When you are new to peer-to-peer lending and have questions about what P2P lending is, whether these investment platforms are safe and what the best peer-to-peer platform is, you can read more on this below. We also recommend to read our investment tips here.
In general, all the platforms we mention on this site are thoroughly checked and reviewed by us and can be considered safe. However, do keep in mind that as an universal rule: with investing comes risk. Be aware that past performance is no guarantee for future results.
Being aware of this, let’s get started.
What Is Peer-to-Peer (P2P) Lending?
Peer-to-peer (P2P) lending (commonly known as P2P investing) gives investors the opportunity to directly invest in loans from other individuals, where banks or other financial institutions are cutted out as the middleman. This works as follows:
- Consumer finance companies issue loans to their clients;
- The already issued loans are listed on a marketplace;
- Via a marketplace an investor can invest in these loans and earn profit.
P2P lending or investing is also known as crowd funding or social lending, ranging from investing in businesses, social projects or others.
Is Peer-to-Peer Lending Safe?
Peer-to-Peer lending is safe, but as with making any investment P2P lending involves a certain amount of risk. Mainly, three risks can be identified:
- The borrower defaults and is not able to pay back the loan;
- The loan originator goes bankrupt;
- The platform or marketplace goes out of business.
Armed with this knowledge, the question is whether how these risks are mitigated:
- Is there a buy back guarantee or any form of collateral, which ensures in case of default of the borrower you’ll get your money back?
- Only use trusted platforms and well performing loan originators with a solid track record, like the ones being mentioned on this website. Also, when reading the reviews you will get a proper insights in the risks involded and how to minimize them.
Lastly, as a general rule: with investing comes risk and be aware that past performance is no guarantee for future results. Be aware of this, read more on this in investment tips.
What Is The Best P2P Lending Or P2P Investment Site?
There are multiple P2P lending sites with very decent track records. For example, amongst others, these are EstateGuru, Lendermarket, VIAINVEST and Mintos. The best P2P sites can be found on our site here and are updated regularly.
How Much Does It Cost To Start P2P Lending?
Usually, to start with P2P lending there are no costs involved. The costs of maintenance of the platform or any other costs involved are being paid for by the marketplace or loan originator.
How Do I Invest In Peer-to-Peer?
Setting up an account and actually starting to invest in P2P is a rather easy thing to do. Firstly, set up an investment strategy to make sure you invest wisely. Secondly, gather information about the platforms you’d like to invest in, you can do so here. Lastly, if you have picked a particular platform you can read in the reviews here how to get started specifically.
Can You Make Money With Peer-to-Peer Lending?
Yes, you can make money with P2P lending. Annual returns on investment vary from 8 to 12%, depending on how you invest. Keep in mind though that with investing comes risk and be aware that past performance is no guarantee for future results.
How Do You Work?
We started this service because we wanted to create an overview so that you can make the best and safest investment possible. We are constantly working to make sure that you get all the relevant information to do so, as simple and straightforward as possible. This is at no cost to you, so totally free.
How Do We Make Money?
We are totally independent. We get a fee from referring when someone clicks through our website to one of the platforms we compare on the website. In any case, this does not affect our recommendations or comparisons. We are here to help you, no strings attached.
What Does It Mean When A Platform Is Not Listed?
Several reasons may come to mind why a platform is not listed. Firstly, the platform involved doesn’t meet our quality standards. This means essential information regarding projects or loans is not available or we find it to be insufficient to put a platform on our website. Secondly, there are hundreds of peer-to-peer platforms available. Assessing all those platforms based on our criteria is a rather time consuming business and we’d like to do our research properly. Eventually, this might also be a reason that a platform is not listed.
Can You Publish Poor Performing Platforms Also On The Website?
We choose not to. Again, we’d like to do our research properly and thoroughly. When information regard to a particular platform is not or partly available, we cannot properly assess the risks involved. This doesn’t necessarily mean that the platform involved should get a poor rating or bad review because of it. We assess the best platforms and if they do meet our standards, they will be listed.
How Did You Choose The Top 5 Platforms?
We regularly monitor and make changes to the listings in our Top 5 or platform oversight. There are multiple factors we take into account. Amongst others, we consider the risk/reward ratio, how a platform performs over time, volume of loans and how the platform is managed and by whom. If you think another platform should be in the Top 5, we’d be happy to hear from you.
Can I Get Financial Advice From You?
We do not give any personal financial advice, nor do we give any investment advice. The information provided is solely for information purposes, based on good faith. Do conduct your own due diligence and consult a professional financial advisor before making any investment decisions.
How Can I Contact You?
You can contact us via e-mail. Please use the form by clicking here and we will come back to you as soon as possible.