Make Money by Loaning Money on Reddit (Peer-to-Peer Lending)

We all have that one friend who keeps lending money from us. If you don’t, chances are you are that person. All joking aside, borrowing money is often high risk, low reward type of deal, but it can be an easy and lucrative source of passive income.

As you probably already heard, there are established platforms for investing in peer-to-peer lending such as LendingClub and Prosper, so I won’t cover them much in this article. Truth to be told, I’m also an adrenaline addict who likes the risk.

The proven platforms such as LendingClub or Prosper offer around 7% annual return, but there is an online community where you can make 20% in a few days.

Of course, higher profit = higher risk (like in any other business really). That community is Reddit Borrow. This subreddit is a medium to connect private lenders to people requesting a short-time personal loan, and I am gonna share my experience with it.

If you are curious, simply visit /r/borrow on Reddit and take a look around, you’ll see a bunch of people who are searching a short-term loan on the one side and on the other side, you’ll see people who are willing to lend money with an interest.

lending on reddit

This is one of most typical requests – the guy needs 100 bucks till his paycheck or this one who requires $100 till tax return, same as the next one.

p2p lending reddit

All these guys have some things in common – unexpected expenses which they can’t cover and common sense not to borrow money from friends and family.

Don’t lend money to friends or family unless you’re prepared to lose either your money or your friendship.

You will see requests for ridiculous amounts like this one:

But I suggest staying away from this type of guys. Many of them are building their reputation through small amounts while their goal is to screw someone over a bigger amount later on.

Ok, let’s start with lending money

Like most beginners, I was very hasty, so I jumped at the opportunity to get into the game, without previously looking at all the parameters.


A woman from Canada wanted a $120 loan, which I provided and guess what? A month has passed, and she failed to return any of my messages. Naturally, I was enraged, so I went for the “submit a PayPal dispute” route, and I got my money back.

unpaid borrowed money

Much to my surprise, she then came back and claimed that she did return my money. Of course, that was a lie, as PayPal did it for her!

lending peer to peer

Regardless of this negative experience, I decided to give it another try. To be honest, I was able to get my money back after the first fiasco, so that certainly helped.

In no time, I found a man from London who asked for a £100 loan.

peer to peer lending

I chose to lend him the money, and in the next 10 days, he paid me back along with the interest.

p2p lending

Apart from that, I continued with this practice a few more times, coming up with $10 or $20 in profit quckly. Considering that the sums I lent weren’t huge and that the money came in an almost entirely passive way, I was more than satisfied with the results.

Take into account that some people can ask for large sums of money, but I wasn’t willing to take that risk. For example, I once stumbled upon a user with a good track record, asking for $2,000, and he offered a $500 interest. You might be braver than I was, but I suggest not to be 😉

p2p borrowing

There are some heartwarming stories from time to time, where users show gratitude on this subreddit. It’s nice to see that, every once in a while.

lending money

To sum it up, I found this method quite useful, at least when it comes to passive income. Now, whether it’s entirely legal or not, I don’t have a clue. Either way, I wouldn’t exactly recommend it for the masses. In case you want to lend some money and turn it into profit, try some of the legal platforms designed for these purposes, such as LendingClub.

Still, if you decide to stick to Reddit, I wish you the best of luck, and remember, always invest the money you can afford to lose. Lastly, I have to warn you that Reddit borrow is very high risk and that you really shouldn’t do it, unless you’re willing to take a gamble.


  • NEVER send any money to new accounts.
  • DO NOT lend money to users asking for $100+ if you aren’t familiar with their borrowing history.
  • ALWAYS keep an eye on their personal Reddit page, and check out their karma, borrowing history, and past comments they made.
  • Check out the user history, and see whether the person was active in the communities such as /r/drugs or /r/drunk. I recommend staying clear away from those users, at least when it comes to lending money.
  • Always use PayPal.
  • Do not send money as friends and family (you won’t be able to recover that money).
  • PayPal offers a 6 month protection period.

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3 thoughts on “Make Money by Loaning Money on Reddit (Peer-to-Peer Lending)”

  1. Super interesting as I had not heard of Reddit Borrow (v. the much better known Prosper and Lending Club). That said, I don’t see this as passive income — you still need to browse the requests and profiles. There is a high risk of default, and given the small amounts, that time spend and risk doesn’t seem like it could be adequately compensated in drips of $10, $20.
    We have done one private loan — in our solo 401k. We checked multiple references, and this is an experienced real estate developer with a 100% payment track record. It feels like passive income now but wasn’t during the due diligence phase. But the higher amount (we get over $2k/ mo in interest) make it worthwhile.

    • Well, 100% passive income doesn’t exist as such, it’s more like a side hustles with minimal investment of time and/or capital.

  2. Hello,

    what option do you select to send the money over, so that you can file a dispute with paypal? It is not send money to family or friends I assume? Which category do you choose in order to have the option to claim fraud and get a refund from paypal?



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