My experience with P2P lending: over €85,000 invested
In recent years, P2P lending has transformed from a high-risk alternative investment opportunity into established and reliable investments. Especially in times of falling base rates or economic uncertainty, their excellent interest rates are attractive.
But it’s not just the number of investors that continues to grow; the choice of P2P platforms is also constantly increasing. Below, I have summarised my experience with P2P lending after more than 10 years and over €88,000 in investments, showing you the opportunities, risks and my experience with P2P lending with different providers.
In brief:
- P2P lending offers attractive interest rates, which can exceed 20% per annum.
- Additional advantages include the possibility of diversification and the high liquidity offered by some providers.
- Past experience shows that P2P lending is more resilient to crises than other investment classes!
- However, a fundamental risk remains
- It is important to choose the right platform. I will show you a brief comparison of the best providers based on my experience.
P2P experiences: how personal lending investments work
With P2P lending, private individuals like you and me can join forces and finance loans with our pooled capital. In return, we receive high interest rates: P2P lending is among the financial investments with high returns!
The entire process works through online platforms that connect lenders and borrowers, manage payment processes and more.
- Borrowers include individuals, businesses, farmers, builders, energy producers, and more.
- P2P lending is available with different terms: some providers require you to invest your money for several months, while platforms such as Monefit offer daily payments.
- The minimum amounts are also extremely flexible. With Bondora, for example, you can start with as little as €1. For highly profitable offers such as Ventus Energy, however, a minimum of €1,000 is required.
Every quarter, I summarise the best offers in my P2P lending ranking. In addition, I have personally visited almost all P2P companies and examined them closely. Based on my extensive experience, I can say that
P2P lending is an extremely profitable investment, provided you choose the right platforms and pay attention to sufficient diversification!
Potential risks: how dangerous is P2P lending?
Of course, interest rates of 14, 20 or even 24 per cent are not so easily obtained. You expose your capital to a fundamental risk:
- A single borrower may default or even become completely insolvent. In that case, you will have to wait longer to get your money back, or you may even lose it completely.
- A P2P platform could fail completely. In that case, it could take a long time to get your money back from borrowers. Depending on the provider’s structure, you could even lose all or part of it.
However, the reality is not as dramatic as these two points seem: there are numerous security measures and countermeasures that protect you in both cases.
- Repurchase and recovery guarantee: Today, most peer-to-peer companies offer repurchase guarantees. If a loan cannot be repaid within the agreed terms, the platforms pay it out of their own pockets. They then recover the money from users through debt collection procedures. However, since you have already received your payment, you do not have to worry about anything. Other providers, such as EstateGuru, do not offer such a guarantee. In the event of late or non-payment, you will have to wait for the company to recover the money. However, you will be compensated with additional interest for the entire period.
- Regulation: I only invest in P2P providers that are regulated by state authorities, and I recommend you do the same. Among other things, these companies must keep investor funds separate from their own capital. In the event of insolvency, there are precise rules governing who receives what and when. In this case, you have a high probability of recovering most of your money.
A surprise default is a highly unlikely scenario. Problems often show up well in advance in financial statements (another important quality factor that I pay attention to in my P2P lending rankings).
However, delays in repayments are entirely possible on platforms without buy-back guarantees. In my experience, in such cases it is best to only invest money that you can afford to be without for a long period of time in case of an emergency.
Overall, the risk of P2P lending is easily manageable. Spread your capital across multiple platforms and use providers with buyback guarantees (or factor in payment delays) to minimise risk. There is still some residual risk, but the high interest rates are definitely worth it!
My personal experience with P2P lending
This wide choice and excellent returns attracted me a long time ago: my experience in P2P dates back over 10 years. At first, I couldn’t even invest €500 per month, but today I invest over €10,000!
I gained my first experience with two of the oldest P2P platforms: Mintos and Bondora. Many other offers were added later, most of which generated good or even excellent returns.
Of course, there were also minor setbacks:
- During the COVID crisis, Mintos recorded an increase in bad debts, which is not particularly dramatic at first glance. However, it is annoying that today, more than five years later, I am still waiting for €237 in repayments!
- EstateGuru also recorded defaults that should have been covered by the sale of the respective properties. The sad result for me: a loss of 45%! Fortunately, I had only invested €50 in this loan.
My most negative experience with P2P lending was undoubtedly the collapse of Grupeer. This platform also ran into difficulties during the COVID lockdown. It emerged that the managers had embezzled funds on a large scale.
To date, the insolvency is still in liquidation and I have little hope of recovering the €1,000 I invested. This case demonstrates how important financial supervisory controls and independently audited corporate divisions are in the P2P world!
Despite a few setbacks, the positive experience with P2P lending has clearly prevailed. I have gradually built up a large P2P portfolio: I currently have around 85,000 euros invested in this form of investment, which is about 20% of my depot.
This substantial investment is really profitable: I receive over €900 in interest every month! It is mainly the providers Ventus Energy, Monefit, Swaper and Debitum that guarantee this fantastic additional income.
I have had excellent experiences with these P2P lending platforms.
In over 10 years of P2P investing, I have had both positive and negative experiences. I have already summarised my five failed platforms in a report.
Since then, however, a lot has changed: both the P2P market and my analysis methods have become more sophisticated. I achieve a reliable return of over 15% per annum thanks to personal lending, and thanks to this form of investment, I have managed to weather the COVID crisis and the attack on Ukraine, among other things, without major damage.
