Choosing a Crowdlending Platform

Searching for the right P2P platformChoosing the best crowdlending platform is important, and it entirely depends on your personal preferences. The right platform for some may not be the preferred choice for you.

Luckily many platforms offer several several strategies within their platforms, that allows you to invest in loan types that fits each individual investors’ particular needs.

So instead of spreading your investments thin all across the board, you can invest through 2 – 3 platforms. To some investors, even one platform is sufficient, although that’s not recommended, as your entire portfolio will depend on that platform.

Investment strategies

An important task that any investor, crowdlending or otherwise, should do is to choose a strategy.

A strategy allows you to:

  • Know what you’re doing: You don’t invest blindly.
  • Be able to measure performance: An investment strategy includes an expected return in investment.
  • Evaluate your choices: When you know what you want to accomplish, you can evaluate the results and determine if you want to change your strategy.

There are many types of investment strategies. Which one you should choose depends on your personal preferences.

Many people don’t invest, because they are afraid of losing their money. And that’s a good strategy while you’re learning the basics.

But not investing is not a good long-term strategy. It’s not a guarantee that you won’t lose your money. In fact, not investing is a guarantee that the value of your money will decline over time. Inflation will slowly but surely eat away of your hard earned money.

Risk versus gain in crowdlending

Due to inflation, we all have to invest our money in one way or another. Some prefer low risk and low gains, while others prefer high risk and high potential returns. Most of us prefer something in between.

Buyback guarantee vs higher interest

An important factor that affects the relationship between risk and reward is buyback guarantee. In short buyback guarantee is a guarantee provided by the loan originator (usually the platform or their partners) that, if loan payments are delayed, you, the investor will get your investment back. You can read more about buyback guarantee here.

The benefit of a buyback guarantee is obvious, as it removes the risk of default from the investor and places it upon the loan originator.

The disadvantage to buyback guarantees is that loan originator needs to be paid for this service. Usually is means that they keep a large part of the interest payments for themselves.

If you prefer these low risk investments, look for a platform that offers buyback guarantee. Such as Mintos.

If, instead, you want the highest possible return and you’re willing to take on a higher risk. In that case you could invest through Bondora and choose only High Risk (HR) loans. HR loans offer interest rates above 100 %, often even above 200 %. Many of these loans will default, but the interest rate from those who do pay their debt, is high enough to making it an attractive option for those aiming for high returns.

Secured loans

A happy medium for many investors are secured loans loans. I.E. loans that are secured by a form of capital – typically a car or a house. If the borrower can’t pay their dues, the collateral will be sold so cover their debt.

Many platforms, such as Žltý melón and Bulkestate, offer these kinds of loans, that minimize risk while securing a higher return than loans with buyback guarantee.

Selecting the right investment currency

If you wish to be less affected by currency fluctuations, choose either your local currency or one that’s pegged to yours. That way you will not be affected by changes in exchange rates. This is a good choice if you aim for a steady, fixed income.

On the other hand, some investors do want to invest in fluctuating currencies. They do that in anticipation of gaining not only from interest rates, but also exchange rates.

Others invest in multiple currencies as a diversification strategy. They may not have long-term trust in their own currency, so they choose to invest in one or more foreign ones.

Use the currency filter to select platforms that offer the right diversification for your needs.


Geography mattes to most crowdlending investors. By creating a geographically diversified portfolio, you are more safe in case of localized events that may affect the crowdlending market.

Instead of investing in only one location, one can combine most parts of Europe and parts of the world as well. A geographically well-diversified portfolio can be generated at Mintos, which offers loans in several European as well as a few options outside of Europe. Or use the country filter to select platforms that offer just the right geographic diversification for your needs.

Other factors

Not all investors are primarily in it for the financial gains. Sure, the money is a good benefit, but other factors may matter as well.

Perhaps you want to support your local area/country. Say you live in a country where banks are treating customers unfairly. Perhaps they don’t lend money to upstarts or to first time house buyers. Say you want to help local business bypass the banks, so you invest through a platform that allows small business to lend money at reasonable rates.

These are all very legitimate factors, that can also taken into account when setting up your crowdlending portfolio. Just don’t forget to make sure to remember your preferred risk/gain ratio.