Peer-to-Peer Lending With Low Default Rates
In this guide we will review the top platforms with the cleanest track records. These are platforms that have never lost their investors' capital and therefore, have the right to claim a zero percent in default rate.
There are two kinds of platforms with low default rates. Those that are new and have yet to encounter a large amount of defaulted loans. And those, that have been around the block and through various obstacles, maintained a healthy and functioning, lender-borrower ecosystem. Platforms that have just entered the market are still considered high risk. These platforms still need to stand the test of time before they can be considered low risk and safe investment avenues. On the other hand, there are some platforms that are nearing a decade in operations and have yet to disappoint their investors.
PeerBerry
PeerBerry has been dubbed the fastest growing peer-to-peer lending platform due to the various strengths that it possesses. PeerBerry is a state-of-the-art platform, sophisticated, with an easy to use auto0investing tool, a low default rate and reasonably high returns.
PeerBerry is the product of a well-established and successful lending group in Europe called Aventus Group. Aventus initially offered its loans on Mintos before realizing that it could create a platform just as good, maybe even better. To invest on PeerBerry there is a 10 EUR minimum investment and yearly returns range from 9 - 12 percent. PeerBerry is a Latvian based platform with an approach to peer-to-peer lending that is slightly different from their competitors.
Investors on PeerBerry are only offered a percentage of PeerBerry's overall loan portfolio. An estimate between 20 - 40 percent of PeerBerry's loan portfolio is available to investors to purchase. Otherwise, the majority of the lending and borrowing is maintained by PeerBerry itself. Investors only take a small part of PeerBerry's ongoing success. PeerBerry does not offer a secondary market, so investors may feel a lack of liquidity. PeerBerry's solution would be to advise investors to opt for 30 day loans or shorter, which are available in PeerBerry's marketplace.
If you are interested in short term loans you can learn more about them in our guide to investing in consumer loans. Investors are protected by PeerBerry's dual buyback protocol which ensures that both investors and loan originators on PeerBerry are protected by the platforms dedication to managing a healthy borrowing and lending ecosystem.
EstateGuru
There is not real estate crowdfunding platform in Europe that has handled more properties and funded more capital than EstateGuru. When it comes to peer-to-peer property related loans, EstateGuru is number one. It hosts the largest number of loan offers, the highest number of investors and have one of the low default rates, while, still providing a very attractive return for their investors.
To invest on EstateGuru, it requires a 50 EUR minimum and investors can expect to see returns ranging from 10 - 12 percent. EstateGuru has an excellent track record, with zero defaulted loans. All borrowers who have defaulted on their loans have entered some form of debt restructuring with EstateGuru, so that EstateGuru's investors may be protected, at the very least, as far as principal. EstateGuru offers a secondary market, an auto-investing tool for investments above 250 EUR and 1st or 2nd rank mortgages on all their loan offerings. Other than a 2 percent fee on EstateGuru's secondary marketplace there are no fees associated with investing on EstateGuru.
EstateGuru's auto-investing tool can take time to configure. We recommend daily observation of the auto-investing tool to ensure it's operating in the way you prefer it too. The good loans on EstateGuru are also very quick to go, the early bird gets the worm is very true in EstateGuru's ecosystem. Historically, EstateGuru has been a sound investment for the vast majority of their investors. You may experience some cash drag while projects are in the development stage, which is pretty standard on peer-to-peer real estate platforms and projects. Property lending can be rather complicated, for more information you can check out our guide on mortgage lending.
October
October, previously known as Lendix, is a French peer-to-business lending platform. October connects every day retail investors with small to medium sized enterprises around Europe. October is a well-known platform with a very strong track record.
October offers a below market interest rate but no auto-investing and no secondary market. This is because October invests a great deal into their risk management and debt restructuring protocols. October works closely with large European projects and claims itself to be a great European project which aims to improve the European economy and democratize European finance. Investing in Octobers platform requires a 20 EUR minimum entry investment and returns range from 3 - 7 percent in yearly returns.
October, like EstateGuru also has a zero percent default rate which is a testament to their ability to protect their investors' principal and recover missing funds when necessary. All investors on October are given a generous 20 EUR to invest with. Furthermore, investors are not expected to pay any fees on October's platform. The bonuses you receive can seriously add up and make a huge difference in your portfolio gains. Read more about how bonuses in our guide on peer-to-peer lending bonuses.
