Invest in P2P loans

A Step-by-Step Beginner’s Guide to P2P Lending | How to earn +10% per year

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In this comprehensive guide, you will learn how to create passive income with P2P lending and earn annual returns of more than 10%.

Why P2P Lending?

Learning about stocks and cryptocurrencies takes time and dedication. Fund managers don’t know where to invest and savings accounts don’t offer any interest nowadays. Each year users who store their money in their bank accounts lose 2% due to the annual inflation rate. Investing in P2P lending is one possible option that helps increase your investment by at least 10% per year if done in the right way.

If you are completely new to P2P lending, here is a short video where I teach you all the basics in less than 4 minutes.

Let’s give you a few pros and cons, so you can see right away if P2P lending is the right fit for you.


Pros and Cons with P2P Lending

Here are some of the reasons why you should consider investing in P2P loans:


  • Higher return compared to savings accounts
  • You can decide how long you want to tie-up your investment
  • Auto Invest will help to diversify your portfolio without any time investment
  • All loan applications on P2P platforms are thoroughly reviewed
  • Wide diversification opportunities
  • Small correlation to the stock market

You should, however, be aware that all investments come with a risk


  • Higher risk as your investment isn’t protected by the EU protection scheme
  • Your investment is not always secured by collateral
  • Information about loan originators is often hard to find
  • It’s hard to predict the borrower’s willingness to pay debt abroad
  • It is not easy to evaluate the trust of a P2P platform
  • Many P2P lending platforms are not yet available in all languages


How does P2P lending work?

In case you skipped my video, here is a short description of how P2P lending works.

Peer-to-Peer lending allows investors to invest their money on platforms that lend their money to borrowers. The borrowers pay back the loan (P2P loan) with an additional interest that will be credited to the investor’s account.

This is a very simplified definition of P2P investing. Every P2P platform has a slightly different setup. Overall the P2P platform helps to connect investors that want to invest their money with people that want to lend money.

The loans are funded through the crowd of investors compared to the traditional setup where banks provide the financing.

P2P lending


How to invest in P2P loans

Investing in P2P loans isn’t difficult. With most P2P lending platforms, you can set up an investor account within minutes and deposit the money within a few hours. Before you do so, I highly recommend to educate yourself about the risks connected to P2P lending.

I wrote an extensive article about this exact topic which you can read here. Apart from being aware of the risks, you should follow the following three points in order to maximize the return and minimize the risks.


1. Define your financial goals

As with any investment, you should know why you want to invest in P2P lending and what kind of role does P2P lending play within your investment portfolio. Try to find answers to the following questions.

How long do you want to invest?
How fast do you want to access your investment?
What is your expected return?
How much % of your money do you want to invest in P2P lending?
Why do you invest in P2P lending in the first place?

This helps to define, which platform is the right fit for you. Some platforms allow you to withdraw your investments within hours, others might lock your investment for several months.

Having the answers to the above-mentioned questions will certainly make your P2P lending strategy more clear.


2. Evaluate your risk profile

Evaluating your risk profile is one of the most important points – regardless if you invest in stocks, ETFs or P2P loans.

Be aware that P2P lending is connected to certain risks and that you might lose some or all of your money.

When you deposit your money to the P2P platform, you might feel to urge to check your portfolio every day to see if any loans are delayed. In some time you should learn that this isn’t bringing you any value. P2P lending is a great way to earn passive income – don’t treat it as day trading.

Loans will be delayed, some might even default. That’s why you should also invest in property-backed loans or loans that come with a buyback guarantee. Find out more about the buyback guarantee here.


3. Choose the right platform

Last but not least you want to invest in a trustworthy platform, that protects your investments and generates the expected returns. There are a few things you should be looking at when choosing the right P2P platform.

Past performance – Statistics

Have a look at the platform’s performance. What’s the average interest, how many investors are active, how many loans were funded etc. Statistics will give you a good idea of the platform’s performance.

Platform Reviews

I highly encourage you to read platform reviews by investors who actually tested them and invested the money themselves. I have invested over €20.000 in various platforms. Read my unbiased reviews and get yourself a sign-up bonus before you register.

–> Mintos Review
–> EstateGuru Review
–> PeerBerry Review
–> Robocash Review
–> Crowdestor Review


Every platform operates in a different way. Some do collaborate directly with borrowers, while others list loans of various loan originators. Some of the platforms even offer a buyback guarantee. Make sure you understand the risks of the platform you invest in.

Features and Usability

Based on your financial goals you should pick a platform that allows you to reach them. A secondary market allows you to sell your claim and withdraw money faster than anticipated.

Some platforms go even beyond this and offer tools that allow you to withdraw money instantly. Make sure to do your research and pick a platform that is aligned with your expectations.

Diversification options

Some platforms allow you to diversify across several countries and loan types, why others are focused on a specific region or loan type.

The more diversification options you have, the lower the risk of default. Investors who plan to invest a larger sum of money in P2P lending should consider investing on various platforms. You can find most of the European P2P lending sites in my comparison.


If your goal is to invest in property-backed real-estate loans or business loans, you shouldn’t expect to be able to withdraw your money that fast. If liquidity is a priority of yours, I would look into short-term or personal loans listed on platforms like Mintos, PeerBerry or Robocash.


Best P2P lending platforms

Here is my personal list of best P2P lending platforms for investors in 2019. I have been investing on all of the platforms for 6 to 24 months and I have never lost any money.

