On this page you will find my P2P platform comparison. Since there are already 200+ different platforms in Europe alone, you will get a compact overview of the largest and most important providers that you should know as a private retail investor.
The pre-selection is based on personal criteria. Overall, the selection is divided into two tables, each of which is arranged alphabetically. The first table contains the top 10 P2P platforms that investors should currently consider first when making a choice where to invest. In the second table there is a selection of advanced platforms.
Please note that the P2P platform comparison presented is for guidance only and is not intended to be a recommendation for or against any P2P platform. Read more in the disclaimer.
Last update: 03.02.2025
Top 10 P2P Platforms in Europe
- Bondora: Estonia
- Crowdpear: Croatia
- Debitum Investments: Latvia
- Esketit: Ireland
- Income Marketplace: Estonia
- LANDE: Latvia
- Mintos: Latvia
- PeerBerry: Croatia
- Robocash: Croatia
- Viainvest: Latvia
- Bondora: 2008
- Crowdpear: 2021
- Debitum Investments: 2018
- Esketit: 2020
- Income Marketplace: 2020
- LANDE: 2019
- Mintos: 2015
- PeerBerry: 2017
- Robocash: 2017
- Viainvest: 2016
- Bondora: No
- Crowdpear: Yes (ECSP License)
- Debitum Investments: Yes (Financial and Capital Market Commission)
- Esketit: No
- Income Marketplace: No
- LANDE: Yes (ECSP License)
- Mintos: Yes (Financial and Capital Market Commission)
- PeerBerry: No
- Robocash: No
- Viainvest: Yes (Financial and Capital Market Commission)
Are the P2P platforms regulated and controlled by a supervisory authority? The decisive factor is the regulation as a platform, not the supervision of individual lenders of the platform.
- Bondora: Consumer Loans
- Crowdpear: Real Estate Loans
- Debitum Investments: Business Loans
- Esketit: Consumer Loans
- Income Marketplace: Consumer Loans
- LANDE: Agricultural Loans
- Mintos: Consumer Loans
- PeerBerry: Consumer Loans
- Robocash: Consumer Loans
- Viainvest: Consumer Loans
- Bondora: Yes
- Crowdpear: No
- Debitum Investments: Yes
- Esketit: Yes
- Income Marketplace: Yes
- LANDE: Yes
- Mintos: Yes
- PeerBerry: Yes
- Robocash: Yes
- Viainvest: Yes
- Bondora: 1 Euro
- Crowdpear: 100 Euro
- Debitum Investments: 50 Euro
- Esketit: 10 Euro
- Income Marketplace: 10 Euro
- LANDE: 50 Euro
- Mintos: 10 Euro
- PeerBerry: 10 Euro
- Robocash: 10 Euro
- Viainvest: 10 Euro
- Bondora: None
- Crowdpear: Mortgage
- Debitum Investments: Buyback Guarantee (90 Days)
- Esketit: Buyback Guarantee (60 Days)
- Income Marketplace: Buyback Guarantee (60 Days)
- LANDE: Land, Grain and Machinery
- Mintos: Buyback Guarantee (60 Days)
- PeerBerry: Buyback Guarantee (60 Days)
- Robocash: Buyback Guarantee (30 Days)
- Viainvest: Buyback Guarantee (60 Days)
- Bondora: Yes
- Crowdpear: Yes
- Debitum Investments: No
- Esketit: Yes
- Income Marketplace: No
- LANDE: Yes
- Mintos: Yes
- PeerBerry: No
- Robocash: Yes
- Viainvest: No
- Bondora: 1 Euro Withdrawal Fee at Bondora Go & Grow
- Crowdpear:
- Debitum Investments:
- Esketit:
- Income Marketplace:
- LANDE:
- Mintos: See Fee Structure
- PeerBerry:
- Robocash: See Fee Structure
- Viainvest: See Fee Structure
- Bondora: 6.75%
- Crowdpear: 10.62%
- Debitum Investments: Up to 15%
- Esketit: 13.25%
- Income Marketplace: 11.81%
- LANDE: Up to 14%
- Mintos: 12.7%
- PeerBerry: 12.5%
- Robocash: Up to 13.3%
- Viainvest: Up to 13%
The expected return refers to information provided by the P2P platform. These numbers do not display a guarantee to reach a certain return.
