively low-risk investment option.
However, investors should note that Ratesetter charges a fee for accessing this provision fund, and rates on loans for borrowers with less-than-perfect credit can be higher.
5. Upstart
Upstart is an interesting P2P platform that uses artificial intelligence to assess a borrower’s creditworthiness.
This AI-driven approach goes beyond the traditional credit score, factoring in education, job history, and other non-traditional criteria.
This makes Upstart an attractive option for borrowers in the UK who may not have a long credit history or have difficulty getting loans from traditional banks.
Upstart offers loans ranging from £1,000 to £50,000, with APRs between 6.70% and 35.99%. Loan terms typically run from 36 to 60 months.
One of the biggest advantages for UK investors is the platform’s fast funding process. funds can often be released within one business day. Additionally, there are no prepayment penalties.
However, Upstart’s origination fees range from 0% to 8%, and the platform’s availability in certain regions is limited.
For UK investors, it’s essential to ensure the platform is accessible in their area before committing.
6. Solo Funds
SoLo Funds follows a community-based model, which allows people to lend small amounts to each other for short-term financial needs.
The platform is all about empowering individuals to access loans up to £500 quickly, with a focus on small-dollar, short-term lending.
The unique feature of SoLo Funds is that it doesn’t require interest or mandatory fees.
Instead, borrowers can choose to leave a voluntary tip as a form of gratitude for the lender (not so good if the borrower doesn’t tip!)
The loan terms are typically short, with durations up to 30 days.
For investors, this offers an opportunity to earn returns via voluntary tips, but it also means that returns can be unpredictable. Because of its short loan durations and community-based approach, SoLo Funds might not appeal to all investors, especially those looking for long-term, high-value investments.
Read next: My Checklist for Chosing a Trading Platform
How to Choose a P2P Lending Platform
Not all P2P platforms are created equal, and the last thing you want is your cash tied up in a dodgy loan to a bloke with a dream and no repayment plan.
Here’s what every UK investor should consider before diving in…
Is It FCA-Regulated?
First things first, make sure the platform is authorised and regulated by the Financial Conduct Authority. This isn’t just a fancy badge; it means the company must follow strict rules about transparency, fair treatment, and safeguarding client money.
Look it up on the FCA register if you’re unsure. If it’s not there, run- don’t walk- in the opposite direction.
It’s worth pointing out here that peer-to-peer companies are not covered by the FSCS in the UK. So, don’t be concerned if a platform doesn’t offer this protection.
Who’s Borrowing, and Why?
P2P platforms vary in what kind of loans they offer. Some lend to businesses, some to property developers, and others to individuals.
Ask yourself:
- Do you understand the borrower profile?
- Does it align with your risk tolerance?
If you’re risk-averse, lending to established businesses or property-backed loans might feel safer than consumer loans to Dave from Doncaster.
What’s the Risk? And, What’s Backing It Up?
Some loans are secured (backed by assets like property), while others are unsecured (backed by… good vibes?).
Secured loans generally carry lower risk- if things go south, there’s something to sell to recover funds.
Also check:
- Loan-to-Value (LTV) ratios: lower LTVs often mean lower risk.
- Default and recovery stats: A solid platform will be upfront about past loan performance.
What Are the Returns (and Are They Realistic)?
If a platform promises 12% returns “guaranteed” – be sceptical. Most reputable UK platforms offer between 4% and 8% annually, depending on risk levels.
With that being said, you should my shy away from platforms that offer high returns completely (I personally use a p2p platform that offers a 12% return and it’s been great so far!). You just need to do your homework first.
Pro tip: Look for platforms that show both gross returns and net returns after defaults and fees. That gives you a more realistic picture.
Is There an Exit Strategy?
Life happens. You might need your money back earlier than expected.
- Does the platform offer a secondary market?
- Are there exit fees?
- How liquid is your investment?
Some platforms allow you to sell your loan parts to other investors. Others tie up your funds until the loan term ends. If flexibility matters to you, choose wisely.
What’s the Minimum Investment?
If you’re just dipping your toes in, you don’t want to commit thousands.
Many platforms have low minimums (as little as £10), which is great for spreading your investments across different loans- aka diversification.
Do They Have ‘Skin in the Game’?
Platforms like Kuflink invest their own money into each loan. It’s called having “skin in the game”- and it means they suffer if a loan goes bad too.
It’s a reassuring sign that they’ve done their homework before listing loans.
What’s the Platform’s Track Record?
Check how long the platform’s been around and what investors are saying online.
A shiny website is nice, but five years of consistent returns and clear communication is better.
Red flags to avoid:
- Vague or overly slick marketing promises
- Hidden fees buried in the small print
- Poor reviews or sketchy customer service
Just like with stocks and shares, diversification is key. Spread your money across multiple loans- or even better, across several P2P platforms- to reduce your risk and sleep better at night.
Choose a P2P platform the way you’d choose a long-term partner: reliable, transparent, consistent. And preferably with a healthy balance sheet!
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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