ReInvest24
Reinvest24's approach to real restate investing essentially redefines the game of real estate crowdfunding. Rather than simply offering a loan for mortgage rights, Reinvest24, provides investors with temporary real estate equity. They accompany this equity with an actual business plan so that investors are in fact purchasing property that generates monthly dividends and increases in value due to natural property appreciation.
Reinvest24's business model is the first of it's kind in peer-to-peer lending. It might be more accurate to say that the model is more of a peer-to-business model. Reinvest24 is a small operation that works around Estonia. Their core team discovers good value projects which they then list on their platform. The minimum investment on Reinvest24 is a 100 EUR and yearly returns range from 11 - 15 percent, which is considerably high for being a very low-risk platform.
The platform was only established in 2019. It's default rate is zero percent, but this may change over time. Reinvest24 has a secondary market where investors can invest from just a few EUR. There is a bit of cash drag on Reinvest24's platform due to a lack of investors. In general, property loans can take longer to fund due to their size. Reinvest24 is one of those new platforms that still needs time to prove its consistency but has made a great start so far.
Swaper
Swaper was established in Estonia in 2018, and formed by the loan originator Wandoo Finance. Swaper is an easy auto-investing solution whereby investors invest a minimum of 10 EUR. Swaper uses its automatic investing algorithms to ensure that investors will receive a yield of at least 14 percent. If an investor invests over 5000 EUR, then the yearly return will increase to 16 percent.
Swaper does not actually offer their investors the option to manually invest. Investors only have the option to use their auto-investing tool. On the other hand, Swaper has as very active secondary market where you can manually sell and buy loans. Swaper's platform has absolutely no fees which makes it a very attractive platform for many investors.
Swaper is only serviced by one loan originator. In theory, their platform and business model is operated to host more than one loan originator. The loan originator, Wandoo Finance, a lending group in Europe that issues loans to Fintech companies around the world and is responsible for building Swaper. Since it's creation, it has been sold to Marina Tjulinova. Swaper is heavily dependent on Wandoo Finance for loans to be issued which may prove to be a problem in the future.
Debitum Network
Debitum's Network was founded in Lithuania for the purpose of creating an ecosystem that would use the benefits of both standard cash, as well as cryptocurrencies. Debitum is currently a loan originator aggregator that assists small businesses with liquidity issues. The minimum investment is 500 EUR and interest rates vary between 8 - 9 percent in yearly returns.
Debitum Network has been the subject of some controversy due to the way they raised funds to build their entire company. Debitum debuted as a cryptocurrency hybrid, but soon after raising millions of dollars they chose to build a fiat-focused platform. The reward system is based on their crypto token Debitum. Debitum itself has a state-of-the-art platform, with a zero percent default rate, relatively high returns and and easy-to-use platform. Debitum offers both an auto-investing tool as well as a secondary market for liquidity.
Debitum is still a fairly new peer-to-peer lending platform, having been founded only in 2018. The loans span between 4 and 24 months. Borrowers are business owners who have payments in their accounts receivable. They show the invoice to Debitum investors and Debitum investors fund the business owners until the invoice comes and is subsequently paid back. This is a great way to approach peer-to-peer lending with small businesses. If you're interested in reading more about peer-to-peer lending and business loans, you may refer to our guide on investing on business loans.
Market Type
Consumer Loans
Average Returns
9 - 12%
Minimum Investment
EUR 10
Signup Bonus
0.5%
Registered users
70,000
Total funds invested
EUR 1.8 Billion
Default rate
7%
Regulating entity
Self-Regulated/EU Compliant
Buyback guarantee
Secondary market
Payment methods
Bank Transfer, Bank Card, TransferWise
Withdrawal methods
Bank Transfer, Bank Card, TransferWise
PeerBerry is an excellent P2P platform to its 100 percent successful fund recovery track record. They offer slightly below market interest rates in exchange for a guarantee users will never lose their funds.