- Bondora: 5 Euro Bonus
- Crowdpear: 0.5% Cashback | 90 Days
- Debitum Investments: 1% Cashback | 30 Days
- Esketit: 0.5% Cashback | 90 Days
- Income Marketplace: 1% Cashback | 30 Days
- LANDE: 1% Cashback | 180 Days
- Mintos: 25 Euro Bonus (Until 28.02.2025)
- PeerBerry: 0.5% Cashback | 90 Days
- Robocash: 1% Cashback | 30 Days
- Viainvest: 1% Cashback | 90 Days
- Bondora: Bondora Review
- Crowdpear: Crowdpear Review
- Debitum Investments: Debitum Investments Review
- Esketit: Esketit Review
- Income Marketplace: Income Marketplace Review
- LANDE: LANDE Review
- Mintos: Mintos Review
- PeerBerry: PeerBerry Review
- Robocash: Robocash Review
- Viainvest: Viainvest Review
- Bondora: 3.30 out of 5 (#6)
- Crowdpear: 3.14 out of 5 (#11)
- Debitum Investments: 3.25 out of 5 (#8)
- Esketit: 3.42 out of 5 (#5)
- Income Marketplace: 3.23 out of 5 (#9)
- LANDE: 2.80 out of 5 (#15)
- Mintos: 3.28 out of 5 (#6)
- PeerBerry: 3.52 out of 5 (#4)
- Robocash: 3.66 out of 5 (#1)
- Viainvest: 3.55 out of 5 (#3)
Results refer to the Community Voting 2024.
Bondora
Bondora is one of the biggest and most experienced P2P lending platforms in Europe. Hence, the platform enjoys a special status and popularity among many retail investors. With the launch of Bondora Go & Grow in 2018, the platform established one of the most popular investment products in the P2P lending environment, which has set new standards in terms of simplicity, liquidity and reliability.
The long track record, coupled with strong financials, make Bondora an ideal starting point for new and less experienced investors who want to start out quickly and easily in the P2P lending space. Advanced investors will take the lack of transparency with the black box nature of Go & Grow into account, as well as the less competitive returns.
Find additional information in my Bondora Review / Bondora Go & Grow Review.
Crowdpear
With the launch of Crowdpear in 2023, investors are able to invest in a spin-off of by well-known P2P lending platform PeerBerry. Here, investors can access senior secured property and business loans from Lithuania that are offered with interest rates of up to 14%.
As Crowdpear is a crowdfunding platform regulated at EU level (ECSP licence), whose operational activities are monitored by the Central Bank of Lithuania, the platform’s legal framework is more stable and safe than that of many competitors. In addition, investors have not yet suffered any capital losses on the platform.
Find additional information in my Crowdpear Review.
Debitum Investments
Debitum Investments is a P2P platform based in Latvia, which is regulated by the local financial supervisory authority. What makes Debitum special is its unique positioning in the P2P lending environment, as it is regulated, follows a marketplace model and offers buyback-guaranteed business loans. A combination that cannot be found on any other P2P platform in this form.
The many changes and innovations since the change of ownership in August 2023 have significantly raised Debitum’s profile and attractiveness. New lenders, a bigger loan supply, competitive interest rates of up to 15% and higher liquidity make Debitum one of the most exciting P2P platforms in 2024. At the same time, the new shareholders have also to deal with legacy issues from the past, including the original ICO funding and the defaulted assets in Ukraine.
Find additional information in my Debitum Review.
Esketit
Esketit was founded in 2020 by the two former Avafin shareholders (formerly Creamfinance) as a cost-centre to finance the expansion into new lending markets. After the operational launch of the platform in 2021, Esketit has become one of the best and most popular P2P platforms in Europe. This is due to its high degree of transparency, reliable repayments, high liquidity and competitive interest rates. Esketit has therefore become a strong pillar in my P2P portfolio since 2022.
Due to the popularity of the platform, the loan supply is not always sufficient for all investors. Nevertheless, the platform’s performance and risk management are good reasons why Esketit should be a strong choice to consider for investors.
Find additional information in my Esketit Review.
Income Marketplace
In recent years, Income Marketplace has established itself as one of the best P2P lending platforms in Europe. This is supported by metrics such as active portfolio growth or the default rate, which is more than competitive at less than 1%.
