If you clicked on this post, you might be already familiar with P2P lending and the idea behind it.
In this article, I will introduce you to six of my preferred P2P lending platforms from Europe that I am currently investing in. If you are looking to find the best P2P lending sites in Europe, this post might be relevant to you.
Best P2P lending sites in Europe
There are more than 40 P2P lending companies in Europe. To find out which one is the best is not an easy task. It demands months of testing and at the end of the day, it all comes down to your personal preferences.
Most of the popular lending platforms in Europe are based in Baltic countries such as Latvia and Estonia. It’s mainly due to the suitable legislative environment for P2P lending platforms.
When it comes to choosing a P2P platform I have a look at the following aspects:
- Reputation on Social Media
- Transparency (content about P2P lending, information about the buyback guarantee and securities, financial reports)
- Loan types and other means that support the diversification of your portfolio
- Average returns (I aim to go above 10% p.a.)
- Default rates (if any)
- Supply of investment opportunities (amount of loans)
- The functionality of the P2P lending platform (user experience, features such as auto invest or secondary market)
- PR and Customer Support (send an email to the P2P lending platform and evaluate the response)
These are just the very basics that I tend to look at when evaluating platforms. Most of the time, I evaluate much more information and decide for myself whether it is worth the risk to invest on this platform compared to the potential returns.
Quite obvious right? Well not for everyone.
Do not invest your money into anything if you are not familiar with the asset class and the risks connected to it.
Let’s have a look at the six European Peer-to-Peer lending platforms that I personally invest in (update May 2020 - I have no currently active investments on Robocash) and where I have not had any defaulted loan since I started investing in P2P loans in 2017.
Note that the P2P lending space is changing rapidly. The market isn't as stable as it was in 2019. Before investing any capital, I strongly suggest to do your own due diligence which is beyond the scope of this article.
Minimum investment amount: €10
Loan types: 9
Countries: 33
Loan originators: 70
Currencies: 12
Interest Rate: 5% - 18%
Loan Period: 1 - 60 months
Auto Invest: YES
Buyback Guarantee: YES
Mintos is one of the largest P2P lending sites in Europe. It offers by far the best diversification options and one of the most user-friendly investment platform for P2P investors.
Investors can choose from a variety of investment features that will help them to diversify their portfolio across all verticals based on own preferences. The European P2P lending platform is suitable for beginners as well as more experienced P2P investors.
There are, however, a few drawbacks with Mintos related to the way Mintos changes their terms and conditions which usually has a less positive impact for investors. Also the monitoring of Mintos' loan originators shows that Mintos could do a better job.
Minimum investment amount: €10
Loan types: 2
Countries: 6
Loan originators: 17
Currencies: 1
Interest Rate: 11% - 13%
Loan Period: 2 days to 4 years
Auto Invest: YES
Buyback Guarantee: YES
Peerberry is a Latvian P2P lending platform with a focus on short-term loans for a maximum duration period of 30 days.
The user experience on Peerberry is very good. It is by far not as advanced as on Mintos but it offers everything a passive investor needs, including improved statistics.
You will find an easy Auto Invest feature that allows you to diversify and reinvest your capital without keeping track of loan listings. Additionally, you have a buyback guarantee which activates as soon as the borrower is late with its payments for more than 60 days.
I have been using Peerberry since 2017 and over the years, PeerBerry became my primary P2P platform.
Minimum investment amount: €50
Loan types: 7
Countries: 7 (usually only 3 available)
Loan originators: 1 (the P2P platform itself)
Currencies: 1
Interest Rate: 9% - 13%
Loan Period: 6 - 24 months
Auto Invest: YES
Buyback Guarantee: NO
EstateGuru is an Estonian P2P lending platform that lists secured business loans mostly from Latvia, Estonia, and Lithuania.
There is no buyback guarantee as we are used from platforms such as Mintos and Peerberry who mainly list personal and short-term loans.
EstateGuru is a suitable alternative for every investor who wants to be a part of the real estate business but can’t afford to invest a huge amount of capital.
EstateGuru has improved a lot in the last few months. The availability of real estate projects is improving, so is the transparency of the platform. I am still very active on EstateGuru and it is one of the platforms that I trust the most at the moment.
Minimum investment amount: €10
Loan types: 1
Countries: 5
Loan originators: 6
Currencies: 1
Interest Rate: 12% - 15%
Loan Period: 1 - 180 days
Auto Invest: YES
Buyback Guarantee: YES
Robocash is a Croatian P2P lending platform that lists mainly short-term loans from Eastern European countries.
The buyback guarantee from Robocash activates as soon as the borrower is late with its payments for more than 30 days.
For most other P2P platforms the buyback option activates after 60 days of overdue payments.
I have exited my investments by the end of 2019 as my portfolio on Robocash suffered from cash drag. I might resume investing in the future. Always check the availability of loans on any platform before signing up.
Minimum investment amount: €50
Loan types: 2
Countries: 1
Loan originators: 1 (the P2P platform itself)
Currencies: 1
Interest Rate: 14% - 21%
Loan Period: 3 - 24 months
Auto Invest: NO
Buyback Guarantee: NO
Crowdestor is a rather small P2P lending platform from Estonia that lists secured business and real estate loans with a high interest between 14% and 21% p.a.
A unique feature of the P2P platform is the buyback fund, which cannot be compared with the buyback guarantee as we are used to from other P2P lending sites. The buyback is an additional safety feature that should decrease the risk of lost in the unlikely event a loan defaults.
I have been investing in Crowdestor for quite some time now. The diversification on this platform is quite limited and the tranparency as well as the communication doesn't meet my expectations, which is why I won't increase my investment on Crowdestor in the future. The platform is targeted towards higher-risk investors.
Here is a table that compares the mentioned European P2P platforms head to head
| Mintos | Peerberry | EstateGuru | |
|---|---|---|---|
| Minimum Investment Amount | €10 | €10 | €50 |
| Loan Types | 8 | 2 | 7 |
| Countries | 33 | 6 | 7 |
| Loan Originators | 70 | 17 | 1 |
| Currencies | 12 | 1 | 1 |
| Interest Rate | 5% - 14% | 11% - 13% | 9% - 13% |
| Loan Period | 1 - 38 months | 2 days to 4 years | 6 - 24 months |
| Buyback Guarantee | YES | YES | No |
If you are just starting out with P2P lending you certainly don’t have to diversify your portfolio across all P2P platforms.
Even advanced P2P investors don’t diversify across all available platforms. Pick one or two platforms to test and see from there if you see the need to invest in multiple sites.
If I would start from scratch again I would start with Mintos as it’s the most developed P2P platform in Europe in my opinion.
The six mentioned P2P sites are just the tip of the iceberg. There are more than 30 P2P lending sites in Europe. It's up to everyone to decide in which platform to invest. I highly suggest you do extensive research about every single platform before you deposit your money and start investing in loans. P2P lending can be a very risky investment if you invest in platforms that do not protect investor's interests.
P.S. Some of the statistical data in this post might be outdated (check directly with the platform to get accurate data)