Peer-to-peer lending has transformed the alternative finance landscape of Europe. One major study from the Cambridge Centre for Alternative Finance even concludes that the European market for consumer credit sees an annual growth of around 99% per year — with no signs of slowing down in the near future.

While peer-to-peer lending continues to evolve as an alternative source of credit, dozens of new investment marketplaces are now cropping up around the continent attempting to connect these borrowers with hopeful investors eyeing an opportunity to lend their money and earn interest.

As an investor, the result is that your options are now overwhelming.

In a bid to help you find the best peer-to-peer lending platform in Europe, we jumped ahead and did the hard work for you. This guide aims to introduce peer-to-peer lending in an honest manner and break down the best platforms available today, comparing them for trust, yield, user-friendliness, competitiveness, selection of investments, security, and much more.

Need a free euro bank account to fund your investments?

While peer-to-peer lending potentially provides higher returns than traditional investments like stocks, it also carries higher risks. Investors should especially keep in mind the special pitfalls of non-regulated peer-to-peer lending and do their own due diligence.

Considering diving out? Investing in secured real estate loans or trading stocks and ETFs commission free might be more your speed.

But if you acknowledge the risks, have the capacity to select reliable loan originators, and you’re fully prepared to dive in, here are our top picks for the peer-to-peer lending platforms in Europe.

These are the best peer-to-peer lending platforms in Europe

  1. Mintos is the winner. Used by over 300,000 investors worldwide, Mintos is still the number one peer-to-peer lending platform in Europe with €5 billion of total investments, an easy-to-use platform, and 70 loan originators to choose from.
  2. Twino, numero dos. For investors who value stability, a long track record, high business standards, and an all-around great lending experience, Twino boasts 10 years in business, sound financials, and an easy-to-use platform.
  3. Iuvo ranks third. For investors who want licensed platform and attractive annual yields, Iuvo provides a winning experience with buyback guarantees on loans and fully automated portfolio management.
  4. PeerBerry comes in fourth. Claiming 24,000 investors, PeerBerry offers 10% annual returns, a feature-rich platform, and attractive bonuses for large portfolios.
  5. ViaInvest rounds out the top five. From its profitable and officially licensed mother company, the VIA SMS Group, ViaInvest offers investors a wide range of loans from five European countries on its intuitive investment platform.

Our ranking of the 5 best peer-to-peer lending platforms in Europe:

RankP2P PlatformTarget return
#1Mintos12%
#2Twino14%
#3Iuvo9%
#4Peerberry10%
#5Viainvest12%

1. Mintos

#1 Best P2P lending platform in Europe

Best for: Overall

Founded in 2016, Mintos is the largest peer-to-peer lending platform in continental Europe, housing over 260,000 users. Last year alone, the site attracted over 136,000 new investors and paid out €45 million in interest in return. With more than 4.5 billion loans funded through their site, they’re not only the largest player in their vertical, but also provide unparalleled conditions for diversification.

on Mintos’ secure website

Overall, Mintos checks all the right boxes when it comes to user-design, customer support, and selection of asset classes. With a minimum investment of only €10 and a massive loan book of around 60 loan originators, Mintos leaves most competitors staggering far behind and takes the top spot in this ranking of the best peer-to-peer lending platforms in Europe.

Mintos main features

Types of loansPersonal, car, mortgage, businesses
Average interest12.65%
Who can investMost nationalities (except UK citizens)
SecurityBuyback, group guarantee, collateral
Secondary marketYes
Min. investment€10
Founded2015

When it comes to ease-of-use, Mintos is known being an intuitive platform accessible for both beginners and professionals, supporting eight European languages. On top of that, Mintos supports most loan types for investing, including mortgages, car financing, business loans, agricultural loans, and personal loans.

2. Twino

#2 Best P2P lending platform in Europe

Founded in 2009, Twino boasts the longest track record in our lineup. Since inception, the platform has issued close to €1 billion worth of credit and attracted over 20,000 investors from across Europe. Investors can enjoy sound interest rates from 8 to 12% per year, including the benefit of a buyback guarantee or payment guarantee on their investments and a minimum investment of €10.

on Twino’s secure website

By focusing on customers with stronger creditworthiness and introducing new assessment tools, Twino reported a €33m net turnover and landed a €3.6m profit in 2018, as opposed to a 13m loss in the year before. To our liking, Twino recently applied to the Financial and Capital Market Commission (FCMC) – the financial regulator of the Latvian market – for an investment brokerage license, which may introduce an investor protection mechanism of up to €20,000 if granted.

