Excerpt of the loans listing at Lendermarket

Lendermarket review

Lendermarket’s overview

Lendermarket allows to invest in short-term individual loans yielding 14% annually; they’re secured by a buyback guarantee.

My opinion on Lendermarket

Thanks to 14% interest rates, very reliable loan originators and a simple but effective website, Lendermarket’s offer is very appealing.

Detailed ratings

Actual performance

My Lendermarket portfolio hasn’t reached its full potential yet, as I have several former loans yielding 12% instead of 14% for the new ones.

Loans liquidity

Although all loans come from a reduced set of originators, there are many of them.

Reporting

The reporting is very simple but effective given the simplicity of the offer.

Transparency & reliability

I appreciate the reliability and financial solidity of the loan originators – although the lack of a serious audit is concerning -. More detailed information could also be provided regarding the platform itself.

Website ergonomics

Lendermarket’s website sets the bar very high in term of ergonomics and ease of use.

Lendermarket’s pros & cons

Pros

  • Very reliable loan originators
  • High interest rates for high-quality loans
  • Extremely user-friendly interface

Cons

  • No secondary market
  • Very little information is disclosed about Lendermarket
  • CreditStar financial reports aren’t audited by a reputable firm

Special offer

From from 15 September 2020 until 31 October 2020, a 2% cashback will be granted on all deposits.

Loans characteristics

Loans duration

Short-term : one month or less

Medium-term : one month to one year

Long-term : more than one year

Loans kinds

Individual

Minimal investment

€ 10

Buyback guarantee

Buyback guarantee available

Currencies

EUR – Euro

Overview of Lendermarket’s loans

All loans on Lendermarket are in Euro. Initially, the interest rate was a uniform 12% for a duration of one month or less.

However, in March 2020, the platform increased the interest rate to a very interesting 14%. This may be a consequence of the lower demand from investors caused by the coronavirus. Durations have also increased a lot. Indeed, although it’s still possible to invest in short-term loans as of August 2020, many loans on the platform also have durations between three and five years !

When the platform started operating, borrowers lived either in Spain – a country which is highly impacted by the Covid-19 – or in Poland. Loans from other countries were introduced in April 2020; they include Czech Republic, Finland, Estonia, Sweden and Denmark. All these loans yield interests monthly.

Excerpt of the loans listing at Lendermarket
Excerpt of the loans listing at Lendermarket

The minimal investment is € 10, a very standard amount for P2P loans.

Loans volume

While Lendermarket currently doesn’t provide statistics regarding the loans volume, there’s a very large number of loans available (slightly more than three thousand as I’m updating this review in August 2020).

Buyback guarantee

The delay for the buyback guarantee A buyback guarantee is a guarantee provided by the platform or a loan originator.
If repayment of a loan is delayed by more than a given delay (usually 30 or 60 days),
the platform or loan originator will buy back the loan. The guarantee may cover only
part of the capital, or in a much more interesting case, both the capital and accrued
interests. As the conditions vary from one platform to another, it’s very important
to check this point.
is 60 days, which is a bit longer than for most competitors. The buyback guarantee covers both principal and accrued interests.

Platform’s transparency and reliability

Overall, I appreciate the reliability of CreditStar group, which provides all loans on the platform. On the other hand, I regret the lack of information about Lendermarket.

Lendermarket’s background and team

Lendermarket was started by originator CreditStar in order to fund its loans portfolio. It’s similar to Moncera (which is backed by Placet Group), or Kviku‘s P2P platform.

It looks like large originators now start their own platforms instead of using marketplaces like Mintos or Viventor.

Although it provides a lot of information about CreditStar, Lendermarket’s main weakness is the lack of information regarding the platform itself.

  • Unlike most other crowdlending platforms, Lendermarket’s website doesn’t introduce its team.
  • The platform also doesn’t have a LinkedIn page (however, a few employees or ex-employees have profiles there).
  • The exact relationship between Lendermarket and CreditStar isn’t disclosed. However, in an interview with ExploreP2P, their business manager explained that Lendermarket and Creditstar Group are sister companies, both belonging to the same ultimate beneficial owner [founder Aaron Sosaar].
  • Finally, no reason is provided for the incorporation in Ireland. Indeed, employees are actually based in Estonia. According to P2P Empire, the platform shares the same office as Lendermarket.