This is primarily due to the good risk management of the Estonian platform, which sets itself apart from other competitors with new and innovative security features such as the junior share or the cash flow buffer. Although Income Marketplace can still improve in many areas, the platform is already one of the most appealing options for P2P investors in the current market environment.
Find additional information in my Income Marketplace Review.
LANDE
LANDE is a regulated crowdfunding platform based in Latvia. Given its positioning in the agricultural sector, the company is part of an exciting and rapidly growing niche. This not only offers great growth potential for the platform, but also creates real added value for investors in terms of diversification.
With interest rates of up to 12%, combined with collateralisation through machinery or agricultural land, LANDE offers an exciting and competitive profile. Anyone who is looking to add another platform to their P2P portfolio, outside the traditional consumer lending business, should definitely take a closer look at LANDE as a possible alternative.
Find additional information in my LANDE Review.
Mintos
With 600+ million euros in investor assets under management and more than 500,000 registered users, Mintos is the largest P2P lending platform in Europe. Therefore, the Latvian P2P marketplace enjoys a special status in the P2P market.
For years, Mintos’ vision was to establish itself as the leading marketplace for investing in loans. However, since receiving its European licence as an investment brokerage company in August 2021, Mintos has increasingly developed into a multi-asset platform that also offers products such as ETFs, bonds and real estate in addition to loans.
Find additional information in my Mintos Review.
PeerBerry
In recent years, PeerBerry has developed into one of the largest and most trustworthy P2P lending platforms in Europe. This is primarily due to the reliability of the P2P platform, which has emerged stronger from crisis situations like the pandemic or the war in Ukraine, than almost any other competitor.
The repayment of more than EUR 50 million in war-affected loans illustrates the high integrity of the partners who work with PeerBerry. Worth mentioning is the collaboration with the Aventus Group, which is the driving force behind the marketplace. The biggest shortcoming on the platform is the insufficient loan supply, which is not always matching the high demand from investors.
Find additional information in my PeerBerry Review.
Robocash
Robocash is a large, established and popular platform in the P2P lending environment. Its popularity is based on many factors: Competitive interest rates, high liquidity and great reliability in times of crisis. It is therefore not a surprise that in recent years, Robocash has been one of the most popular P2P platforms in the annual community votings.
A common problem of good platforms is providing a sufficient supply of loans to meet the demand of all investors. Nevertheless, Robocash is one of the best and easiest options for investors who want to start out in the P2P lending environment.
Find additional information in my Robocash Review.
Viainvest
With a track record since 2016, Viainvest is one of the more established platforms in the P2P lending environment. Due to an often more conservative and rather passive marketing approach, the P2P platform usually flies under the radar of many investors. This makes Viainvest, especially in good times, a reliable and calm investment choice.
No defaults, no repayment delays and competitive interest rates are the key reason why I have been able to consistently achieve double-digit returns on Viainvest since 2018. This consistency is hardly matched by any other P2P platform in the market.
Find additional information in my Viainvest Review.
