LendingClub doesn’t call itself LendingClub anymore. On June 22, 2026, the company formally changed its name to Happen, Inc., renamed its bank subsidiary Happen Bank, and moved its stock listing to Nasdaq under the ticker HAPN. The press release calls it a rebrand. It’s really a funeral, five years delayed. LendingClub stopped letting retail investors fund individual loans at the end of 2020, then in February 2021 completed its acquisition of Radius Bank and pivoted to a conventional deposits-and-lending model. The rebrand just made the org chart match what had already been true for half a decade.

That leaves Prosper as the only major U.S. platform where an individual investor can still put money behind a specific stranger’s personal loan. Not a fund. Not a fractional slice of a securitized pool sold by a bank. An actual loan, actual borrower, actual risk. It’s the model peer-to-peer lending was originally supposed to be, back when the pitch was “cut out the bank.” Almost nobody runs that model anymore. Here’s what’s actually left of it, and whether the returns justify the risk in 2026.

Quick Verdict: P2P Lending in 2026

Question	Answer
Is P2P lending still around?	Barely. One major U.S. platform (Prosper) still offers it
Prosper 2025 loan originations	$2.7 billion, up from $2.2 billion in 2024
Share of Prosper’s own loans actually peer-funded	5% in 2025, down from 7% in 2024
Prosper’s advertised average historical return	5.3%
Realistic return range with default risk	3–8% annually
Time to deploy capital	Minutes to set up, ongoing monthly reinvestment needed
Passivity score	5/10 — automated once funded, but you’re underwriting credit risk, not equity risk

Best for: Investors who already max fixed-income allocations and want a small, diversified sleeve of consumer credit exposure. Skip if: You want the “cut out the bank” P2P story from 2012. That platform is functionally gone, including at Prosper.

What Actually Happened to LendingClub

LendingClub was the platform that put P2P lending on the map. IPO in 2014, billions in retail-funded loans, magazine covers about disintermediating banks. Then, at the end of 2020, it shut the door on retail investors funding loans directly, and in February 2021 it closed its acquisition of Radius Bank, completing the pivot to a bank holding company. The company kept originating personal loans. It just stopped letting individuals be the ones behind them.

Fast forward to 2026 and the numbers show how far that shift went. Happen Bank (formerly LendingClub) originated $2.7 billion in loans in the first quarter of 2026 alone, up 31% year over year — a record quarter, and the occasion for the rebrand announcement. More telling: over 90% of that loan issuance is now fully automated through AI underwriting, with application-to-decision time cut by nearly 60%. That’s not a lending marketplace anymore. That’s a bank with a fast approval pipeline, funded by institutional capital and deposits, not by individuals reviewing borrower profiles and picking which ones to back.

Worth being precise here, because two different $2.7 billion figures show up in this story and they measure completely different things: Happen Bank’s $2.7 billion is one quarter of 2026. Prosper’s $2.7 billion, below, is all of 2025.

Prosper Is What’s Left — Mostly

Prosper originated $2.7 billion in consumer loans in 2025, up from $2.2 billion in 2024 — 165,037 loans versus 148,518 the year before, an 11% jump in loan count and a 19% jump in dollar volume. Growing origination volume is a real business, not a legacy platform on life support. That part of the “Prosper is the last one standing” framing checks out.

Here’s the part that complicates it. Peer-funded loans — meaning money that came from individual retail investors, the actual P2P part of peer-to-peer — made up just 5% of Prosper’s 2025 originations, down from 7% in 2024. The other 95% comes from institutional buyers, whole-loan purchasers, and other funding channels. Prosper still runs the retail investor product. You can still open an account and fund fractional notes in individual loans. But the platform’s own growth is happening almost entirely somewhere else, and the peer-funded slice is shrinking as a share of the whole, even as total volume grows.

So “Prosper is the last major P2P platform” is true in the sense that matters for this article — it’s the last one where the retail option exists at all. It’s also true that most of what makes Prosper Prosper today isn’t retail investors anymore, any more than it is at Happen Bank. The label survived. The business model underneath it moved on almost as far as LendingClub’s did, just without the name change to signal it.

Is Peer-to-Peer Lending Still Around in 2026?

Yes, but the field collapsed hard over the past five years. Here’s what happened to the platforms that used to make up the category:

1. RateSetter exited the UK retail P2P market in 2020, acquired by Metro Bank.
2. LendingClub stopped retail investor funding at the end of 2020 and completed its rebrand to Happen Bank in June 2026.
3. Zopa, the UK’s original P2P lender, exited retail P2P lending in December 2021 and pivoted entirely to digital banking.
4. Funding Circle permanently closed its retail investor platform in March 2022, shifting to institutional-only funding for its SME loans.
5. Assetz Capital wound down its retail P2P offering in December 2022.
6. Prosper is the survivor — the only major platform still running a retail-funded product, even if that product is now a small fraction of its total volume.

That’s not a healthy sector. That’s a sector that had one business model fail commercially, over and over, at nearly every company that tried it, until one name was left holding the label.