Twino main features

Types of loansPersonal loans, real estate
Average interest12%
Who can investEU citizens
SecurityBuyback, collateral
Secondary marketYes
Min. investment€10
Founded2009/2015

3. Iuvo Group

#3 Best P2P lending platform in Europe

Owned by the large-scale Easy Asset Management Financial Group, a Bulgarian non-bank financial service provider, Iuvo is one of the largest peer-to-peer lending sites in Europe. It joins our top three because it is licensed as a credit intermediary by the national financial supervision authority, is audited by Grant Thorton, has a transparent management team, and has produced positive numbers for a number of years. Last year, the Iuvo platform grew its user base by 82% and brokered €100 million worth of loans.

on Iuvo’s website

Iuvo provides easy access to a variety of investment tools for you to explore. With this platform, you’ll get the industry-standard peer-to-peer lending package with buyback guarantee on delayed payments, rates from 5-15%, primary and secondary markets, as well as other well-known features and functionalities to put your money to good use and spread it across a number of credit originators.

Iuvo main features

Types of loansConsumer, business, cars, mortgages
Average interest9%
RequirementBank account in the EU or AML/CFD equivalent
SecurityBuyback, collateral
Secondary marketYes
Auto-investYes
Min. investment€10
Founded2016

Iuvo’s loan originators are regulated companies overseen by the banking authorities in their respective home countries. Additionally, most are profitable businesses with the latest financial report available for you to view. Loan originators also keep around 20-30% skin in the game, a relatively high number indicating compared to other platforms.

4. Peerberry

#4 Best P2P lending platform in Europe

Originally launched as a side-project of the European mega-lender Aventus, PeerBerry later branched off as a separate marketplace for investors. Close ties remain, as the majority of loans on PeerBerry originate from Aventus, who in turn netted a profit around €13m in 2019.

On average, PeerBerry offers 9.25% annual returns, ranging up to 13%, including buyback and group guarantees on most loans. Financials aside, PeerBerry’s website is beautifully designed, very easy to navigate, and provides an all-around great experience.

Special offer: 0.5% additional interest on your investments for 90 days

on Peerberry’s website

On the compliance level, we’re pleased that Peerberry is submitting its application to become a licensed Investment Brokerage Firm. In terms of transparency, PeerBerry also does an excellent job. Key financial figures and annual reports are provided for every loan originator, with quarterly updates. Moreover, investors have access to individual loan contracts, uninvested funds are kept in segregated accounts, and the management team have answered our questions openly and directly.

PeerBerry main features

Types of loansPersonal, business, cars, real estate
Average interest9.25%
RequirementBank account within the EU
SecurityBuyback, group guarantee, collateral
Secondary marketNo
Auto-investYes
Min. investment€10
Founded2017

5. ViaInvest

#5 Best P2P lending platform in Europe

Owned by the VIA SMS Group, we consider ViaInvest the most reliable offering in our list with around €100m worth of issued loans, a strong focus on Western Europe, 220 employees, and finances audited by BDO. Several parts of the Group is already regulated under different licenses and ViaInvest itself is now applying to become a licensed inveestment brokerage with the Financial and Capital Market Commission.

on ViaInvest’s website

Viainvest offers returns fixed at 12% p.a. from personal loans and business loans, including buyback guarantee after 30 days or collateral security, a short turnaround of around 24 months. Admitted drawbacks include possible tax withholding for Spanish and Czech loans, occasional cash drag, and no secondary market. All in all, we think ViaInvest offers investors excellent tools, transparency, and a long track record in the industry, with a bright future ahead.

ViaInvest main features

Types of loansPersonal, business
Average interest12%
RequirementBank account in the EU
SecurityBuyback, collateral
Secondary marketNo
Auto-investYes
Min. investment€10
Founded2016

Methodology

  1. Regulation: While some companies are licensed, most of the ones we test are not. We believe they should be, and we therefore research to see if they are in the process of obtaining a license with local regulators. Everything else equal, we assign more value to a company with a long operational record.
  2. Transparency: Platforms should openly share their financials, be audited, list key employees and shareholders, and show numbers for their loan originators for public review.
  3. Platform: A proprietary and user-friendly interface built from the ground up is a valuable sign. Other important features include two-step authentication, charting, and customization.
  4. Deposits and withdrawals: Transferring and withdrawing money should be easy and proceed without delay. Clients funds should always be kept segregated and accessible to withdraw at all times.
  5. Markets and lenders: We evaluate if users have access to and can hand-pick high-quality lenders with long and proven track records.