Extended Selection of P2P Platforms
- Afranga: Bulgaria
- Bondster: Czech Republic
- Estateguru: Estonia
- Exporo: Germany
- Fintown: Czech Republic
- HeavyFinance: Lithuania
- iuvo Group: Estonia
- Lendermarket: Ireland
- Lonvest: Croatia
- Maclear: Switzerland
- Max Crowdfund: Netherlands
- Monefit SmartSaver: Estonia
- Monestro: Estonia
- Nectaro: Latvia
- NEO Finance: Lithuania
- Profitus: Lithuania
- Swaper: Estonia
- Twino: Latvia
- Afranga: 2021
- Bondster: 2017
- Estateguru: 2013
- Exporo: 2014
- Fintown: 2023
- HeavyFinance: 2019
- iuvo Group: 2016
- Lendermarket: 2019
- Lonvest: 2023
- Maclear: 2020
- Max Crowdfund: 2019
- Monefit SmartSaver: 2022
- Monestro: 2016
- Nectaro: 2023
- NEO Finance: 2015
- Profitus: 2018
- Swaper: 2016
- Twino: 2015
- Afranga: No
- Bondster: No
- Estateguru: Yes (ECSP License)
- Exporo: Yes (BaFin)
- Fintown: No
- HeavyFinance: Yes (ECSP License)
- iuvo Group: No
- Lendermarket: No
- Lonvest: No
- Maclear: Yes (Self Regulatory Organization)
- Max Crowdfund: Yes (Authority for Financial Markets)
- Monefit SmartSaver: No
- Monestro: No
- Nectaro: Yes (Financial and Capital Market Commission)
- NEO Finance: Yes (Central Bank of Lithuania)
- Profitus: Yes (Central Bank of Lithuania)
- Swaper: No
- Twino: Yes (Financial and Capital Market Commission)
- Afranga: Consumer Loans
- Bondster: Consumer Loans
- Estateguru: Real Estate Loans
- Exporo: Real Estate Loans
- Fintown: Real Estate Loans
- HeavyFinance: Agricultural Loans
- iuvo Group: Consumer Loans
- Lendermarket: Consumer Loans
- Lonvest: Consumer Loans
- Maclear: Business Loans
- Max Crowdfund: Real Estate Loans
- Monefit SmartSaver: Consumer Loans
- Monestro: Consumer Loans
- Nectaro: Consumer Loans
- NEO Finance: Consumer Loans
- Profitus: Real Estate Loans
- Swaper: Consumer Loans
- Twino: Consumer Loans
- Afranga: Yes
- Bondster: Yes
- Estateguru: Yes
- Exporo: No
- Fintown: No
- HeavyFinance: Yes
- iuvo Group: Yes
- Lendermarket: Yes
- Lonvest: Yes
- Maclear: No
- Max Crowdfund: No
- Monefit SmartSaver: Yes
- Monestro: Yes
- Nectaro: No
- NEO Finance: Yes
- Profitus: Yes
- Swaper: Yes
- Twino: Yes
- Afranga: 10 Euro
- Bondster: 5 Euro
- Estateguru: 50 Euro
- Exporo: 500 Euro
- Fintown: 1 Euro
- HeavyFinance: 100 Euro
- iuvo Group: 10 Euro
- Lendermarket: 10 Euro
- Lonvest: 10 Euro
- Maclear: 50 Euro
- Max Crowdfund: 100 Euro
- Monefit SmartSaver: 10 Euro
- Monestro: 10 Euro
- Nectaro: 10 Euro
- NEO Finance: 10 Euro
- Profitus: 100 Euro
- Swaper: 10 Euro
- Twino: 10 Euro
- Afranga: Buyback Guarantee (60 Days)
- Bondster: Buyback Guarantee (30 to 60 Days)
- Estateguru: Mortgage
- Exporo: Mortgage
- Fintown: Corporate Guarantee Vihorev Group
- HeavyFinance: Land and Machinery
- iuvo Group: Buyback Guarantee (60 Days)
- Lendermarket: Buyback Guarantee (60 Days)
- Lonvest: Buyback Guarantee (60 Days)
- Maclear: Mortgage
- Max Crowdfund: Mortgage
- Monefit SmartSaver: None
- Monestro: Buyback Guarantee (60 Days)
- Nectaro: Buyback Guarantee (60 Days)
- NEO Finance: Provision Fund
- Profitus: Mortgage
- Swaper: Buyback Guarantee (60 Days)
- Twino: Buyback Guarantee (60 Days)
- Afranga: Yes
- Bondster: No
- Estateguru: Yes
- Exporo: No
- Fintown: No
- HeavyFinance: Yes
- iuvo Group: Yes
- Lendermarket: No
- Lonvest: No
- Maclear: No
- Max Crowdfund: No
- Monefit SmartSaver: No
- Monestro: No
- Nectaro: No
- NEO Finance: Yes
- Profitus: Yes
- Swaper: No
- Twino: Yes
- Afranga:
- Bondster: See Fee Structure
- Estateguru: See Fee Structure
- Exporo:
- Fintown: See Fee Structure
- HeavyFinance: See Fee Structure
- iuvo Group: 1% Transaction Fee Secondary Market
- Lendermarket:
- Lonvest:
- Maclear:
- Max Crowdfund:
- Monefit SmartSaver:
- Monestro: See Fee Structure
- Nectaro:
- NEO Finance: See Fee Structure
- Profitus: See Fee Structure
- Swaper: See Fee Structure
- Twino: See Fee Structure
- Afranga: Up to 18%
- Bondster: 13.5%
- Estateguru: 10.76%
- Exporo: 4% to 6%
- Fintown: Up to 15%
- HeavyFinance: 13.13%
- iuvo Group: Up to 15%
- Lendermarket: Up to 17%
- Lonvest: Up to 13.5%
- Maclear: Up to 14.9%
- Max Crowdfund: 10%
- Monefit SmartSaver: Up to 9.88%
- Monestro: Up to 13%
- Nectaro: Up to 14%
- NEO Finance: 14.49%
- Profitus: 10%
- Swaper: Up to 16%
- Twino: 12%
The expected return refers to information provided by the P2P platform. These numbers do not display a guarantee to reach a certain return.