Without further ado, here are my favorite platforms:

P2P Platform Loan Types
PeerBerry short-term
EstateGuru real-estate
Mintos short-term, personal, real-estate, business
Crowdestor business
Robocash short-term

1. PeerBerry

Average Interest 11.54%
Buyback Guarantee
Medium Liquidity
Invest from €10
Pros Cons
No cash drag
Auto Invest
Limited Diversification
No Secondary Market

2. EstateGuru

Average Interest 12%
Secured by Property
Medium Liquidity
Invest from €50
Pros Cons
Secondary Market
Property Secured Loans
Limited Diversification
Not suitable for short-term investors

3. Mintos

Buyback Guarantee
Secondary Market
Mintos Auto Invest
Broad Diversification Options
Pros Cons
Good Diversification
Innovative Features
Cash Drag
Some loan originators don’t pay interest for delayed loans

4. Crowdestor

Average Interest 15.52%
Secured with collateral
Low Liquidity
Invest from €50
Pros Cons
Secured investments
High returns
Limited Diversification
Lack of Transparency

6. Robocash

Average Interest 12%
30 Buyback Guarantee
High Liquidity
Invest from €10
Pros Cons
High Liquidity
Auto Invest
Limited Diversification
Cash Drag


If you want to compare more platforms, here you will find a list of the most popular European P2P sites.


FAQ about P2P Lending

Should I invest in P2P lending?

Is P2P lending a good investment?

P2P investments should be a part of your investment portfolio. How much money you invest in P2P loans depends on your financial situation. P2P lending offers good investment opportunities for short- to medium-term investors.

Why would people take a loan from a platform and not a bank?

In many countries, banks aren’t as quick and user-friendly when it comes to lending money. Loan originators fill this gap and offer loans, financed via P2P platforms.

Who is in charge of the credit check?

Mintos allows you to exchange currencies or invest in foreign currencies. There are no hidden fees and you can see right away how much money you get.

5. Auto Invest

Where do you invest your money into?

You can choose to invest in various loans. It is recommended to have a diversified portfolio, consisting of business loans, real-estate loans, personal loans, and short-term loans.


Terms you should know

Here are a few terms that will make your start with P2P lending much easier.

Investment Account

The investment account is your user’s account that you create when registering on a P2P platform. In your investment account, you will find a dashboard with basic information about your P2P portfolio as well as its performance. It also serves as an account to deposit your funds and receive your loan- and interest payments.

Auto Invest

Auto Invest is a tool, provided by most of the P2P platforms, that allows you to automate your investments. This time-saving application enables you to invest automatically based on your preferences.

Minimum Investment Amount

The minimum investment amount is the minimum amount of money you need to invest in one loan on a particular platform. This amount varies depending on the P2P platform.


Diversification is the process of allocating your investment in a way that lowers the risk of a loss. In the P2P lending niche, this term defines the diversification options that you can use when investing on a particular platform.

When you invest in P2P you can diversify your funds based on country, loan originator, currency, loan amount, loan period, type of loan, buyback guarantee, etc.

Buyback Guarantee

The buyback guarantee is a promise from the loan originator (or the P2P platform) to buy back your investment in case the borrower is late with the loan payments.

Investing in loans with buyback guarantee can be used as an additional strategy to lower the risk of your investment. Find out more about it here.

Loan Originators

Loan originators are the middleman between the P2P platform and the borrower (consumer). Before a loan originator can apply to list their loans on a platform, they need to fulfill certain financial criteria.

The P2P platform always does its due diligence before accepting a loan originator.

Platforms such as Mintos even rate their loan originators from A to C which can be used as some kind of key indicator when deciding in what loans to invest.

Interest Rate

The interest rate represents the expected annual returns that you will receive for your investment. The interest rate can also be used as a benchmark on the risk connected to the investment. Loans with higher interests are considered to be higher risk.


The loan-to-value (LTV) ratio is representing the ratio of a loan to the value of an asset purchased. Let’s say you want to borrow € 100.000 to purchase a house worth € 150.000.
LTV is 66% (100.000/150.000). This metric is used when taking mortgages for real estate investments. It helps to give you an idea of how much of the value of the object is financed by a loan. The higher the ratio the higher the risk.

Secondary Market

Most of the investments are done on the primary market. The secondary market gives you the option to resell your investment in P2P loans in case you want to withdraw the money from the platform before the loan period expires and the loan will be paid back.


Let’s get started with P2P lending

P2P lending isn’t hard to understand, I am an active investor since 2017 and I have written dozens of articles that will help you invest in the right platform while minimizing the risks.

Use the resources on my blog to learn more about P2P lending. If you have any questions, simply leave your comment on one of the posts and I am happy to help.

If there is one advice I can give you, it is to start small and diversify your portfolio. Get familiar with one platform before expanding and investing on multiple platforms.



  1. Melissa Giroux June 27, 2019 at 2:09 pm

    Excellent Guide about P2P Lending! I have read your reviews and now I am invested in EstateGuru and Mintos. This is a great way to create passive income. Thank you for your help.

    1. Jakub June 27, 2019 at 2:19 pm

      Thank you Melissa :) hope it will help you to achieve your financial goals

  2. Angie July 1, 2019 at 5:07 pm

    Thanks much for the detailed explanation! I signed up to invest some money on P2P platforms a few months ago – so far all good :)

    1. Jakub July 6, 2019 at 2:36 am

      That’s amazing Angie. Glad it could help you out :)

  3. Wolf Bogaert August 16, 2019 at 2:09 pm

    Great stuff as always buddy! Thank you for sharing!

    1. Jakub August 16, 2019 at 6:04 pm

      Thanks, you are welcome ;)

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