What is peer-to-peer lending? A simple explanation
A peer-to-peer loan (vertaislaina in Finnish) is a loan given from one private individual to another, without a bank as intermediary. A short guide: how it works, who can apply, and why it’s worth it.
The short answer in one paragraph
Peer-to-peer lending is lending where the money comes from another private individual rather than from a bank. The word “peer” is the point: both sides are private parties in the same legal position, with no credit institution in between taking the risk. In Finnish the same thing is called vertaislaina.
The term covers two rather different practices that are routinely confused in everyday speech. In platform lending a company pools investors’ money, scores the applicants and splits each loan into dozens of pieces — the investor does not know the borrower and the borrower does not know the investor. In direct lending two people agree the terms between themselves and sign a promissory note. The first resembles a fund investment, the second resembles a loan to a friend, and the risks, costs and applicable law differ substantially.
A third thing is worth separating right away: a classifieds board is neither of these. Vertaislaina24 publishes listings in which the parties state what they are looking for or offering. We do not grant loans, we do not broker them, we do not score anyone and we do not handle payments between the parties. We are not a credit institution and not a credit intermediary — the position is described on legal status.
Overview of the topic
"Peer-to-peer" means "from an equal to an equal". In practice a P2P loan is money that one private individual gives to another for interest, without a bank or credit institution as intermediary.
In Finland the P2P loan market has grown since the 2010s, when the first platforms (Fixura 2010, Fellow Finance 2013) entered. Today Finns’ invested sum in P2P loans is in the hundreds of millions of euros.
Vertaislaina24 is a newer alternative: a classifieds board where the agreement is made directly, without scoring and without platform fees. The borrower pays nothing for the first 5 listings (then €3); the investor €10 — that’s our whole price.
Peer-to-peer lending, bank credit and instant loans side by side
| Feature | P2P via a platform | P2P agreed directly | Bank consumer loan | Instant loan |
|---|---|---|---|---|
| Funder | Private investors | One private individual | A bank | A credit company |
| Credit check | Always, automatically | Only if the counterparty asks | Always | Always |
| Rate is set by | A model-produced grade | Negotiation | Margin and reference rate | A price list |
| Consumer Protection Act, ch. 7 | Applies | Does not apply | Applies | Applies |
| Collection handled by | The platform | The creditor personally | Bank and agency | Collection agency |
| Flexibility of terms | None | Full | Limited | None |
The consumer protection row is the most important one in this table: it decides whether the borrower has an interest rate cap, a right of withdrawal and a right to repay early. In a loan between two private individuals all of that has to be written into the promissory note by the parties themselves.
Where peer-to-peer lending came from and where it stands
Peer-to-peer lending began in Britain in 2005, when Zopa opened the first marketplace connecting savers and borrowers around the banks. The idea spread quickly after the financial crisis, because both sides were dissatisfied for the same reason: deposits paid no interest and loan applications were not approved. The model reached Finland in 2010 when Fixura started as the first operator in the Nordics, with Fellow Finance following in 2013.
The sector’s trajectory has been instructive. The early promise was that technology would remove the middleman and split the saving between the parties. In practice the platforms became middlemen themselves, with their own fees, their own credit scoring and their own regulation. The largest Finnish operators have since moved under a licence or stopped new lending, so part of what is still called peer-to-peer lending is now ordinary bank credit. The purest form of peer lending today is the one that happens without any platform at all.
In size the market is small. Finnish households hold €17–18 billion in consumer credit and the peer-to-peer share stays below one per cent of it. Direct agreements between private individuals are not recorded anywhere, even though they are probably the most numerous by count — most Finns have at some point lent money to a relative or a friend. Those are peer-to-peer loans just as platform loans are, and the same promissory note legislation applies to them.
Source: Public reviews by Fixura and Fellow Finance, Bank of Finland monetary financial institution statistics and Financial Supervisory Authority releases on peer-to-peer lending; data checked in August 2026.
How a peer-to-peer loan comes into being
The simplest possible example: one person needs €3,000 and another has it to invest. This is how that becomes a debt relationship.
- 1
The need is put into words
The borrower states the amount, the purpose and the period over which repayment will happen. Without those three figures nobody can assess the offer at all.
- 2
A counterparty appears
On a platform an algorithm allocates the loan to investors automatically. On a board the other party reads the listing and makes contact — you can browse active listings without registering.
- 3
The terms are negotiated
Interest, term, instalment, the consequence of late payment and any collateral. On a platform these arrive fixed; in a direct agreement they are the substance of the negotiation.
- 4
The promissory note is signed
A written note is the only document that lets the debt be recovered later. It needs no notary but it does need both parties identified and both signatures. The clauses are set out on loan agreement terms.
- 5
The money moves by bank transfer
From the named party’s account to the named party’s account, with the agreement reference in the message field. That transaction is part of the evidence later.
