The ultimate guide to crowdlending: investing and best platforms in Europe
Investing in loans: exploring the opportunities.

The ultimate guide to crowdlending: investing and best platforms in Europe

Discover how crowdlending works, the difference between crowdlending and crowdfunding, and the best crowdlending platforms in Europe for investors. Learn how to become a successful crowdlending investor and make the most out of this alternative investment opportunity.

Crowdlending, also known as peer-to-peer lending, is a form of lending where borrowers are connected directly with investors through an online platform. These platforms act as intermediaries, matching borrowers who need a loan with investors who are willing to lend money for a return on their investment. This means that individuals or businesses can borrow money from a pool of investors rather than from a traditional financial institution like a bank.

Crowdlending typically offers borrowers lower interest rates and fees than traditional lenders, while investors can earn higher returns on their investment than they might from more traditional investments. This approach to lending has become increasingly popular in recent years, particularly with the rise of online platforms that make it easy for borrowers and investors to connect.

The history of crowdlending can be traced back to the early 2000s, with the launch of platforms like Zopa in the UK and Prosper in the US. These platforms were created to provide an alternative to traditional banking and allow borrowers to access lower interest rates than they might get from a bank. Over time, crowdlending has grown in popularity and has expanded to include a range of loan types, including personal loans, business loans, and real estate loans. Today, there are a variety of crowdlending platforms available around the world, offering investors a new way to invest their money while providing borrowers with access to much-needed funds.

How does crowdlending work?

The process of crowdlending typically involves several steps. First, a borrower applies for a loan on a crowdlending platform, providing information about their creditworthiness, income, and the purpose of the loan. The platform then evaluates the borrower's application and assigns a risk rating, which determines the interest rate that P2P lenders will earn on their investment.

Next, individual investors can browse the loan listings and choose which loans to invest in. Investors can typically invest as little as $10 or $20 in a single loan, allowing for diversification across multiple loans to spread out risk. Once the loan is fully funded by investors, the borrower receives the funds and begins making monthly payments that are distributed to the investors.

Throughout the loan term, the crowdlending platform typically serves as an intermediary, handling payments, managing the loan portfolio, and providing customer service to both borrowers and investors. At the end of the loan term, the borrower has repaid the principal and interest in full, and the investors have earned a return on their investment.

How to become a crowdlending investor?

To become a crowdlending investor, the first step is to research and choose a reputable crowdlending platform. Look for best investing platforms that provide transparent information about borrower profiles, interest rates, and default rates. Then you will need to create an account and go through a verification process that may include submitting personal information, such as your name, address, and identification documents. After your account is verified, you will need to deposit funds into your crowdlending account. Many platforms require a minimum investment amount to get started.

With funds in your account, you can start browsing available loans and selecting ones that match your investment criteria.  Crowdlending platforms typically provide a range of loans with different interest rates and risk levels. You can review borrower profiles and loan details to select investments that match your investment goals. It is important to diversify your investments across multiple loans and borrowers to spread your risk. You can typically invest as little as a few euros per loan, and your returns will depend on the interest rate and repayment schedule of each loan. It's important to keep track of your investments and monitor your portfolio regularly to ensure your returns meet your expectations.

Benefits and risks of crowdlending

Crowdlending can be a beneficial investment option for both borrowers and investors. Borrowers can receive funding quickly and easily, often at a lower interest rate than traditional loans. Investors can earn higher returns on their investments compared to traditional investment options. However, like any investment, there are risks involved with crowdlending that are important to understand before investing.

Benefits of crowdlending:

  • Higher returns: crowdlending platforms offer higher returns than traditional investment options such as savings accounts and government bonds.
  • Diversification: crowdlending allows investors to diversify their portfolios by investing in a variety of loans across different industries and risk levels.
  • Easy access: crowdlending platforms offer easy access to investing, allowing investors to easily browse and select loans to invest in.
  • Transparency: crowdlending platforms provide transparency in the loan selection process and loan performance, allowing investors to make informed decisions.
  • Social impact: crowdlending can have a positive social impact by providing access to credit for small businesses and individuals who may not have access to traditional lending options.
  • Low barrier to entry: crowdlending requires lower minimum investments compared to traditional investment options, allowing individuals with smaller budgets to participate in investing.