- Afranga:
- Bondster: 1% Cashback | 90 Days
- Estateguru: 0.5% Cashback | 90 Days
- Exporo: No
- Fintown: 2% Cashback (First Investment)
- HeavyFinance: 2% Cashback | 30 Days
- iuvo Group:
- Lendermarket: 2% Cashback | 60 Days
- Lonvest: 1% Cashback | 90 Days
- Maclear: 1,5% Cashback | 90 Days
- Max Crowdfund: 0.5% Cashback | 90 Days
- Monefit SmartSaver: 5 Euro Bonus + 0.25% Cashback | 90 Days
- Monestro:
- Nectaro: Up to 1.5% Cashback | 21 Days
- NEO Finance: 1% Cashback | 90 Days
- Profitus: 25 Euro Bonus (Code “2024RETHINKP2P25“)
- Swaper: No
- Twino: 20 Euro Bonus (100 Euro Investment)
- Afranga:
- Bondster: Bondster Review
- Estateguru: Estateguru Review
- Exporo:
- Fintown: Fintown Review
- HeavyFinance: HeavyFinance Review
- iuvo Group:
- Lendermarket: Lendermarket Review
- Lonvest: Lonvest Review
- Maclear: Maclear Review
- Max Crowdfund:
- Monefit SmartSaver: Monefit SmartSaver Review
- Monestro: Monestro Review
- Nectaro:
- NEO Finance: NEO Finance Review
- Profitus: Profitus Review
- Swaper:
- Twino: Twino Review
- Afranga: 2.54 out of 5 (#18)
- Bondster: 1.92 out of 5 (#25)
- Estateguru: 2.23 out of 5 (#21)
- Exporo:
- Fintown: 2,89 out of 5 (#14)
- HeavyFinance: 2.72 out of 5 (#16)
- iuvo Group: 2.39 out of 5 (#19)
- Lendermarket: 1.94 out of 5 (#24)
- Lonvest:
- Maclear: 2.36 out of 5 (#20)
- Max Crowdfund: 1.44 out of 5 (#30)
- Monefit SmartSaver: 3.02 out of 5 (#13)
- Monestro:
- Nectaro:
- NEO Finance: 1.77 out of 5 (#26)
- Profitus: 3.64 out of 5 (#2)
- Swaper: 3.06 out of 5 (#12)
- Twino: 3.21 out of 5 (#10)
Results refer to Community Voting 2024.
P2P Platform Comparison
The P2P platform comparison is designed to guide investors in understanding how individual platforms differ and what factors to consider when selecting one. To achieve this, the re:think P2P website employs a range of criteria to assess platforms across various aspects.
Below is an excerpt of these criteria, which serve as the foundation for the P2P platform comparison.
Transparency
Accessing crucial information is essential for investors to make informed investment decisions and accurately evaluate the risk profile of a P2P platform.
But beware: many platforms take advantage of inexperienced investors by primarily sharing information that lacks real value regarding the risk profile and actual performance of the platform.
Therefore, it is vital to distinguish between important and irrelevant information. Good and transparent P2P platforms typically provide a statistics page that includes the following information and data points:
- Managed investor assets / Outstanding portfolio
- Performance of the outstanding loan portfolio
- Total financed loan volume
- Average interest rate
For investors, the managed portfolio and its performance should be of primary importance. Here’s why:
The size of the outstanding portfolio provides valuable information into the platform’s demand trends and growth trajectory. A declining portfolio often signals that the platform is either failing to supply enough loan volume – leading to cash drag, reduced returns, and diminished investor satisfaction – or experiencing lower investor demand, which is often linked to underlying platform issues.
