How to Choose the Right P2P Lending Platform

January 15th, 2021
5 minutes read

There are dozens of P2P lending platforms out there. From large marketplaces offering a wide range of investments to niche, highly specialised firms; from well-established brands to ‘rising stars’ to (fortunately infrequent) scams. How to choose a platform that will meet your investment goals and not go bust before you start making a profit?

I suggest following a simple three-step verification process:

  1. Check whether you actually can invest on the platform.
  2. Assess how well the platform’s strategy fits your investment goals.
  3. Evaluate the platform’s reliability.

Let’s take a closer look at each step.

A practical guide to investing and finding the best P2P Lending Platform for you.

Step 1. Is this platform for you?

This first filter simply aims to exclude platforms that don’t meet your basic criteria, such as:


Check if you are formally allowed to use the platform – for instance, if you’re an EU citizen, you might not be able to invest on many US-based platforms. European platforms most often require users to have a residency or bank account in a country belonging to the EU, EEA (European Economic Area) and/or SEPA (Single Euro Payments Area).


Most platforms are available in English but not all – for instance, to use the popular real estate crowdfunding platform Bergfuerst, you need to be comfortable browsing deals in German. If you would rather go for a platform in your national language, the choice might be limited depending on where you reside.


Euro is obviously the most popular choice among European platforms. Some platforms offer conversion if you make a deposit in other currencies but double-check the rates – you might be better off using other exchange services (such as Revolut or TransferWise). Again, if you’re keen on investing in another currency, your choices may be significantly narrowed.

Minimum investment

Ten euros is enough to start investing on most platforms, although there are some exceptions, especially among real estate crowdfunding sites. Regardless of the required amounts, you should also make sure you have enough capital to reasonably diversify your investment portfolio.

Step 2. Does the platform’s strategy meet your investment goals?

The second step should filter out platforms compatible with your preferences as an investor. Here are some factors to consider.

Your risk tolerance

Do you want to go for the highest returns? Or do you prefer to play safe? The returns offered by platforms can vary from 6 close to 20 per cent, and the choice is largely down to personal preferences. Remember – higher returns mean more risk.

Investment type

Consumer loans? SME debt or equity? Real estate? For various reasons, you might prefer one investment type over another. Even though you can find platforms that offer some combination of the above, most sites specialise in a certain type of investments. Building a diversified portfolio will usually mean using different platforms with different asset exposure. 

Investment horizon

If you have some free cash that you don’t want to lay idle but have easily accessible nonetheless, you might consider microloans with maturity below one month. Another option is to choose platforms that offer swift early exit options at low, or preferably, no extra cost. On the other side, you have very-long-term deals or even investments with undefined maturity – mostly SME equity. Think twice before you commit to those, especially if there’s no withdrawal option before the end of the term.

Your existing portfolio

If you already have €10,000 invested in consumer loans, you might want to complement it with some business or real estate deals. But also consider your non-P2P investments. Check out our posts on how P2P investments can fit in with your investments in stocks and bonds.

Step 3. Is the platform reliable, transparent and easy to use?

Once you’ve eliminated platforms that don’t meet your basic eligibility criteria and your investment goals, you should look at the best performers. These are some of the key points that will help you identify them. 

The team

Check the “About us” section to see who’s behind the platform. How much experience do they have in (alternative) finance? Do they already have any successful or failed ventures in their resumes? A team with strong financial and managerial expertise is likely to make informed decisions when picking investments or managing loans. If you don’t find any information – that’s definitely a red flag. 

Track record

Have a look at the numbers. Check how long the platform has been around, how many investors have trusted it with their funds, amount of loans funded, and the default rate.  Past performance doesn’t necessarily determine the future performance, but it will give you a good overview of how the platform has been managed so far.

Due diligence process and investment security

How does the platform choose investments? What share of all available deals is rejected? Who are the borrowers, and where do they come from? Does the platform monitor trustworthiness and financial situation of its borrowers or loan originators? Does the platform or the loan originator have a stake in the published investments – do they have “skin in the game”? What security mechanisms are offered (e.g., buyback guarantee, collateral, personal guarantee, platform’s provisional fund)? These are some of the most important questions to be answered before you decide to invest.

Features and Usability

Go through the platform’s key features. Take a look at the deposit and withdrawal options, the availability and complexity of the auto-invest function and any other functionalities you find. If you’d rather invest manually, go through the deal descriptions and see how easy it is to navigate them.

Diversification options

Check where most of the investments come from, their risk profiles and what types they cover. A narrow focus is not necessarily a bad thing; it just means you’ll have to pick a few different platforms. 


Pay attention to how easy it is to find the information you’re looking for. Does the FAQ section answer all your questions? Does the platform provide comprehensive statistics and business data? Ideally, does it publish audited financial reports?

How to choose the best P2P lending platform for you

We hope this overview of key aspects and questions will help you make informed choices. The amount of information might be overwhelming, though, and it will surely take time to gather all the intel on your own. Therefore, the platform reviews and best platforms rankings is a good place to start.