Risks of crowdlending:

  • Default risk: the biggest risk in crowdlending is the possibility of borrowers defaulting on their loans. In some cases, the loan may be secured by an asset that can be sold to recover some or all of the money lent. However, unsecured loans are more vulnerable to default, and there may be no way to recover any of the funds.
  • Platform risk: the platform itself may face financial difficulties, which can impact investors' ability to recover their funds. This is why it is important to choose a reputable and well-established crowdlending platform that is regulated by a financial authority.
  • Liquidity risk: crowdlending investments are not as liquid as other investments, such as stocks. Once an investment is made, usually the money is tied up for the duration of the loan term, which can be several years.
  • Interest rate risk: changes in interest rates can also affect the returns of crowdlending investments. If interest rates rise, returns may decrease, while falling interest rates could result in increased competition and lower returns.

Difference between crowdlending and crowdfunding

Crowdfunding and crowdlending are often used interchangeably, but they are not the same thing. While both involve raising money from a large number of people, they operate differently.

Crowdfunding involves raising funds for a project or venture by soliciting small contributions from a large group of people, usually via an online platform. In contrast, crowdlending is a form of debt financing, where borrowers apply for loans on online platforms, and individual investors fund those loans in exchange for interest payments.

One significant difference between the two is the nature of the investment. Crowdfunding involves investing in a project or venture with the expectation of returns in form of interest, equity, or even without any expectation of financial returns. On the other hand, crowdlending involves investing in personal loans with the expectation of receiving only interest payments. Additionally, crowdlending is typically backed by collateral, while crowdfunding is not.

Another difference is the level of risk involved. Crowdlending involves the risk of borrower default, and investors may not receive the promised returns if borrowers fail to repay their loans. Crowdfunding, on the other hand, is riskier for investors, as there is no guarantee that the project or venture will be successful, and they may lose their entire investment.

So, while both crowdfunding and crowdlending involve raising funds from a large number of people, they differ in the nature of the investment, the level of risk involved, and the expected returns.

Examples of crowdlended projects:

  • Small business loans: small businesses often turn to crowdlending platforms to obtain financing for their operations. This type of project allows investors to lend money personally to small business owners in exchange for interest payments.
  • Personal loans: individuals can also seek out crowdlending platforms for personal loans. This type of project allows borrowers to obtain financing for various purposes such as debt consolidation, home improvement, or education expenses.

Examples of crowdfunded projects:

  • Real estate loans: real estate developers use crowdfunding to finance their projects. Investors can lend money to developers to purchase, renovate, or construct properties, and earn returns on their investment through interest payments or equity.
  • Renewable energy projects: crowdfunding can also be used to finance renewable energy projects, such as wind or solar farms. Investors can lend money to developers of these projects and receive interest payments or equity  in return.

Crowdlending Investment

Crowdlending investment offers individuals the opportunity to earn higher returns on their investments compared to traditional investing methods. The interest rates offered by crowdlending platforms can range from 5% to over 20%, depending on the platform and the risk level of the investment. Investing in crowdlending also provides an opportunity to diversify one's investment portfolio and spread the risk among many different loans.

However, it is important to note that crowdlending investments are not risk-free and there is a possibility of losing some or all of the invested funds. It is important for investors to carefully consider their risk tolerance and do their research before investing in any crowdlending platform. Overall, crowdlending can be a great option for investors seeking higher returns and the ability to diversify their portfolio.

Factors to consider when investing in crowdlending

Investing in crowdlending can be a viable option for investors looking to diversify their portfolio and earn attractive returns. However, it is important to consider several factors before making any investment decisions. Here are some key factors to consider when investing in crowdlending:

  • Risk appetite: as with any investment, there is always an element of risk involved in crowdlending. Before investing, it is important to assess your risk appetite and determine how much risk you are willing to take on.
  • Platform reputation: when investing in crowdlending, it is essential to choose a reputable platform with a proven track record of successfully funding loans and paying out returns to investors.
  • Loan types: different crowdlending platforms offer different types of loans, such as personal loans or business loans. It is important to consider the loan types that are available on the platform and choose the ones that align with your investment goals.
  • Loan terms: loan terms can vary widely between different crowdlending platforms. It is important to carefully review the loan terms and understand factors such as interest rates, repayment schedules, and any fees associated with the loan.
  • Diversification: one of the key benefits of investing in crowdlending is the ability to diversify your portfolio. It is important to spread your investment across multiple loans and borrowers to minimize the impact of any potential defaults.
  • Research: before investing in p2p loan, it is essential to conduct thorough due diligence on the borrower and their ability to repay the loan. This may involve reviewing financial statements, credit reports, and other relevant documentation.
  • Secondary market: Some crowdlending platforms offer a secondary market where investors can buy and sell loans. This can provide greater liquidity and flexibility for investors, but it is important to understand the risks involved with buying and selling loans on the secondary market.