On the other hand, the performance of the loan portfolio is a critical factor in assessing the likelihood of achieving the advertised returns. An increasing number of loan defaults raises the risk of investors facing capital losses and reduced returns.
Safety
The safety of a P2P platform is a critical factor in evaluating its risk and return potential. Investment protection can occur at various levels.
Regulation: P2P lending platforms regulated in Latvia must comply with the requirements of the Markets in Financial Instruments Directive (MiFID II). This regulation ensures that investors’ accounts are protected by Latvia’s investor compensation system, providing coverage of up to EUR 20,000 in the event of platform insolvency or misappropriation of investor funds. However, it is important to note that lender defaults are not covered by this protection.
This distinction is crucial when considering regulation. While the likelihood of scams on regulated P2P platforms is significantly reduced due to higher costs and stricter compliance requirements, regulation does not guarantee that investors will avoid losses entirely.
Risk Management: Risk management is the process by which the financial performance of a lender and its portfolio quality are analysed by a P2P marketplace. In contrast, traditional P2P lending platforms focus primarily on assessing the creditworthiness of borrowers.
Since each platform employs a unique scoring model for risk assessment, it is essential to evaluate each approach in detail. Long-term monitoring of portfolio quality serves as a reliable indicator of how effectively a platform’s risk management system operates.
Fraud Prevention: The threat of cybercrime has grown in recent years, particularly with the rapid advancement of AI technology. Platforms that recognize this risk and implement robust account verification features – such as two-factor authentication (2FA) – demonstrate a higher level of awareness and commitment to security.
Financial Stability
Audited financial statements provide investors with valuable insights into the financial stability of a P2P platform, making them a crucial KPI for evaluating a platform’s safety. When assessing financial stability, the following levels can be considered:
- No Annual Report
- Annual Report
- Annual Report, Audited
- Annual Report, Audited, Profitable
The annual financial report should be prepared by a reputable auditor to provide a reliable indication of the platform’s financial performance.
The importance of profitability must be assessed on a case-by-case basis. For some platforms, profitability is crucial for sustaining their business operations. However, other P2P platforms operate as part of a larger group or parent company, functioning primarily as a cost centre to support their lending activities. For these platforms, direct profitability is of secondary importance.
Liquidity
The liquidity indicates how quickly investors can withdraw their money from a P2P lending platform. Here are a few aspects that can influence liquidity.
- Loan Terms: Short-term consumer loans, commonly referred to as payday loans, typically have terms ranging from 30 to 90 days. In such cases, liquidity is considered very high.
- Secondary Market: The secondary market allows investors to sell loans before the original loan term ends. However, not all platforms offer this feature. Additionally, the ability to sell loans before maturity depends on investor demand and is often only possible at a discount.
- Investment Product: Some platforms offer investment products specifically designed to enhance liquidity. Products like Bondora Go & Grow or Mintos Smart Cash, for example, market themselves with the promise of daily accessibility to funds.
In general, investors should carefully consider their investment horizon before making a commitment. Typically, a higher liquidity also provides more flexibility, allowing investors to respond more quickly to market changes.
Management
The business development of a P2P platform is heavily influenced by the decisions made by its management and shareholders. In this regard, expertise and experience play a crucial role.
Hence, anyone entrusting their money to a P2P lending platform should include the individuals behind the platform in their due diligence process as well.
Have the shareholders previously founded and successfully established profitable lending businesses? Do the management executives possess sufficient or comparable experience from prior roles?
The more extensive the track record is and the better the reputation of those involved, the more trustworthy the P2Pplatform can be considered. For this reason, the reviews on re:think P2P always disclose shareholder structures and identify key figures in management.
Communication and Support
P2P lending operates within a dynamic environment, with constant developments. This makes active communication from the platforms increasingly important, whether through newsletters, in-house blogs, Telegram groups, podcasts, or direct support via email.
The more committed a P2P platform is to processing inquiries and fostering open dialogue with investors, the more positively this can be viewed.
How P2P Lending Platforms Work
P2P platforms are digital intermediaries from the fintech sector that connect loan supply with investor demand.
