Best Peer to Peer Lending UK

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Best UK Peer to Peer Lending Platforms for Investors

The UK is renowned for its robust economic muscle. However, this has not been the case all through. A barrage of disappointing financial reports proved one of the most recent UK Recession in 2008-2009. This economic recession in the UK affected many areas including banking and investment firms.

One of the investment precincts that has grown in the UK recession is the Peer to Peer Investing UK. Due to its versatility and best rates for peer to peer lending, the peer to peer lending business has surprisingly improved and proved to be a viable investment.

What is peer to peer investing?

Peer to peer lending is the practice in which an investor, willing to give an investment loan, is matched up with a borrower. It connects the lender to the borrower through online platforms. Peer to peer lending is famous because it cuts off intermediaries.

Peer to peer lending is a dual-way in nature. Small businesses or individuals get crowdfunded loans as well as personal loans. On the other hand, lenders/investors enjoy favorable rates when investing in peer to peer lending investments.

Why invest in Peer to Peer lending investment?

As an investor in the UK, plunging in a profitable investment is vital. Peer to peer investment companies often charges a minimal rate to match you with a borrower. The low charge then lets you enjoy higher rates than savings and other investment options offered by banks. This feature makes it among the best micro investment strategies.

Peer to peer also makes you your bank. You can lend investment loans to borrowers in your own accord. However, as an investor, you should be guided by the borrowers' credit score. Peer to peer lending sites in the UK has mainly grown due to this factor (ability to be your bank).

What are the benefits?

Lending money in the UK and all over the world, in general, is the primary niche that banks benefit. Therefore, when using peer to peer investment platforms, you eliminate banks from the equation. This enables you to earn best rates for peer to peer lending than other instruments. You also gain the best p2p lending rates without a higher risk.

Best peer to peer lending UK companies operates with lower overhead than banking systems. The services are also cheaply. This benefit is mainly attributed to the fact that the peer to peer lending business is carried out online.

What are the downsides?

Like any other investment, Peer to peer also comes with some drawbacks. First and foremost, as an investor in the peer to peer lending, one runs a risk of default of loan repayment by the borrower. There is low insurance.

Exclusion of the banking system excludes the high trading risks carried out by banks. This adds to lack of deposit insurance. Another downside that marks peer to peer lending investment is low liquidity and volatility. The loans made are mainly long term loans and cannot be regained to cash quickly.

Can you get best rates for peer to peer lending?

This is a significant concern for all investors. The UK top peer to peer lending platforms rates is quite higher compared to savings and other investment instruments provided by banks. You can earn up to 5-7% annual rates. However, these lending rates may vary accordingly.

Do all Peer to Peer investments offer a fixed return?

The rates vary according to different peer to peer lending companies and loans. For example, while using the Zopa investment platform, you obtain an average lending rates of 5% for defaults. On the other hand, if you use another platform such as Funding circle, you only secure an average of 7% after fees and bad debts loans.

Related: How Much Do You Make With P2P lending?

Best UK peer to peer lending

For an investor with a high proclivity for success, choosing the best UK Peer to Peer lending service is essential. There are various peer to peer lending sites in the UK. Here are some of the leading peer investment sites in the UK to choose.


Zopa is the longest running peer to peer lender in the UK. It is one of the best peer to peer lending companies. Having been launched in 2005, Zopa has accumulated around 50,000 active lenders. Zopa charges a fee of 0% - 2% of the loan to borrowers.

The peer to peer lending minimum investment is 10 pounds. Once an investor lends a lump-sum amount, it is split into many chunks that are subsequently let out as microloans. Zopa attracts an average return of up to 5% after loan is one of the best UK peer to peer Lending platform.


Ratesetter is another leading investment site in the UK. Ratesetter has a default rates of 0.71% and a zero fee charged to lenders. The platform provides for 10 pounds as the minimum investment and has no maximum limit. It attracts an average of 4.5% for lenders.

Funding circle

Funding circle This is a one of the best peer to peer lending investment site. Funding circle has a default rate of 1.5% with an average of 46,000 active lenders. The site charges 1% on the loan repayments made by borrowers. The site has an outstanding 7% average return for lenders. It has no maximum limit of investment.

Assetz capital

Assetz capital is another popular investment platform. The account offers an attractive average return of 3.75% annually. With this platform, you will invest in business loans. It does not have a protection scheme, and therefore you'll need to invent your own.

This is just but a few of the fantastic investment platforms in the UK. They are sure to provide you the requirements to start investing immediately. Other investment sites include Alblrate, Money thing, Collateral among others.

Cross-border P2P lending open to investors from UK

There are several reasons to invest broadly like diversification but the more important are the features offered by European P2P platforms that are not available in British P2P platforms like buy-back guarantee, secondary market …

We are very satisfied with the Baltic P2P platforms, such as PeerBerry where you can normally achieve a consistent return of 8 - 10%.

The platforms has expanded their offer to include investments in GBP, to protect investors from currency risk. This is a very attractive offer for UK investors.

Account will be set depending on the currency of your first deposit. In case your first deposit is made in GBP, all operations under your account will be held in GBP.

With buyback feature, the platform will buy back the loan whenever the borrower defaults on his payment obligations.

Related: Peer to Peer Lending Sites - Full List

How is p2p lending taxed?

Annual returns obtained from the peer to peer lending sites are taxable as income. However, up to £1,000 of interest earned each year on this platforms for basic-rate taxpayers can be earned tax-free. The innovative Finance ISA can be set up in your platform so that all interests paid by borrowers are not taxed.

Having discussed these issues, it is quite clear that peer to peer lending invest is the new revolutionary form of banking. It mandates you to be a bank of your own and thus enjoy significant changes in loan rates and interests.

Peer to peer lending sites revamps traditional banking into next level banking. Therefore, deciding on the best UK peer to peer lending platform is essential. It not only gives you privilege in the loan rates but also lets you have direct control over the economy.

Related: How to Lend Through P2P Lending Platforms

I’ve been teaching Economics for high school students, mostly focusing on personal finance. I also have a good basic understanding of economics from several economics classes during my university studies.


  • Guest
    Jamaldeen Ashraf Monday, 31 August 2020

    Hi i want borrow £120.000
    to property developers buy house do it up and sale , i have a house worth £450.000
    I will put house as a guarantor

Leave your comment

Guest Tuesday, 29 November 2022