Loans descriptions

Unlike most other P2P platforms, only very basic data is provided about the borrower.

Loan detail at Lendermarket
Loan detail at Lendermarket

However, it’s now a big deal, as P2P loans are rather standard.

Loan originators reliability

The loan originators at Lendermarket are one of the platform’s great strengths. Indeed, they’re all subsidiaries of Creditstar (one originator for each country). This large lending group is overall regarded as financially solid.

Creditstar also issues loan on Mintos – although the volume there is rather reduced now that they mostly appear at Lendermarket -. It’s rated B by Mintos, and 76 out of 100 on Explore P2P’s ratings for Mintos originators (as of August 2020).

Lendermarket does a good job at providing information about Creditstar. Indeed, both a company presentation and the latest annual report are available for download on the website. However, there’s no detailed financial data for each country, as only consolidated figures for the whole group are available.

CreditStar has been profitable since its inception. In August 2020, unaudited Creditstar results for Q2 2020 became available. The main information is that the group remained profitable in spite of the coronavirus, which is very encouraging.

On the negative side, blogger Kristaps Mors pointed out that CreditStar’s annual financial reports were actually audited by a second-rate firm. Worse, the auditor actually lost its license in December 2019 !

Reporting & statistics availability

I regret that there’s virtually no information available about Lendermarket’s loan book. The platform doesn’t even display basic information such as the total loans volume or the number of investors.

However, even prospective investors can view the available loans on the website.

Track record

As Lendermarket is a fairly new platform, it’s hard to evaluate its track record. However, CreditStar’s own track record is excellent, so I expect the same for Lendermarket.

Communication & support

Communication isn’t exactly Lendermarket’s forte. Indeed, the platform is unusually quiet.

For example, Lendermarket started a blog which is hosted on Medium. Two posts were published in April. One introduced the blog, and the other was a letter from CreditStar to investors. However, there hasn’t been any new publication.

E-mail communication from the platform is also very limited; the last news I received date back from late May.

Notifications from Lendermarket are configurable : it’s possible to choose the frequency of the summaries, be notified of deposits, and choose whether to receive marketing offers.

It’s possible to reach Lendermarket’s support by phone or email. I didn’t have the opportunity to get in touch with them yet.

Impact of Covid-19 outbreak on Lendermarket

One very visible consequence of the coronavirus pandemic is the increase of interest rates, from 12% to 14%. Several competitors such as Swaper or Robocash had similar moves. These higher rates reflect the higher demand from borrowers while investors get more wary about investing in loans, as well as the increased risk of default.

Also, as many borrowers are located in Spain, existing loans from Lendermarket are obviously impacted by the Covid-19 outbreak. As a result, many of them get extended. I also noticed that the percentage of current loans in my portfolio has dropped very significantly; at some point it stood at around 15%, compared to more than 90% earlier ! However, the situation has now improved a lot. Indeed, 75% of the loans are current.

Lendermarket versus Mintos

Currently, one can still find CreditStar loans on Mintos. Unlike the uniform interest rate on Lendermarket, CreditStar’s interest rates on Mintos vary from one country to another. Indeed, they range from 10% in Finland to 14.5% for Estonian loans.

Another difference with Mintos is that there’s no grace period. On Mintos, loans from CreditStar have a 3-days grace period (excepted in Estonia); interests during this time won’t be paid if the borrower is late.

Also, there’s no pending payment : reimbursements are immediately credited back to your Lendermarket investment account. Overall, it seems more interesting to invest directly through Lendermarket, rather than on Mintos – especially in the current economic climate, where many reimbursements may be delayed ! -.