In my experience, the best platforms are:
Monetfit Smartsaver
Monefit belongs to a special category of P2P platforms: here, you make your money directly available to the company and do not have to select or manage the loans yourself. The interest rate, at 7.5%, is average for P2P, but in return you get a big advantage: you can withdraw your money at any time!
Monefit is therefore suitable for your savings, as a substitute for a current account or for temporarily parking capital. It is a particularly simple way to make your money work for you, without having to worry about anything.
There is even a savings plan for automatic investments, to make it even easier to build up your assets.
I have been registered on the platform since its launch and have had excellent experiences so far. I particularly like the fact that the company is extremely profitable and has substantial reserves. This allows me to face any crises with peace of mind.
To learn more about the pros and cons, read my review on Monefit.
Debitum Investments
Most P2P platforms focus on consumer loans. Debitum is a welcome change: our money is invested in business loans and yields an average interest rate of 15%.
I have been active on this platform for many years and, like all other users, I have only had positive experiences: payments have always been punctual and reliable. Even in times of economic crisis, there have been no problems!
Although Debitum consistently scores highly in my P2P lending rankings, it remains something of an insider tip: relatively few users have signed up so far. To find out more, read my review of my experience with Debitum.
Swaper
At first glance, Swaper is a typical consumer credit platform. However, in addition to the very attractive interest rate of 16%, there is another advantage that is not immediately obvious: you can sell the loans you have invested in to other investors in a matter of seconds!
This means you can exit an investment at any time. In my experience, this makes Swaper one of the most flexible P2P lending providers around!
The company also generates a profit of almost €4 million per year and should therefore be well equipped to weather any future crises (as it has done so far). Overall, I feel very confident and will continue to increase my investment, which currently stands at around €6,000.
In my Swaper review, I have gathered further important information for you.
Ventus Energy
No P2P supplier is growing as fast as Ventus Energy! It is a Baltic energy company that operates power stations, solar plants, thermal power stations and other energy projects.
Success is guaranteed because demand is high and the European Union provides generous subsidies. In addition, Ventus Energy often purchases power plants and similar facilities at very favourable prices and modernises them. To this end, it utilises capital from investors such as you and me.
In return, we receive an interest rate of 18%, which can be increased to up to 24% thanks to registration bonuses and cashback promotions! One disadvantage, however, is the very high minimum investment of €1,000.
Ventus Energy is suitable for investors who are looking for high returns and are willing to accept a slightly higher risk. I have been involved since the beginning and have increased my investment to over €12,000. To find out more, read my review of Ventus Energy.
Lande
Farmers also need money, and you can make it available to them through Lande. This way, you not only support this vital sector, but also earn attractive interest rates averaging 11%. Some projects can even offer up to 16%!
Machinery, livestock or land are deposited as collateral. This means that these investments offer additional security that you would not find with other providers.
I have already gained experience in this field since 2020 and am convinced of the platform’s validity. For this reason, I have invested approximately €8,000.
Lande may not pay the highest interest rates in the P2P sector, but it offers an extremely attractive sector, good guarantees and is ideal for diversification. Other investors have also noticed this: the number of users has been growing steadily for a long time!
P2P lending: taxes, registrations and other things you should know
P2P lending is very attractive investment and getting started is very easy: all platforms aim to make registration as simple and quick as possible and process deposits and withdrawals rapidly. To invest your money, all you need to do is:
- An identity document (passport, identity card or residence permit) to confirm your identity
- A smartphone with a camera and Internet connection
- An e-mail address
- A bank account, depending on the provider, in Europe or any country (SEPA).
The situation becomes slightly more complicated if you are not a citizen of a European Union country. In this case, in addition to your residence permit, suppliers may also ask you for a document certifying your address (certificate of residence, water bill, etc.).
Do not worry too much: in my experience, P2P providers will help you as much as possible during registration; after all, they want your money!
Once active, your first earnings will soon appear in your account. You must declare your earnings in your tax return and (if you have used up your savings allowance) pay tax on them too.
Your earnings must be entered in your tax return on form KAP. Income from domestic P2P platforms must be entered in lines 7 to 11. However, in my experience, there are currently no interesting German P2P providers, so this aspect is less relevant.
Conclusion: my experience with P2P has been extremely positive.
I have been investing in P2P lending for over 10 years and have invested more than €85,000 in this asset class. My experience has been almost entirely positive!
Apart from a few minor disappointments (lower-than-expected returns on some platforms, payment delays on others, etc.), P2P providers have delivered on their promises: high interest rates, broad diversification and attractive extras.
- For example, with Monefit, you can withdraw your money at any time and use it as a substitute for a current account.
- Lande offers you investments in agriculture secured by real assets such as machinery or land.
- Through Debitum Investments, you can lend your money to companies.
- With Swaper, you finance consumer credit and, if necessary, you can recover your money very quickly.
- Ventus Energy manages power stations and other energy projects and pays your investment with interest of up to 24%.
Choosing the right P2P companies is crucial, as there are risks to be taken seriously: borrowers may become insolvent, payments may be delayed, or even the entire platform may fail!
Based on my personal experience, I therefore recommend focusing only on regulated offers that publish annual reports. A buy-back guarantee is also very useful, but in some P2P lending this is not possible due to their structure. In such cases, you should only invest money that you can do without for a long period of time.
If you pay attention to these points and are willing to accept a basic level of risk, you can earn high interest rates and enjoy great flexibility. You too can have positive experiences with P2P lending if you follow my advice.
FAQ – Frequently asked questions about the P2P lending experience
