Best Peer to Peer Lending Sites: Review for investors in Europe

Peer to peer lending sites are growing in popularity in 2019, and for small investors with hundreds or thousands EUR ready to invest, it is one of the most profitable ways to earn money. Someone can call P2P investing a passive income. I rather stick with the term of alternative investment, because as you can see below, you must put some work on it continuously or at least get know-how setting up an Auto invest.

Here is the list of the best peer to peer investment sites in Europe. I intentionally focus on Europe, because I live in the Czech Republic and after graduating from Law university, I know how Terms and Conditions can change our position as an investor. So when investing in P2P loans, I strictly choose platforms operating in Europe.

I consider multiple factors, including risk/reward ratio, track records, reputation, location, deal-flow, etc.

My best P2P lending site after six years of experience

I started investing in P2P lending markets in 2013. Honestly, it was a bit easier back than, because there weren’t so many unpaid loans and fewer competitions. Nowadays, it is not better nor worse, but different. We have more options and possibilities. It became more about strategy, and we cannot blindly choose any loan to invest.

My way of investing in peer to peer loans has changed. I tried different platforms and experimented with them. I share my experience from P2P investing so you can save time and gain valuable know-how.

If you don’t want to read the full article and you are looking for the one P2P lending platform to start investing, try Mintos platform. It is easy to set up, and you start investing from 10 EUR. The average return is around 12%, but I manage to build a strategy with 17,18% p.a.

I’m happy to help you set it up so you can get similar results. Just let me know once you register your Mintos account.

Also, you can use this link, so you get a 1% bonus for the first 90 days of your investments.

Affiliate disclaimer: Please note, that I’ll also get 1% bonus and I’m an affiliate for Mintos. I use Mintos and invest there because I found it profitable, not because of registering other people. I share my experience and help you with any question you have about Mintos and P2P lending sites. I believe this is the right way when all of us can benefit.

Finally, for those who are keen on going down the rabbit hole, here is the full in-depth article about P2P lending sites. How to invest in P2P loans with more than 10 % p.a.?

What is peer to peer lending?

The way how people borrow money has changed. Back in days, people used to go to a bank and ask for a loan or credit card. Today, instead of going to a bank, we go to each other and cut off an intermediary.

In other words, peer to peer lending platform is a website that connects individuals, investors with applicants of loan. Investors lend money and earn interests when the money is paid back.

The P2P lending market, known by the acronym P2P lending marketplace, is booming in the US, Europe, and even Asia. The reason is that many people cannot get a loan from a national bank or the conditions of getting a loan on the P2P platform are easier to meet.

Best P2P lending platforms in Europe

There are many peer-to-peer platforms in Europe, and their marketing can be tricky. As an investor, you should be very careful. With the rising popularity of peer-to-peer lending platforms, online investments, competition, and products increased and became more sophisticated.

It’s better to spend some time on due diligence before you invest so that you can sleep tight.

Here are the best P2P sites in Europe currently available in 2019.

Mintos review: The best choice for 2019

Mintos is the most popular P2P lending platform in Europe in 2019. It has been already four years on the market, and investors are thrilled with their returns. It is the best choice for beginners and experienced investors who are looking for diversification.

Mintos offers a vast quantity of loans so you can find those that fit your investment criteria. You can also set up an Auto Invest that save your time and automate your profit.

Mintos constantly makes improvements for investors and borrowers. It won the Altfi People’s Choice Award in 2018 and both 2016 and 2017 and proved to be very successful fintech startup in Europe.

The advantage for investors outside Europe is that you can still register even if you don’t live in Europe.

Click here to try Mintos and get an extra1% bonus.

By using the link above you will get 1% of your average daily balance which is paid in 3 installments for the first 90 days.

Mintos pro:

• The user-friendly platform, easy to navigate.
• No investment fees.
• Four years on the market with positive reviews.
• Trustpilot review 8.5 (more than 750 individual reviews).
• You can choose from Auto and Manual invest.
• Secure platform.

Mintos cons:

• The buyback guarantee is not available for all loans. You must carefully filter them.
• Decreasing returns for investors who invest in EUR.
• Currency exchange with fees

Grupeer review

Grupeer is another P2P investment platform. The average project interest rate is around 13%. You can choose from different investment options, such as Loan deals, Development projects, or Grupeer stability fund.

The company is from Latvia, and it is not a surprise for P2P startups. The north of Europe is very keen on developing fintech startups, primarily focused on peer to peer models.

Click here to try Grupeer.

Grupper pros:

• High return on investment.
• Diversification (personal loans, real estate, car loans, business loans).
• Auto invest.

Grupper cons:

• A limited number of real estate investments.
• No secondary market.
• The interest rates dropped a bit since the platform launched.

EstateGuru.co

EstateGuru is a favorite P2P lending platform that also offers real estate P2P investments. Investors lend money for real estate projects.

Don’t be confused; estateguru.com is another project that has nothing in common with reviewed estateguru.co.

Estateguru.co, the company is in Estonia, and a strong financial background is fulfilled. The platform offers a Buy Back Guarantee that helps investors.