By considering these factors, investors can make informed decisions when investing in crowdlending and minimize the risks associated with this type of investment.

Strategies for successful crowdlending investment

Strategies for successful crowdlending investment can vary depending on the individual investor's goals, risk tolerance, and investment horizon. However, there are some general principles that can increase the likelihood of success in crowdlending.

  • Diversify your portfolio: investing in multiple loans across different crowdlending platforms and industries can help reduce the risk of default on any one loan.
  • Do your research: before investing in a loan, read the loan description and borrower profile carefully. Evaluate the borrower's credit history, income, and other relevant financial data. Look for red flags such as a history of default or high levels of debt.
  • Consider the loan term: short-term loans typically have lower interest rates but higher default risk, while long-term loans have higher interest rates but may tie up your money for a longer period.
  • Evaluate the platform: evaluate the platform's track record, fees, and customer support. Look for platforms with a proven track record of successful loan origination and repayment.
  • Stay up to date: keep track of news and trends in the industry to stay informed about changes in the crowdlending market.
  • Reinvest: when a loan is repaid, consider reinvesting the funds into new loans to maximize your returns and keep your money working for you.

By following these strategies, investors can increase their chances of success in the crowdlending market. However, it's important to remember that crowdlending, like any investment, carries risks and is not suitable for all investors. It's important to carefully evaluate your goals, risk tolerance, and investment horizon before investing in crowdlending.

Crowdlending investors

Crowdlending investors are individuals or entities that invest their money in crowdlending platforms to earn a return on their investment. They come from all walks of life and have different levels of experience in investing. Crowdlending can be an attractive investment option for those seeking a higher return on their investment than traditional savings accounts or bonds.

However, it is important to note that like any investment, there are risks involved, and investors should do research and carefully consider their investment goals and risk tolerance before investing in crowdlending. Additionally, some crowdlending platforms have requirements for investors, such as minimum investment amounts or accreditation requirements, so it is also important to research and understand the requirements before investing.

Types of investors who are suitable for crowdlending

Crowdlending has become a popular investment choice for individuals, but it may not be suitable for everyone. There are various types of investors who may find crowdlending suitable for their investment goals and risk appetite.

Firstly, individuals who are looking for a fixed income investment with a regular cash flow may find crowdlending attractive. This is because they can receive interest payments on a regular basis, which can provide a predictable income stream.

Secondly, individuals who are looking for a diversified investment portfolio may find that crowdlending can offer an alternative to traditional investments, such as stocks and bonds. By investing in a range of crowdlending loans, investors can spread their risk across different borrowers and industries.

Finally, high net worth individuals or institutional investors who are looking for alternative investments may also find crowdlending attractive. These investors may have larger sums of money to invest and may be willing to take on higher levels of risk in exchange for potentially higher returns. Some crowdlending platforms offer opportunities for larger investments or more sophisticated investment options.

Overall, the suitability of crowdlending for an individual investor will depend on their investment goals, risk tolerance, and overall financial situation. It is important for investors to carefully consider these factors before investing in any crowdlending project or platform.

Tips for first-time crowdlending investors

If you are a first-time crowdlending investor, it can be intimidating to navigate the platforms and determine where to invest your money. Here are some tips to help you get started:

  • Research the platforms: take the time to research the various crowdlending platforms available to you. Look for platforms that have a track record of successful loans, transparent fees, and a user-friendly interface.
  • Diversify your portfolio: don't put all your money into one loan. Spread your investment across multiple loans to reduce your risk. Look for loans with varying interest rates and maturities to create a diversified portfolio.
  • Understand the risks: crowdlending is not without risk, and you should understand the risks involved before investing. Read the loan descriptions carefully, paying attention to the interest rate, loan term, and borrower information.
  • Start small: as a first-time investor, start small with your investment. You can always increase your investment once you are comfortable with the platform and have a better understanding of the risks involved.
  • Stay informed: keep up-to-date with the latest news and updates from the crowdlending platforms you have invested in. This will help you make informed decisions about your investments.
  • Don't chase high returns: it can be tempting to invest in loans with the highest interest rates, but these loans may come with higher risk. Look for loans with reasonable interest rates that match your investment goals and risk tolerance.
  • Have realistic expectations: crowdlending can offer attractive returns, but it is important to have realistic expectations. Don't expect to get rich quick with crowdlending. It is a long-term investment that requires patience and discipline.