- 6
Repayment and monitoring
Instalments are paid on the agreed dates with the same reference. A platform tracks this in its system; in a direct agreement both parties do. Work out the instalment in advance with the loan calculator.
Route planner: three questions, one recommendation
Peer-to-peer lending is not a single product but a set of different routes. Answer three questions to see which route fits your situation and what to read next. The tool collects nothing and sends nothing to a server — everything runs in your browser.
Recommended route
Answer all three questions to see the recommendation.
Below €2,000 an arrangement fee eats the largest relative share of the loan. Write a listing that states the purpose and the repayment dates, and work out the total cost with the loan calculator before you agree on a rate. Background: how P2P lending works in Finland.
The most common P2P range. Compare the platforms’ real annual cost against your own offer first: Fellow Finance, Fixura. If you want to agree directly, write the agreement terms down before any money moves.
Above €15,000 collateral and witnesses are not a formality. Go through the contract terms clause by clause and check the risks on both sides before signing.
With a small pot, diversification is the only protection you have. Do not put everything into one listing — read how to calculate expected return and credit losses and follow the active listings before the first agreement.
At this size it is worth comparing platform investing and a direct agreement side by side: the platform handles collection, a direct agreement leaves the whole interest to you. Background: P2P mechanics and AuroraX.
With large sums, collateral and enforceability decide whether you get your money back. Read the terms, the risks, and check what a credit default actually means for the counterparty.
Even a small loan to a friend is worth putting in writing. Use a promissory note structure and add a reference in the bank transfer message field — that is the only proof when memories differ.
Write down the interest, the due dates and the consequence of late payment. Without a written interest the debt is interest-free, and without due dates late-payment interest never starts running. See the wording of each clause.
For a large promissory note, two witnesses and collateral are the practical minimum. Read the agreement terms and the risk list before signing.
A clean credit record is a negotiating asset: say plainly in the listing that there are no entries, and the other side dares to offer a lower rate. The cheapest route is still usually a bank consumer loan — put that out to tender first and use P2P only if the terms are not acceptable.
A payment default closes the bank and most platforms, because they run an automatic credit check. On a classifieds board a default does not block publishing, but honesty pays: read what options remain and how to word the listing.
If you do not know the state of your credit record, check it before applying for anything. You can obtain your own credit data free of charge once a year from the register keeper. After that you know whether to go to a bank or straight to the listings board.
Four basics a peer-to-peer loan requires
Peer-to-peer lending needs no licence and no special expertise, but without these four things you end up with an agreement that cannot be enforced.
Both parties identified
Full name and personal identity code or business ID. A first name and a phone number are not enough: without identification a promissory note does not reach enforcement.
Written form
An oral loan is valid in Finland but practically impossible to prove. A written note is the cheapest insurance either party can take out.
Interest and due dates recorded
Without a recorded rate the debt is interest-free. Without due dates late-payment interest never starts running, because nothing is ever overdue. The wording is on loan agreement terms.
A traceable payment method
A bank transfer from a named account to a named account. Cash, cryptocurrency or a third person’s account means, in practice, that no evidence of the payment exists.
If the application is rejected — and three common misconceptions
A rejection is the outcome of an arithmetic check, not a verdict on the applicant. A platform usually turns an application down because the monthly instalment does not fit the income once housing and existing loans are deducted, or because there is a payment default entry on file. The first sensible move is to ask for the reason in writing and to check your own credit record with the register keeper — an incorrect entry can be corrected, and correcting it is free. The second is to cut the amount and shorten the term: the same applicant on the same income gets a different answer once the instalment halves. Collateral or a guarantor comes third. Firing off applications to several providers in the same week is the worst option, because every enquiry stays visible and the next reader sees them.
Three persistent misunderstandings circulate about peer-to-peer lending, and all three cost money. The first is that it is automatically cheaper than a bank loan. It is not: without the bank margin the rate can be lower, but without the bank’s risk management it is usually higher. With a clean credit record a bank consumer loan is nearly always the cheapest option, and it should be put out to tender first.
The second is that peer-to-peer lending is unregulated. It is not. The Promissory Notes Act, the Interest Act, the usury provision of the Criminal Code and the moderation clause of the Contracts Act apply to every loan regardless of who provides the money. What is missing is consumer protection, and that is a different thing from an absence of regulation.
The third is the idea that no agreement is needed when the parties know each other. In practice loans between friends and relatives produce the most disputes, precisely because terms go unrecorded and recollections diverge a year later. A written agreement is not a sign of distrust but its opposite: it removes the reason to argue.
- Peer-to-peer lending is not automatically cheap — put a bank loan out to tender first if your credit record is clean.
- It is not unregulated, but consumer protection law does not shield a loan between private individuals.
- Platform lending and direct agreements are different products with different risks — compare them on P2P loan in Finland.
