Advertised Rate vs What Investors Were Actually Paid

Why the advertised number is not what you get

A platform shows 11 percent on its homepage. You put in EUR 5,000, wait a year, and your account statement says you earned 8.2 percent. The missing 2.8 points did not vanish through fraud or hidden charges in most cases. They disappeared through three ordinary mechanisms that affect every P2P lender.

First, borrower defaults. The platform prices loans assuming a certain percentage will not repay in full. The advertised rate already includes that assumption, but recovery rates vary. If the platform collects 60 percent on a defaulted loan when it priced for 70 percent, the shortfall comes out of your return. Collateral helps, but selling a mortgaged property in a weak market or chasing a business borrower through insolvency takes time and money, and both eat into what you recover.

Second, cash drag. Your money sits uninvested while you wait for loans to fund or for repayments to be reinvested. Auto-invest reduces this, but even the fastest systems leave gaps. Manual selection makes it worse. If 10 percent of your portfolio sits at zero yield for an average of 30 days across the year, that costs you roughly a full percentage point even if every loan performs perfectly.

Third, fees. Platforms deduct service fees, payment-processing charges, or currency-conversion spreads before the interest reaches your account. A one percent annual fee on a 10 percent gross return leaves you with nine percent before you account for defaults or cash drag. Some platforms advertise the gross figure, others the net. Few make it obvious which number they are showing.

What normal looks like

Across the European market in 2026, a gap of one to three percentage points between advertised and realised return is standard. A platform showing 10 percent typically delivers seven to nine percent. A platform showing 15 percent delivers 12 to 14 percent. Anything tighter than one point suggests either very high origination quality, a short track record that has not yet seen a downturn, or an advertised figure that was already net of the obvious costs.

Maclear advertises 14.5 to 14.9 percent and has delivered figures within that range in practice. That tight match reflects a model where the platform CEO covered the single recorded default in full, keeping realised returns at the advertised level. Whether that holds across a larger default volume is a separate question, but the historic gap is near zero.

InSoil advertises around 13 percent but has historically realised roughly 4.5 percentage points under the advertised figure, putting actual investor returns closer to 8.5 percent. That wide gap comes from agriculture lending, where collateral recovery on defaulted loans takes longer and costs more than in other asset classes, and where seasonal cash drag is higher because planting and harvest cycles do not align with when investors want their money working.

Twino advertises 10 to 13 percent. Realised returns over the past two years have clustered around the lower end of that range, with investors reporting figures closer to 10 percent after accounting for the tail of legacy Russian exposure and the cost of exiting loans that no longer fit the platform's risk appetite. The gap is within the normal band, but it sits at the wide end of normal.

When the gap signals trouble

A gap above four percentage points means something is wrong. Either default rates are far higher than the platform priced in, or cash drag has become structural because loan demand is weak, or fees have increased without the advertised rate being updated to reflect them. Gaps above eight points are a red flag. They suggest that the platform's published statistics no longer describe what most investors experience.

Reinvest24 advertised around 14.6 percent before withdrawals froze in February 2024. Investors who tried to exit in the months before that reported realised returns in the low single digits or negative figures, a gap of more than 10 points. That gap did not appear overnight. It widened over 18 months as property valuations fell, loan repayments stalled, and the platform prioritised new funding over existing investor liquidity. The advertised figure stayed constant while the realised return collapsed.

EstateGuru shows a similar pattern in 2026. The platform advertises around 10.4 percent, but roughly 60 percent of its portfolio sits in recovery. Investors who joined in 2023 or 2024 report realised returns well below the advertised figure, with some seeing negative returns after write-downs. The gap reflects a workout phase where the platform is managing legacy defaults rather than originating new performing loans at scale.

How to read a platform's return record

Ask for the net annualised return after defaults and fees, not the gross interest rate on performing loans. Some platforms publish this in an annual investor report. Others show a histogram of what percentage of their user base hit which return band. A histogram that shows 40 percent of users between nine and 11 percent, 30 percent between seven and nine percent, and 20 percent below seven percent tells you more than a headline figure of 10 percent.

Look at the date range. A platform that shows realised returns for the past 12 months gives you current information. A platform that shows returns since inception but launched in a low-default environment is showing you a figure that may not repeat. Returns realised in 2020 to 2022, when interest rates were near zero and origination standards were loose, do not predict what you will earn in 2026.

Check whether the figure includes reinvested interest or cash returns only. Compounding matters. A 10 percent return compounded monthly is worth more than 10 percent paid annually and left uninvested. Platforms that auto-reinvest daily give you the compounding benefit; platforms where you must manually reinvest do not, and that adds another half-point to the gap for most investors.

The subtract-three rule

Here is the habit that works. Take the advertised rate, subtract three percentage points, and ask yourself whether you would still invest at that lower figure. If the answer is no, do not invest. If the answer is yes, proceed, and treat anything above that reduced figure as upside rather than expectation.

A platform advertising 12 percent becomes a nine percent proposition. If nine percent does not justify the liquidity lock and the credit risk, move on. A platform advertising 18 percent becomes 15 percent. If you need 15 percent to make the trade worthwhile, the platform might fit. If you were only interested because of the 18 percent headline, you are paying for marketing rather than mathematics.

This method is conservative, but it is honest. It assumes defaults, cash drag and fees will behave the way they have across the European market for the past decade. Platforms that beat the three-point penalty give you a margin of safety. Platforms that meet it give you what you expected. Platforms that miss it by a wide margin reveal themselves early, before you have committed a second tranche of capital.

Tools and next steps

Use the return calculator to model what a given advertised rate becomes after you apply a default assumption, a cash-drag percentage, and a fee load. Input the advertised figure, set defaults at two to four percent for consumer loans or one to two percent for secured property lending, assume 10 percent of your capital sits uninvested at any moment, and deduct one percent for fees. The calculator shows you the net figure, and that net figure is what you should compare across platforms.

Read what a default actually costs to understand why a five percent default rate does not simply subtract five points from your return. Recovery, time-value drag, and concentration all matter. Then check Maclear's review to see how one platform kept its realised return in line with its advertised range, and InSoil's review to see where a 4.5-point gap comes from and whether the lower realised return still justifies the risk.

Capital at risk. P2P lending can lose part or all of the money you invest. Advertised returns are targets, not guarantees, and realised returns are normally lower. No compensation scheme covers borrower defaults. Nothing here is investment advice.