These platforms operate in two directions:
- Attracting funds from investors: Platforms must attract funds from investors to finance the loans. To do so, many P2P platforms promote their company with high returns, bonus campaigns, or collateral options in case of payment defaults.
- Offering a range of loans: At the same time, P2P platforms must ensure a sufficient loan supply as well. The lenders may be directly affiliated to the P2P platform (classic P2P lending) or external lenders with no direct association with the platform (P2P marketplace model). Depending on the business model, the P2P platform may handle borrower acquisition itself or monitor the portfolio quality of external lenders.
Ultimately, P2P platforms bring together investors’ capital and the loan offerings, enabling the system to function seamlessly.
Expected Returns in P2P Lending
The expected returns from P2P lending can vary significantly, as they depend on several factors:
- Interest Rate: One of the most crucial factors is the interest rate itself, which can differ greatly between platforms. For example, interest rates may depend on investor demand or the market environment of individual lenders. Additionally, the level of collateralization for different loan types can influence the interest rate as well.
- Bonuses: P2P platforms often run bonus campaigns to attract new capital, which can boost overall returns. At the same time, new investors are frequently offered bonuses or cashback deals as well when registering on a platform. Current bonus offers can be found on my bonus page.
- Performance: Beyond the interest rate, the performance of the loan portfolio has a significant impact on the overall return. A higher amount of defaulted loans or unrecoverable debts can substantially reduce the expected return.
To provide a better picture of the actual returns achievable from P2P investments, the following section lists the P2P platforms that I have consistently invested in during 2023.
As a result, I achieved double-digit returns on five P2P platforms, with Income Marketplace leading the way at 13.78%. On three other platforms, however, the returns ranged between 6.75% (Bondora Go & Grow) and 4.49% (Estateguru).
It is important to note that results can vary significantly between platforms and from year to year.
Advantages and Disadvantages of P2P Lending
Investing in P2P lending can have certain advantages and disadvantages. Here are some of them.
Advantages
- High Liquidity: P2P lending offers flexibility for investors in withdrawing their funds. This is facilitated through short-term consumer loans, the use of a secondary market, or special investment products that provide immediate liquidity.
- Low Entry Barrier: P2P lending has a low entry barrier, enabling investors to get started quickly and easily.
- Diversified Portfolio: Alongside asset classes like real estate, stocks, funds, and commodities, P2P lending provides an additional option for diversifying an investment portfolio.
- Automated Investing: Most P2P platforms feature automated systems that efficiently deploy funds on behalf of investors.
- Regular Cash Flow: P2P lending offers income-oriented investors a dependable way to generate regular cash flow from their investments.
Disadvantages
- High-Risk Investment: Many P2P platforms are insufficiently regulated and monitored, which has led to cases of scams and attempted fraud in the past. Even on seemingly “clean” platforms, poor risk management can result in losses for investors.
- Leveraged Loans: P2P loans are essentially investments in pre-financed loans. While leveraging can enhance returns on equity for lenders, it also increases the risk of insolvency if portfolio quality deteriorates or liquidity becomes insufficient.
- Active Investment: Although automated investing is a key benefit of P2P lending, the asset class is not entirely passive. The dynamic nature of P2P platforms means the risk profile can shift quickly, requiring investors to stay actively involved to manage their investments effectively.
Risks of P2P Lending
There are a variety of risks that can arise in the context of an investment in P2P lending. These affect either the P2P platform directly (platform risk) or its lenders (lender risk).
At both levels, there are corresponding economic risks as well as the associated market risks of the lending business. These include risk factors such as country risk, interest rate risk, liquidity risk or exchange rate risk.
Default Risk
The return to be achieved on a P2P lending platform is largely determined by the performance of the loan portfolio. In this regard, the loan default risk plays an important role in the valuation of a platform.
A default occurs when the borrower exceeds a certain period of time, usually 60 or 90 days, during which no repayments have been made in accordance with the repayment schedule.
However, a loan default does not mean that the money invested by investors is automatically lost. It is possible to recover all or part of the outstanding receivables through the debt collection process carried out after the loan default.
It is not possible to make a generalised statement about how high the default rates are for individual P2P lending platforms. The decisive factor here is the transparency of the respective platform and how openly it communicates the performance of the loan portfolio. Investors should therefore closely monitor which information a platform does or does not publish regarding the loan default risk.