History

During the course of the last ten years, an increasingly large amount of alternative finance providers have cropped up in Europe. Analysts at Cambridge University have showed that the European online alternative finance market grew by 36% to reach €10.44 billion in 2017. Accordingly, there are now around 300 peer-to-peer lending platforms and lending companies in Europe, with almost half operating in the UK, Germany, France, and Italy, while others have cross-border business activity.

As such, it shouldn’t come as a major surprise that consumer lending plays a major role in driving the industry numbers forward. Retail credit underwritten online shot up by close to 100%, and the rising number of loans seem to have no immediate end in sight.

FAQ

What is peer-to-peer lending?

Peer-to-peer (P2P) lending is a multi-billion alternative finance industry aiming to connect borrowers with lenders (investors) directly by means of online services. In Europe, peer-to-peer lending platforms aggregate loans from multiple creditors into one space, where lenders are matched with borrowers according to their risk-profile and other relevant criteria. For investors, European peer-to-peer lending platforms offer an opportunity to receive high returns on investments, as well as the option to create a fixed passive income source.

How does P2P lending work?

Here is a simple breakdown of how peer lending works:

First, an alternative finance provider lends out money to a person or company in need of credit. Next, the company takes the loan contract underwritten by the borrower to a peer-to-peer lending platform for individuals and companies to invest in the loan. The creditor does this to free up capital in the company in order to issue more loans.

During the process, investors sign a contract, that is usually generated automatically by the platform, between themselves and the borrower. This way, the investor holds a claim directly against the debt of the borrower, who promises to pay back the loaned amount with interest. Lastly, when the borrower pays back the money to the creditor, the money is sent on to the investors of the platform.

What kind of loans can I invest in?

In essence, there are three basic types of peer-to-peer loans to invest in: Consumer loans, real estate loans, and business loans.

What are loans for real estate?

If you want to invest in loans for real estate, you want to explore the concept of ‘real estate crowdfunding’. This is a new and rewarding type of investment choice that connects private investors with real estate developers.

Investing in loans for property is usually more secure than personal loans, as these loans are collateralized, meaning the borrower pledges an asset as security to the lender in the case that the borrower fails to pay back the borrowed amount. Investing in collateralized property loans give lenders a higher level of reassurance against failed project, as the pledged asset will be sold off to get back the lost value.

What are bridge loans?

Investing in bridge loans falls under the category of loans for property. Bridge loans is a type of short-term loan, usually given to a company, until it secures financing through a bank at a lower interest rate. That said, investing in bridge loans are usually as rewarding as investing in real estate development loans, as bridge loans have high interest rates.

Are personal and micro loans a good investment?

Investing in personal loans or micro loans is a straight-forward process that can be highly rewarding with the right amount of planning. Personal loans and micro loans can return up to 16% per year on the investment and often produce a monthly yield, making them great for a short-term portfolio.

Is P2P lending ethical?

Personal come with a number of ethical downsides that are worth considering before jumping in, including extreme interest rates charged to borrowers. Some might find it more comfortable to invest money in real estate or small business loans.

What is P2B Lending?

If you’re looking to invest in small business loans, one of the easiest ways to make money off small business loans comes through the method of peer-to-business lending. Though often not considered as safe as investing in property loans, small business loans mostly have higher returns. That said, business loans can also be collateralized which will decrease the overall risk of losing money.

Is P2P lending safe?

Like all types of investments, the safety of peer-to-peer lending depends on your risk-willingness and ability to do proper research. Experts often suggest that new investors start off by buying a couple of loan shares with conservative rates, and not walk headlong into something they don’t fully understand. To put it differently, don’t lend all your money to one single borrower, and hedge your stake by investing small amounts in multiple independent loans on different platforms.

What are the risks of P2P lending

Investment risk varies among different asset classes in peer-to-peer lending. In general, experts consider collateralized loans, such as mortgage-backed real estate loans and business loans, more secure than short-term personal loans. However, there are more factors to keep in mind when investing loan shares:Lack of diversification, borrower defaults, loan originator (creditor) goes bankrupt, platform goes bust, risk of fraud.

Is P2P lending regulated in Europe?

The European Union is working on a common regulatory framework for peer-to-peer lending for all its member states. Until then, peer-to-peer lending activities are regulated by the individual countries. It is mostly the local financial conduct authority or national bank who regulates and authorises peer-to-peer lending platforms, like the FCA in the UK and AMF in France. However, some countries have no specific licence for peer-to-peer lending, such as Estonia.

Author

About the author: Lucas P., a pen name for privacy reasons, is an investor, hobby finance writer, and die-hard FIRE enthusiast. Lucas has previously served as editor for a news outlet in his European home country but now spends his time dabbling with traditional and alternative investments. To learn more about Lucas, visit his profile page.