By following these tips, you can make informed decisions about your crowdlending investments and increase your chances of success.

Crowdlending in Europe

In recent years, crowdlending has gained huge popularity in Europe. According to a report by the European Crowdfunding Network (ECN), the total market size of peer-to-peer and crowdfunding lending in Europe was €21.9 billion in 2020, with peer-to-peer lending accounting for €9.9 billion of the total. This represents a growth rate of 29% compared to the previous year.

The United Kingdom is currently the largest crowdlending market in Europe, accounting for around 70% of the total market size. However, other countries in Europe are also seeing significant growth in crowdlending. France, Germany, and the Netherlands are among the top five European countries in terms of the total amount raised through crowdlending.

The COVID-19 pandemic has had a significant impact on the crowdlending industry in Europe. The economic uncertainty caused by the pandemic has led to an increase in demand for alternative forms of financing, including crowdlending. At the same time, however, the pandemic has also led to an increase in default rates, which has made investors more cautious.

Regulation of the crowdlending industry in Europe varies from country to country. In general, however, the industry is subject to less regulation than traditional banking and finance. The European Commission has proposed a set of regulations for crowdfunding and peer-to-peer investing platforms in order to create a more harmonized regulatory environment across the European Union.

Overall, the future of crowdlending in Europe looks bright. The industry is growing rapidly, and the demand for alternative forms of financing is expected to continue to increase. As the industry matures, we can expect to see more regulation and standardization, which will provide greater protection for investors and borrowers alike.

Overview of the top crowdlending platforms available in Europe

Crowdlending has been on the rise in Europe, with investors looking for alternatives to traditional banking and investment methods. Crowdlending platforms allow individuals to lend money directly to borrowers, bypassing the need for traditional financial institutions. Here is an overview of the top crowdlending platforms available in Europe.


Mintos is one of the largest peer-to-peer lending platforms in Europe, offering investors the opportunity to invest in loans from borrowers in over 30 countries. Investors can choose from a variety of loan types, including personal loans, car loans, and business loans. Mintos also offers an auto-invest feature that automatically invests funds in loans that match the investor's criteria.


Bondora is a leading peer-to-peer lending platform that has facilitated over €420 million in loans since its inception. The platform offers investors the opportunity to invest in personal loans, with borrowers from Estonia, Finland, and Spain. Bondora has a secondary market where investors can buy and sell loans, providing added liquidity to their investment.


Twino is a peer-to-peer investing platform that offers investors the opportunity to invest in loans from borrowers in Latvia, Poland, Russia, and Kazakhstan. The platform offers short-term loans with maturities ranging from one to 12 months. Twino also offers an auto-invest feature that automatically invests funds in loans that match the investor's criteria.

Paskolų klubas

Founded in 2014, “Paskolų klubas” is probably the largest P2P lending platform in Lithuania. The platform allows you to invest in loans issued to people and businesses. "Paskolų klubas” is firmly established as the market leader in the Lithuanian P2P market and has serious plans to expand its activities across Europe.

Final thoughts and recommendations for investors

Overall, crowdlending can be a lucrative investment opportunity for those who are willing to take the time to research and choose the right platform and investments for their portfolio. However, it is important to keep in mind that like any investment, there are risks involved. Before investing in any crowdlending platform, be sure to consider the factors mentioned above, such as the platform's track record, borrower risk assessment methods, and loan types offered.

Additionally, it is recommended that investors diversify their crowdlending portfolio across multiple platforms and loan types to reduce the risk of default. It is also important to regularly monitor your investments and make adjustments as needed to ensure that your portfolio is performing as desired.

For first-time investors, it is advisable to start with a small investment and gradually increase the investment amount as you become more familiar with the platform and the process. It is also a good idea to invest in lending money with lower risk profiles to start with, such as consumer loans or those backed by collateral. So, with the right research, strategy, and diversification, crowdlending investments can be a valuable addition to any investment portfolio.