Incorrectly Assessed Creditworthiness
Most lenders have a systematic evaluation process in place to assess the creditworthiness of borrowers. Depending on the credit segment, there can be significant differences. The creditworthiness of a private individual who wants to take a short-term and unsecured consumer loan of up to EUR 1,000 usually differs significantly from that of an agricultural business that wants to buy new machinery for EUR 100,000.
How well or poorly a lender has done its homework when checking creditworthiness can be seen from the NPLs (non-performing loans), which are usually published in the annual financial statements. These are non-performing loans that are very unlikely to be recovered and therefore have to be written off.
What Happens in the Event of a Payment Default?
If a payment default occurs, the P2P platforms attempt to recover the money as part of a debt collection process. As there are different types of loans, the security and recovery mechanisms are quite different.
In the case of consumer loans, many lenders are liable for investors in form of a buyback guarantee, whereby loan defaults are repaid out of their own pockets. The prerequisites for this are the economic conditions.
In the case of mortgage-backed loans, such as property, it depends on the proceeds from the sale of the collateral how much money investors will get back in the end.
With other platforms, on the other hand, there is no protection, which is why investors have to bear the default risk directly.
Insolvency or Closure of a P2P Platform
Another risk associated with P2P loans is insolvency, i.e. the inability of a platform to pay. Most P2P marketplaces are usually asset managers who receive a commission for their brokerage activities depending on the loans financed.
In this respect, investors should familiarise themselves with the business models of the individual P2P lending platforms and their financial situation. The audited annual financial statements, if they are published, provide valuable insights into this.
Buyback Guarantee in P2P Lending
A few years ago, Mintos established the so-called Buyback Guarantee (also known as Buyback Obligation) on its P2P marketplace. This concept, which aims to eliminate the supposed default risk for investors, was subsequently adapted by many P2P platforms. Today, it is one of the key security features of lenders who finance unsecured consumer loans.
How the Buyback Guarantee Works
The way the buy-back guarantee works is relatively simple: As soon as the loan is in delay for a certain period of time, the issuer (the lender) undertakes to buy back the receivable from the investor. As a rule, this period is 60 days. With some P2P platforms, however, the repurchase obligation period is 30 or 90 days.
In addition to the outstanding repayment, the accrued interest is usually also reimbursed.
Which P2P Platforms Offer a Buyback Guarantee?
The buyback guarantee can be found on many P2P platforms where lenders offer unsecured consumer loans. These include lenders on Mintos, Esketit, PeerBerry or Income Marketplace. P2P platforms that offer collateral for the loans (mortgages, land, machinery, etc.) generally do not have any form of buyback guarantee.
When Does the Buyback Guarantee Kick In?
The timing of the buyback obligation varies greatly from one P2P platform to another. With Swaper or Robocash, the buyback is supposed to take place after 30 days. With Mintos, PeerBerry, Esketit or Income Marketplace, on the other hand, it is 60 days. The longest buyback period has Debitum with 90 days.
Advantages and Disadvantages of the Buyback Guarantee
The major advantage of the buy-back guarantee is that the supposed default risk of the loan is eliminated. This gives investors reliable repayments and a predictable cash flow. Provided, of course, that the buy-back guarantee is honoured.
The disadvantage of the buy-back guarantee is that investors may be blinded by a “false sense of security”. This is because honouring the buyback guarantee, which is promised by the lender itself, is only as secure as the payment morale of the issuer itself. If the issuer has financial problems, the shift in default risk will fall back on the investor.
FAQ P2P Platform Comparison
The P2P platform comparison offers investors the possibility to directly compare the different providers. Several criteria have been used to provide comprehensive information about the individual P2P platforms.
The P2P platforms comparison includes two lists of different platforms each. The first list contains the top 10 P2P platforms that investors should consider first. These include companies such as Bondora, Estateguru or PeerBerry. The second list includes an extended version with further P2P platforms that can be considered.
On my blog you will always find new content with detailed analyses of the most important P2P platforms. In addition, the blog also contains high-quality reviews of individual P2P platforms.
The returns on P2P platforms can vary greatly depending on the platform. Usually, the average range is between 8% and 14%. Experience shows that investors can expect a realistic return of between 6% and 10% after deducting possible defaults.