- A loan to someone you know needs a written agreement more than one to a stranger, not less.
- An investor’s nominal rate is not a return — credit losses come off first, as set out on invest in P2P lending.
Peer-to-peer lending weighed up for a beginner
Advantages: what this route gives you
- +Terms can be fitted to a situation that a standard product does not recognise.
- +The decision is made by a person to whom an unusual situation can be explained.
- +For an investor the interest return is clearly above a deposit.
- +A direct agreement carries no arrangement fee and no monthly charge.
Drawbacks and limits: where it breaks down
- −There is no consumer protection when both parties are private individuals.
- −In a dispute, sorting it out is the parties’ own job and it costs time.
- −An investor has no deposit guarantee and no capital protection.
- −In a loan between friends the personal relationship and the money relationship almost always become entangled.
Who this is not for
- ×Anyone who can get cheaper credit from a bank — compare that first.
- ×Anyone unwilling to sign a written agreement.
- ×An investor who may need the money back at short notice.
- ×Anyone looking for a way out of an already accumulated debt spiral.
Legal framework: which act governs what
A loan between two private individuals is governed by the Promissory Notes Act 622/1947. The act sets no formal requirements about notaries or witnesses, so a dated and signed document is enough. It does regulate assignment: if a creditor sells the claim onward, the debtor must be notified, otherwise the debtor can validly keep paying the original creditor.
The Interest Act 633/1982 enters the picture when a payment is late. If no late-payment interest has been agreed, it is the Bank of Finland reference rate plus seven percentage points. If no interest at all has been agreed in writing, the loan is in principle interest-free — a detail that decides thousands of euros in long-running loans between friends.
Chapter 7 of the Consumer Protection Act 38/1978 covers credit granted by a trader to a consumer. It does not apply when both parties are private individuals, but it applies immediately if one party lends professionally. Professional lending also requires registration under Act 186/2023, and the Financial Supervisory Authority supervises licensed operators. A classifieds board is neither — it neither grants nor brokers credit.
| Act | Number | What it governs | Practical consequence |
|---|---|---|---|
| Promissory Notes Act | 622/1947 | Form, transfer and limitation of a promissory note | A written note is valid without a notary; transfer requires notice to the debtor |
| Interest Act | 633/1982 | Late-payment interest and how the rate is set | Without a contract term, late interest is the reference rate + 7 percentage points |
| Consumer Protection Act | 38/1978, ch. 7 | Consumer credit granted by a trader | Does not cover a loan between two private individuals — but does cover anyone lending professionally |
| Criminal Code | 39/1889, 36:6 | Usury | A clearly disproportionate rate can be a criminal offence, not merely an invalid term |
| Contracts Act | 228/1929, §36 | Adjustment of an unreasonable term | A court can afterwards moderate the interest or the payment terms |
| Act on Registration of Certain Credit Providers | 186/2023 | Registration of credit providers and intermediaries | Professional lending requires registration; a classifieds board is not credit intermediation |
The table is a general overview, not legal advice. In an individual case, use a lawyer or the municipal financial and debt counselling service.
Spotting a scam before the money leaves
In agreements made directly between private individuals there is no platform background check, so recognising fraud is the parties’ own responsibility. These signals repeat in almost every case we have heard about.
- An advance fee before the loan. There is no situation in which receiving a loan requires a “handling fee”, “insurance fee” or “notary fee” paid up front. This is the most common loan scam in Finland.
- Urgency and deadlines. “The offer is valid for one hour” is pressure, not a term. A real lender gives you time to read the agreement.
- Contact only through a messenger where messages disappear. Ask for every term in writing, by email or in the agreement itself.
- The counterparty refuses to give a personal identity code or business ID for the agreement. Without identification a promissory note cannot be enforced.
- A request to send money to a third person’s account, in cryptocurrency or on a payment card. A lawful loan is paid by bank transfer to the named party’s account.
- For investors: the applicant wants the money immediately but refuses to sign a promissory note. Without a written agreement, collection is practically impossible.
If you suspect a crime, report it to the police. Lender registration can be checked in the register kept by the Regional State Administrative Agency for Southern Finland, and the Finnish Financial Supervisory Authority maintains a warning list of operators without authorisation in Finland. More on this on risks of P2P lending.
How the listings board actually works
Vertaislaina24 is not a platform that slices loans into pieces and runs the payments. It is a classifieds board: you write a listing, the other party gets in touch, and everything after that happens between the two of you. Four steps cover the whole process.
Listing
You state the amount, the term you want, your interest expectation and a short justification. The more concrete the text, the fewer pointless contacts. Prices are on the pricing page.
Contact
The other party contacts you through the service. We do not score either side and we do not recommend anyone — the judgement is yours. You can browse active listings without registering.