Market Type
Mortgage Loans
Average Returns
8 - 13%
Minimum Investment
EUR 50
Signup Bonus
0.5%
Registered users
150,000
Total funds invested
EUR 700 Million
Default rate
6%
Regulating entity
Bank of Lithuania
Buyback guarantee
Secondary market
Payment methods
Bank Transfer, SEPA, Credit Card, TransferWise
Withdrawal methods
Bank Transfer, SEPA, Credit Card, TransferWise
EstateGuru is a highly recognized and successful P2P Lending company. What makes EstateGuru as P2P Lender so profitable and secure? Explore the breakdown with P2PIncome's thorough analysis of EstateGuru's strengths and weaknesses.
Market Type
Business Loans
Average Returns
3 - 7%
Minimum Investment
EUR 20
Signup Bonus
EUR 20
Registered users
43,000
Total funds invested
EUR 1 Billion
Default rate
3%
Regulating entity
Self-Regulated/EU Compliant
Buyback guarantee
Secondary market
Payment methods
Bank Card, Bank Transfer, TransferWise
Withdrawal methods
Bank Card, Bank Transfer, TransferWise
October specializes in small risk business loans specifically to SME's in Europe. October has a great track record of fund recoveries, a solid mission and a very strong foundation. October's business and risk strategy is worth the time to read.
Market Type
Mortgage Loans
Average Returns
12 - 17%
Minimum Investment
EUR 100
Signup Bonus
EUR 10
Registered users
25,000
Total funds invested
EUR 40 Million
Default rate
0%
Regulating entity
Self-Regulated/EU Compliant
Buyback guarantee
Secondary market
Payment methods
Bank Transfer, Bank Card, TransferWise
Withdrawal methods
Bank Transfer, Bank Card, TransferWise
Reinvest24 is an equity backed real estate rental P2P lender. Though they are a much smaller P2P lending platform in comparison to the top P2P lenders. They deserve a high place on the list because of their attention to detail and successful execution of business goals.
Market Type
Consumer Loans
Average Returns
14 - 16%
Minimum Investment
EUR 10
Signup Bonus
None
Registered users
6000
Total funds invested
EUR 400 Million
Default rate
Undisclosed
Regulating entity
Self-Regulated/EU Compliant
Buyback guarantee
Secondary market
Payment methods
Bank Transfer
Withdrawal methods
Bank Transfer
Swaper only offers auto investing in unsecured consumer loans in Poland and Spain. Swaper is a subsidiary of Wandoo Finance Group, a loan originator that also services the loans on Swaper's platform. Swaper advertises a 14% IRR and premium investors who have invested over 5000 EUR receive an IRR of 16%.
Market Type
Business Loans
Average Returns
8 - 9%
Minimum Investment
EUR 500
Signup Bonus
EUR 20
Registered users
10,000
Total funds invested
EUR 80 Million
Default rate
0%
Regulating entity
Financial & Capital Market Comission (Latvia)
Buyback guarantee
Secondary market
Payment methods
Bank Transfer
Withdrawal methods
Bank Transfer
Debitum Network is an innovative fintech platform that wishes to bridge fiat and crypto into one platform. Debitum Network is a loan originator aggregator with an 8 percent average for investors. Read our analysis on Debitums strengths and weaknesses as a peer-to-peer lending platform.
Veteran P2P Platforms and New Players
Platforms like October and EstateGuru have set very high standards for new peer-to-peer lending platforms. They have set this standard by providing their investors with consistent returns, while, completely protecting their investors' principal. There zero percent default rate status over their long years of operation can only be explained by their competency and dedication to managing a healthy financial ecosystem.
Ultimately, the only real problem a lender can encounter is the borrower stops paying back their loan for whatever reason. It is inevitable that borrowers will default on their loan contracts? Well, what matters is the ability of the loan originators to restructure loan agreements, or find cost-effective ways to sell collateral provided by the borrowers.
Verdict
It really goes without saying that the platforms with the lowest default rates are platforms you should be investing in or be planning to invest in. Any platform with a default rate of say, above 10%, should be avoided at all costs. Naturally, if you are more of a high risk investor, then these options can be attractive to you. Otherwise, avoid high default rate P2P platforms.
It would be advisable to choose the platforms with a zero percent default because it means your principle will always be protected. Even if the borrower goes completely bankrupt, platforms like PeerBerry will move to ensure that your capital is completely protected. With this in mind, it's difficult to recommend any other platform other than PeerBerry when judging solely on the criteria of low default rates.