Platform’s features

Early exit

Early exit NOT AVAILABLE

Investing methods

Auto-invest

Manual investing

Manual investing at Lendermarket

As always, I recommend using the auto-invest feature rather than investing manually. However, it’s still possible and easy to invest manually at Lendermarket, through the “Loans listing” screen. Only two filters are currently available : interest rate and loan term.

Auto-invest

Like basically everything on Lendermarket’s website, the screen for auto-invest is very well designed. As a result, configuring it is really straightforward – especially because nearly all fields are pre-filled correctly -. Even for beginner investors, setting it up properly will be a will a breeze.

Lendermarket's auto-invest configuration
Lendermarket's auto-invest configuration

One minor improvement I’ve requested to the platform is to add a confirmation before deleting an auto-invest. I clicked by mistake on the “Delete” instead of “Edit” and my auto-invest was gone ! Luckily it was a trivial task to re-create it.

Secondary market

There’s no secondary market on Lendermarket. It wasn’t a concern initially as most loans were short-term. However, now that much longer maturities are available, it can be problematic to be stuck with a loan for such a long time.

In consequence, investors who may need their money at some point are probably better off investing through Mintos. Investing in CreditStar loans through this marketplace will allow them to to sell their loans – although it will incur a fee -.

Website’s ease of use

Languages

English

Funding methods

Lendermarket’s registration process

The registration process took very little time. Even the KYC KYC (Know Your Customer) checks are procedures used by financial businesses
in order to verify the identity of their clients. Most Crowdlending platforms will require
a copy of an identification document (identity card, passport, driving licence); an utility bill
or bank statement may be necessary as well.
process which sometimes drives me crazy was painless, as it uses Veriff. The platform validated my document in one day.

Account funding and funds withdrawal

Website’s design and ergonomics

I really appreciate the design and ergonomics of Lendermarket’s website. It’s very readable, easy to navigate, and all features are extremely easy to use. It’s without a doubt one of the most user-friendly P2P lending website I’ve ever reviewed !

Available languages & translations quality

Currently, Lendermarket’s website is only available in English.

Reporting

Lendermarket’s dashboard is simple and readable; it shows basic statistics about the loans portfolio. I however regret that it displays the average interest rate of the portfolio instead of the actual performance.

In addition, the website also offers the usual reporting features, such as the investments list and account statement. For some reason, although the investments list can be downloaded, it’s not the case for the account statement.

Documentation

The description of the investing process is clear although not extremely detailed. On the other hand, the FAQ A FAQ is simply a compilation of Frequently Asked Questions is very complete.

Actual performance of my Lendermarket portfolio

13,43%

At the end of August 2020, the XIRR for my Lendermarket portfolio was 13,43%.

Although the performance of my Lendermarket is still below its theoretical value, it increases steadily. However, it should take some time to actually reach it as I plan to increase the size of this portfolio - which means the performance may actually decrease for some time -

Don't hesitate to read my most recent crowdlending portfolio review for detailed platforms performance comparison as well as historical performance.

Portfolio creation date

I created my Lendermarket portfolio in November 2019.

Lendermarket's main competitors

For a detailed comparison of the different p2p-lending marketplaces, check out this article.

Lendermarket's facts & figures

Location

Dublin, Ireland

Founded in

2019

As of August 2020

Who can invest at Lendermarket

We invite both individuals and companies to invest through Lendermarket platform. Individual investors are required to:

  • be at least 18 years old,
  • have a personal bank account in the European Economic Area or Switzerland
  • and have their identity successfully verified by the Lendermarket team.

Family trusts, partnerships, limited liability companies, and other organizations must have a bank account in the EEA or Switzerland.

Lendermarket's FAQ

In conclusion...

Lendermarket seems to me like an excellent way to invest in CreditStar loans directly, instead of using Mintos. Even beginner investors will be able to invest in quality loans, as part of a diversified portfolio.

Disclosure

Please note that this review may contain affiliate links. It means that I will earn a commission if you decide to invest after clicking through the link – at no additional cost to you, of course -. Please understand that I have experienced all of these companies, and I recommend them because they are helpful and useful, not because of the commissions I make if you decide to invest through my links.

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