Agreement
Terms go into a written promissory note before any money moves. The wording of each clause is on loan agreement terms.
Payments
Money moves directly between bank accounts. The service neither receives nor forwards payments, so the transfer visible on your bank statement is itself your proof of payment.
Vertaislaina24 does not grant loans, does not broker them and takes no part in payments between the parties. We are not a credit institution and not a credit intermediary, and we charge no interest or commission on any loan. The only charge is the fee for publishing a listing.
Glossary: the words the terms are written in
The same thing often goes by three names in P2P discussions. These six terms are enough to read a draft agreement without help.
- Nominal interest
- The annual rate written into the agreement, excluding fees. Two loans with the same nominal rate can cost very differently if one carries an arrangement fee.
- Annual percentage rate
- The rate with all mandatory costs included. The comparable figure, which you can work out yourself with the loan calculator.
- Annuity
- A repayment method where the monthly instalment stays the same and the interest share of it shrinks over time. The most common model in private agreements too.
- Late-payment interest
- Interest that runs after the due date. Under the Interest Act 633/1982 it is the reference rate + 7 percentage points unless otherwise agreed.
- Payment default entry
- An entry in the credit information register for a neglected payment. It affects borrowing for years — see what a default actually blocks.
- Collateral
- Property from which the debt can be recovered if the debtor does not pay. Without collateral the creditor is an ordinary creditor among others.
Frequently asked questions
Where does the word "vertaislaina" come from? +
It is a direct translation of the English "peer-to-peer loan". "Peer" = equal.
Is a P2P loan the same as a vertaislaina? +
Yes. "Vertaislaina" and "P2P loan" are the same thing.
What’s the difference between a P2P loan and a bank loan? +
A bank loan comes from a credit institution. A P2P loan comes from a private individual (via a platform or directly). P2P rates are often higher but availability is better.
Is a P2P loan legal? +
Yes. P2P loans are legal as long as rates are not usurious and the agreement complies with Finnish law.
Where do you get a P2P loan? +
Large platforms: Fixura, Fellow Finance, AuroraX. Direct agreement: classifieds boards like Vertaislaina24.
Are peer-to-peer lending and P2P lending the same thing? +
Yes. P2P is simply the abbreviation of peer-to-peer. In everyday use P2P slightly more often refers to platform lending and “peer-to-peer lending” more broadly to all lending between private individuals, but the distinction is not established. A fuller breakdown is on P2P loan in Finland.
Is peer-to-peer lending legal in Finland? +
It is. A private individual may lend to another without a licence or registration. The limit is professionalism: repeated lending for profit is business activity requiring registration. In addition, the Criminal Code prohibits usury regardless of who provides the loan.
Does a peer-to-peer loan need a notary or witnesses? +
Neither is required for validity. Witnesses are still worth having for larger sums, because they make it harder to claim later that a signature is not genuine. The practical threshold usually sits around €5,000.
Can the interest rate be zero? +
It can. An interest-free loan is perfectly valid and is common between people who know each other. Record the absence of interest explicitly, though, so nobody can argue later about whether a rate was agreed. For an unusually large interest-free loan to a close relative, check the gift tax threshold as well.
What is the difference between peer-to-peer lending and crowdfunding? +
In crowdfunding money is often raised for a company or a project and the return may be a share, a product or interest. In peer-to-peer lending the return is always interest and the debtor is a named party. Financing a company with a group of investors is a separate arrangement with its own contract requirements.
Is Vertaislaina24 a peer-to-peer lending platform? +
No. The service is a classifieds board that publishes the parties’ own listings. We do not grant loans, do not broker them, do not score applicants and do not handle payments. The only charge is the fee for publishing a listing, shown on the pricing page.
Read next
Once the basic concept is clear, the next question is practical: which route fits your situation and what has to go into the agreement.
- P2P loan in Finland — platforms and direct agreements compared side by side.
- Invest in P2P lending — the same thing from the investor’s side.
- Risks of peer-to-peer lending — what can go wrong on each side.
- Loan agreement terms — what has to be written down.
- Fellow Finance and Fixura — the best-known Finnish platforms.
- P2P loan without a credit check — what a default entry changes.
- Legal status — why a classifieds board is not a credit intermediary.
Try peer-to-peer lending on Vertaislaina24
Post a listing or invest in your first loan — first 5 listings free for borrowers.
Publishing a listing is not a loan application and binds neither party to anything. Vertaislaina24 does not grant loans and does not broker them.
Publisher: Vertaislaina24 — a private-individuals’ listings board operated by NET Partner OÜ (est. 2007). We are not a bank, lender or credit intermediary. About us · Legal status
Sources (Finlex): Korkolaki 633/1982, Oikeustoimilaki 228/1929, Velkakirjalaki 622/1947, Laki 186/2023, Finanssivalvonta. Content is checked against public sources and is not legal advice.