As an investor, you can earn from 8 % to 12 % p.a. Some investments offer a cashback +1%.

The great thing about EstateGuru is that you can invest in real estate without dealing with anything physical.

EstateGuru pros:

• Auto Invest.
• BuyBack guarantee.
• One of the biggest market of real estate online investments.

EstateGuru cons:

• Diversification only on real estate deals.
• Minimum investment 50 Euro.
• Good deals are usually bought very quickly.

Is P2P investing safe?

We have to consider P2P investing as an alternative investment. Every investment is not 100% safe. There is always a risk that you lose your money. Never invest money that you cannot afford to lose.

Usually, the higher return is promoted, the higher risk is involved.

Always check reviews of individuals that have more than one year experience with a particular platform. Many articles on the internet promote P2P lending platforms, and their only reason is to get an affiliate commission. That’s why they write positive reviews and not telling you the risks or anything contrary.

Also, you’d better check the company that runs the P2P platform. Make sure they have a specific financial license and insurance.

No website is immune to hacking. Make sure the platform use the “https” URL protocol, you can quickly check it in your browser.

Do not store money that is not invested in the platform. It is better (safer) to send it to your bank account.

Buy Back Guarantee won’t save you

Many P2P investment sites offer a functionality called Buy Back Guarantee. That means that an investor will get the invested money back even if a loaner fails with his payment. It is a great feature, and I highly recommend to invest only with the Money back guarantee condition.

Be aware that the P2P platform is not the guarantee, but the loan provider is. That means you can lose your money if the loan provider defaults. The buyback guarantee is useful for investors, but it won’t save us from anything.

I try to explain it in an example.

You invest in a loan that the borrower will not pay. After 1–3 months, the buyback guarantee is activated, and even if the borrower didn’t pay his debt, the loan provider would send you money with interest back.

That’s great, right?!

The loan provider will send you money back unless it bankrupts. In the scenario where loan provider has many borrowers, they aren’t able to pay their debts and the loan provider run out of its own money. It‘s game over!

It is not a hypothetical case. It has already happened. Some peer-to-peer sites had to close their activity because their partnered loan providers got bankrupted. Unfortunately, the recent incident with Lendy.co.uk is another similar example.

P2P investments have some risks, and it is not for sure passive income, Perpetuum mobile for money or money guaranteed income. I call it an alternative investment where you take some risk to gain a return.

How much you can earn on P2P sites

P2P investments are well known as a passive income option. I think that we shouldn’t call it that way for several reasons.

First, P2P platforms are here for individual investors for less than ten years. It is very trendy now, but we must consider that the platforms were usually built as startups. We must be cautious about what will happen next.

Nothing is 100% passive. Indeed, you can set up auto investments and then just take profits. I tell you about my experience. I found manual filtering of loans on Mintos more profitable than Auto investing. So I log in every two weeks to check my investments and regularly reinvest any available money. It takes me 10–15 minutes, but I also like to check if the platform is live and everything is going fine.

As an investor, you should also tax your income. Sure, that depends on your home country. There is a 15% tax from the income of investments like P2P in the Czech Republic.

There is usually no fee for participation in investing in particular P2P platforms. They are free of charge.

Depends on your country, you might have to exchange your money before investing. Many investments are offered in Euro. The platforms provide an exchange in their platforms, but the exchange rate is not perfect for you. I mean, if you can, you should instead use Transferwise or Revolut to deposit the money in the currency you want to invest.

We use Czech Corona in the Czech Republic, so it is precisely my case. I also found more profitable investing in other currencies than the Euro. For example, I invest in Mintos in KZT because I can earn 17% per annum.

Popular P2P lending sites in the US

There are many popular P2P platforms in the US, and the lending marketplace started initially there. One of the best P2P lending sites is Upstart (a venture by ex-Googlers) and Lending Club (the first publicly traded online peer-to-peer lending company in the U.S.). Other favorite platforms are Funding Circle, Prospect Marketplace, CircleBack Lending, or Peerform.

Usually, for P2P sites in the US are set up requirements such as US citizen or permanent resident. So for ordinary investor from Europe, there no chance to participate in those P2P platforms.

The minimum investment is often 1000 USD, so we can say that P2P investments are in Europe more friendly for smaller investors.

Conclusion on peer to peer lending sites

It is always tough to choose the best P2P lending platform because every investor prefers different strategy and asset management. What I learned in peer to peer investing since 2013 after experimenting in different platforms is that the key to success is diversification.

I invest less than 10% of my all investments in a P2P marketplace. I want to stay active in this asset class because I believe that peer to peer lending is the future. Cutting of the middleman (banks) will play a crucial role in fintech and also in our economy.

If you are a newbie in P2P platforms and looking for one to start with, I can say only this. If I start over this day, I will go with Mintos. I like its user interface, easy to navigate UX, just a few clicks to set up a strategy and Auto Invest with 12% p.a. is going to be your new reality. For those who like to dig deeper, tuning your set up can turn into 17% p.a., and comparing to other investment assets, such as stocks, bonds, commodities or gold, peer to peer investments seem to be very good, because of its risk/reward ratio.