May 20, 2026

What Is Peer-to-Peer Lending and How SoLo Funds Uses It

Quick Take

Peer-to-peer lending connects borrowers directly with individual lenders through a platform, removing the traditional bank from the equation.
SoLo Funds is a peer-to-peer community marketplace where real members fund each other’s short-term loan requests of up to $650.
On SoLo, borrowers set their own repayment dates and tip amounts. Lenders choose which requests to fund based on the borrower’s SoLo Score and request details.

Good to Know

SoLo does not report to the major credit bureaus. Third-party collectors may have different reporting practices.
Funding is not guaranteed and is subject to lender acceptance. Tips are voluntary and set by the borrower.
Returns are not guaranteed and the loan amount may be lost. Never lend money you cannot afford to lose.
SoLo uses a bank partner (Member FDIC). Pass-through insurance may apply. Check the Terms.

Most people learn about borrowing money through a bank or credit union. You apply, they check your credit, they decide whether to approve you and at what rate. Peer-to-peer lending works differently. Instead of a financial institution making that decision, individual people do. The platform facilitates the connection, and funding comes from members of the same community.

SoLo Funds is built entirely on this model. Understanding how peer-to-peer lending works is the foundation for understanding why SoLo exists and how it operates.

What Peer-to-Peer Lending Actually Means

Peer-to-peer lending, often called P2P lending, is a method of borrowing and lending that cuts out the traditional financial middleman. Instead of depositing money into a bank that then lends it to strangers, individual lenders choose specific borrowers to fund. Instead of applying to a bank with a credit score requirement, borrowers post requests that the lending community reviews.

The platform plays a critical role. It provides the infrastructure, the verification, the trust signals, and the transaction mechanics that make person-to-person lending safe and scalable. Without the platform, individual lenders would have no way to evaluate borrowers, manage funds, or recover capital if repayment fails.

How SoLo Funds Applies the P2P Model

SoLo is a peer-to-peer community lending marketplace focused on short-term gaps. Here is how the model works in practice:

A borrower posts a request. They specify the amount needed (up to $650), the reason, the repayment date (up to 15 days), and an optional tip they are offering to the lender who funds them.
Lenders browse the marketplace. They can see each borrower’s SoLo Score, tip amount, loan purpose, and repayment date. They choose which requests to fund based on their own criteria.
A match is made. When a lender funds a request, the borrower receives the funds. The lender’s capital is committed until repayment.
Repayment happens. On the repayment date, the borrower repays the principal plus the tip they offered. The lender receives both back in their SoLo Wallet.

This is meaningfully different from direct-lender apps like Dave, EarnIn, or Brigit, where the company itself provides the advance, lending can be based on credit history and bank account standing, and the user never interacts with another person.

The SoLo Score as a Trust Signal

In traditional lending, a credit score is the primary signal lenders use to evaluate risk. In peer-to-peer lending on SoLo, the SoLo Score plays a similar but distinct role. It is a 0 to 99 internal trust metric built entirely from a member’s behavior on the SoLo platform. Repayment history, tip behavior, and consistency all contribute to the score over time.

A higher SoLo Score signals to lenders that the borrower has a strong track record on the platform. A lower score indicates a newer or less established member. Neither guarantees a funding outcome, but the score gives lenders a concrete signal to work from when deciding which requests to back.

Why the P2P Model Works Differently for Borrowers

For borrowers, the peer-to-peer model changes what the approval process actually looks like. Instead of submitting to a credit algorithm that weighs your FICO score heavily, you are presenting your request to a community of real people. Your SoLo Score matters, but so does how you frame your request. A clear, specific reason, a realistic repayment date, and a competitive optional tip all factor into whether lenders choose to fund you.

This means borrowers have genuine agency over their funding odds in a way that traditional credit applications do not allow. Our guide on how to get funded faster on SoLo walks through the specific steps that tend to improve a borrower’s visibility in the marketplace.

Why the P2P Model Works Differently for Lenders

For lenders, peer-to-peer lending means putting capital to work in a way that produces direct returns tied to real decisions. Every loan funded on SoLo is a choice. Lenders can apply criteria, use SoLo IQ to analyze their portfolio patterns, and build a lending strategy that reflects their own risk tolerance and financial goals.

This is different from investing in a fund or leaving money in a savings account. The lender sees where their money is going, to a real person in the community, and earns a return tied to that specific decision. Returns are not guaranteed and the loan amount may be lost. Never lend money you cannot afford to lose. For a full breakdown of lending strategy on SoLo, see our lending portfolio guide.

SoLo vs Traditional P2P Platforms

Older peer-to-peer lending platforms like LendingClub and Prosper focused on larger personal loans over longer terms, often targeting debt consolidation and home improvement for borrowers with established credit. SoLo operates at a different scale and for a different population. The loans are smaller (up to $650), the terms are shorter (up to 15 days), and the platform is designed for members who may not qualify for traditional P2P platforms.

SoLo also brings a community layer that older P2P platforms did not prioritize. Members are not anonymous accounts on a ledger. They are part of an ecosystem where reputation, built through a SoLo Score, creates real relationships between borrowers and lenders over time.

SoLo FAQ: How does borrowing work?
SoLo FAQ: How does lending work?
SoLo FAQ: What is the SoLo Score?

Real people funding real people. No banks required. Download SoLo Funds and join the community.

Download SoLo Funds in the App Store
Download SoLo Funds in the Google Play Store