Why the Big Platforms Quit Retail Funding

Every one of these exits traces back to the same math problem. Retail investors are expensive to acquire, expensive to service, and — this is the part that actually killed the model — they don’t reliably outperform what a platform can get from institutional capital at a lower cost of servicing. A hedge fund or bank buying whole loans in bulk doesn’t need a slick investor dashboard, doesn’t call support when a borrower misses a payment, and doesn’t panic-sell during a credit downturn the way retail money sometimes does. Once platforms could access that institutional capital at scale, the retail P2P product became a legacy cost center wrapped around a marketing story, not the core funding engine anymore.

This site has covered that institutional-vs-retail dynamic before in business development companies, where non-accrual rates hit a decade high across the sector in Q2 2026. BDCs and P2P platforms are both, at bottom, vehicles for retail investors to access consumer or business credit that used to sit exclusively on bank balance sheets. The BDC structure survived because it wraps the credit risk in a regulated, professionally managed fund. The original P2P structure — individual investors hand-picking individual loans — mostly didn’t survive contact with real default cycles and cheaper institutional capital.

What Returns Actually Look Like

Prosper advertises a 5.3% average historical return for investors funding notes on its platform, with the standard disclosure that past performance doesn’t predict future results and actual returns depend heavily on the prepayment and delinquency pattern of the specific loans backing each note. That’s the honest range this category has run in for years — published P2P investor returns typically land 3-8% annually, and the spread between those numbers is basically a measure of how much default risk you’re willing to eat.

That’s a category this site has evaluated exactly zero times before, despite covering business development companies extensively, tokenized real estate, dividend ETFs, and CD ladders in detail. There’s a reason for the gap: unsecured consumer credit funded loan-by-loan by retail investors is a genuinely different risk profile than any of those, and it’s harder to diversify against without either a lot of capital spread across hundreds of notes or a platform doing that diversification for you.

Run the comparison against safer, simpler alternatives and the math gets uncomfortable. A CD ladder or T-bills were paying in the low-to-mid 4% range for money with no default risk attached to the individual borrower level as of mid-2026. Prosper’s 5.3% advertised average sits maybe a point or two above that risk-free baseline, in exchange for taking on consumer credit risk directly, one borrower at a time, with no FDIC insurance and no professional portfolio manager between you and a missed payment. A BDC like MAIN pays a higher yield for a similar category of credit risk, wrapped in a professionally managed, diversified structure instead of requiring you to pick and monitor individual notes yourself.

Compared to Alternatives

Vehicle	Typical Yield	Who Picks the Credits	Diversification	FDIC/SIPC Protected
Prosper notes	3-8% (5.3% avg. advertised)	You, loan by loan	Manual — needs hundreds of notes	No
BDCs (e.g. MAIN)	7-11%	Professional manager	Built into the fund	No
CD ladder	~4%	N/A — fixed rate	N/A	FDIC insured
T-bills	~4%	N/A — government backed	N/A	Backed by U.S. Treasury

The honest read: Prosper doesn’t clearly beat a BDC on a risk-adjusted basis, and it doesn’t come close to matching the safety of a CD or T-bill for a comparable yield. What it offers instead is direct exposure — you’re choosing which specific loans to fund, not buying a professionally managed basket. That’s a feature for people who want the control. It’s a liability for people who don’t have the time to actually underwrite what they’re picking.

Who Should Actually Consider Prosper

Investors who already hold CDs, T-bills, and BDC positions and want a small, deliberately diversified sleeve of direct consumer credit exposure. Think low single-digit percentage of a fixed-income allocation, spread across enough individual notes that one bad borrower doesn’t wreck the return.

People who specifically want the retail-funded model to exist and are willing to accept a modest return for keeping it alive. That’s a real, if small, motivation — Prosper is genuinely the last option if that matters to you.

Who Should Skip It

Anyone expecting the 2012-era P2P pitch of meaningfully beating the market by cutting out the bank. That version of the story is gone. What’s left is a modest-yield, real-default-risk product competing against BDCs that pay more for similar risk with professional management attached.

Anyone who hasn’t diversified across enough individual notes. A handful of loans funded on Prosper isn’t a diversified fixed-income position — it’s a bet on a handful of borrowers, and consumer loan defaults don’t announce themselves in advance.

Investors who haven’t checked current CD or T-bill rates first. If risk-free yield is running close to what Prosper advertises after accounting for expected defaults, the risk isn’t being compensated.

The Bottom Line

Peer-to-peer lending as a category didn’t die so much as it got quietly replaced by institutional capital at every platform that tried it, one exit at a time, until Prosper was the only name left standing that still runs the retail version. Even at Prosper, retail money now funds just 5% of what the platform originates. The option is real. The category it belongs to is not the growth story it was in 2012, and the returns — 3 to 8%, before you account for the work of picking and monitoring individual notes — don’t clearly beat what a BDC or a plain CD ladder pays for comparable or lower risk. Worth a small allocation if you want the direct-lending exposure specifically. Not worth building a passive income plan around.

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LendingClub/Happen Bank rebrand details from the official Happen Bank announcement and deBanked’s coverage. Happen Bank Q1 2026 origination and AI underwriting figures from its Q1 2026 earnings call transcript. Prosper origination and peer-funding figures from its FY2025 Form 10-K and Prosper.com. Zopa and Funding Circle exit dates from Alternative Credit Investor. Market attention context from the August 18, 2026 P2P lending market share report. This is not financial advice. Verify current rates and returns before investing.