Lendermarket review July 2022 – Great returns, poor transparency and questionable reliability

Lendermarket currently offers two kinds of loans :

• consumer loans
• business loan backed by real-estate, which were introduced in May 2022

Although these two loans kinds are fundamentally different, both offer monthly repayments and are covered by a buyback guarantee. They also share the same minimal investment of €10, which is a very standard amount for P2P loans but smaller than usual for business loans.

Consumer loans make up the sheer bulk of the loans volume.

Like on most platforms, interest rates at Lendermarket vary depending on supply and demand. Initially, the interest rate was a uniform 12% for a duration of one month or less. They were later set depending on the borrower’s country. As of July 2022, they mostly range from 14% to 15%. The differences are usually minor from one country to another. However, Finland usually offers the lowest interest rates, whereas they reach 16% in Estonia.

Overall, interest rates at Lendermarket have consistently been at least one or two points higher than most competitors. Currently, only Esketit usually offers the same level of interest rates (14% for Jordan loans); however, the loan originator behind these loans isn’t profitable.

For a long time, interest rates were roughly be correlated with the duration. Indeed, loans with the highest interest rates used to be very long-term – up to six years ! -. However, it’s now possible to find 15% loans with a duration of one month.

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; these include Czech Republic, Finland, Estonia, Sweden and Denmark.

In May 2022, loans from Credory were introduced on the platform.

Compared to consumer loans, they have larger amounts (roughly up to €50,000). Their durations vary from six months to one year, and the annual interest rates range from 8% to 9%.

These loans are collateralised with real-estate, which in theory makes them safer than consumer loans. The LTV The LTV (Loan-To-Value ratio) is simply the ratio between the loan amount and the collateral value, expressed as a percent. Smaller values indicate safer loans, where the collateral value greatly exceeds the borrowed amount. LTV values around 50% – 60% are usually regarded as safe. for these loans unfortunately isn’t displayed. According to the description of the loan originator, its stands below 65%, a decent level.

To be blunt, I fail to see the point of these loans, as the risk/reward ratio is very poor in my opinion. Why invest in loans from a lesser-known entity which doesn’t make money with Moncera offers equivalent or higher interests and a much higher reliability ?

The platform regularly initiates cashback campaigns. They are a very effective way to boost returns. For example, a campaign which tool place in November 2021 granted investors a 2% bonus for investments larger than €1,000.

More recently, new investors could earn 2% cashback when investing in loans with a maturity longer than 11 months.

Yet another 2% cashback campaign was launched in Spring 2022. However, the conditions were overly restrictive. First, one had to explicitly enroll in the campaign before investing – something that’s easy to do but actually easier to forget ! -. In addition, all funds have to be invested until the end of July. This means that even previous funds cannot be withdrawn.

Overall, the cashback campaigns illustrate perfectly the way Lendermarket somehow manages to turn something positive into a huge mess. Indeed, investors in most platforms would normally welcome the opportunity to earn more. However, in Lendermarket’s case, campaigns always end up attracting concerns regarding either the restrictive terms & conditions, or CreditStar’s supposed inability to attract funds from other sources.

Lendermarket only provides partial data regarding the loans volume or their investors’ base. The latest available figure is a funded amount above thirteen million euros for May 2022. The total funded volume on the platform stands above two hundred and sixty million euros.

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 has become the de-facto delay in the industry. The buyback guarantee covers both principal and accrued interests.

The buyback guarantee also applies to business loans, which is somehow uncommon. However, please remember that the buyback guarantee is only meaningful for reliable loan originators.

In spite of the controversies, Creditstar remains a financially solid entity, so I trust their ability to fulfill their obligations when it comes to the buyback guarantee. I unfortunately can’t say as much about Credory. I thus again reiterate my opinion that investing in Credory loans is a risk not worth taking.

When investing in consumer loans, it’s essential to assess the reliability of the loan originator. As most of the loans volume at Lendermarket comes from Creditstar loans, I will mostly focus on this entity. It’s especially important as although this large lending group is profitable, recurring concerns regarding the reliability of their financial reports and their supposed lack of liquidity have damaged its reputation.

Lendermarket was started by originator CreditStar in order to fund its loans portfolio. It’s similar to Moncera (which is owned by Placet Group), Robocash Group’s P2P platform Robocash, StikCredit’s Afranga or Cream Finance’s Esketit

For a long time, very few details have emerged about Lendermarket’s team. Then, out of the blue, Lendermarket’s new CEO Endrik Eller posted a message on the platform’s Telegram channel regarding their plans for the future.

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

• Lendermarket’s website finally introduces the platform’s management team, along with links to their LinkedIn profile.
• 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]. This was confirmed by CEO Endrik Eller in his initial message.
• Finally, it’s worth noting that although the platform is incorporated in Ireland, employees are actually based in Estonia – P2P Empire’s Lendermarket review indicates that the platform shares the same office as Lendermarket -. According to Lendermarket’s Investor & Affiliate Relations Specialist, the decision was based on both regulatory and practical considerations. Indeed, the platform required an English-speaking environment, which would make it easier to communicate with the regulators.

Looking on the bright side, Lendermarket provides an audited report for 2020. It was audited by GrantThornton, and shows a loss of more than €400,000. Please keep in mind that this is the financial report for the platform itself, not the loan originators ! As I’m updating this review in July 2022, the report for fiscal year 2021 isn’t available yet.

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

However, it’s not a big deal, as P2P loans are rather standard.

Apart from Credory, all loan originators at Lendermarket are subsidiaries of Creditstar Group (one per country). This large lending group also provides a group guarantee. This means that even if a loan originator defaults, the parent company will cover the liabilities.

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. There’s no detailed financial data for each country, as only consolidated figures for the whole group are available. However, the platform now provides a detailed overview for each loan originator – a very welcome addition -.

Among other figures, it lists the loans volume and average interest rate as well as a brief description of the loan originator.

Creditstar Group used to be regarded as a solid loan originator. For a long time, it was rated 72/100 on Explore P2P’s ratings for Mintos originators. It thus stood among the highest rated lending groups, right after Robocash and Moncera‘s Placet Group. However, it has since dropped to 64/100, a level equivalent to Afranga, ViaInvest, or Esketit. What’s worse, they seem to be increasingly distrusted by investors.

Let’s start with the positive aspects :

• CreditStar has been profitable since its inception. In spite of the first Covid-19 wave, the company’s profit for 2020 stood around 6 million euros. Even better, unaudited net profit for 2021 is roughly seven million euros. Unfortunately, the financial report for 2021 hasn’t been released yet.
• In May 2022, the group also successfully completed two bond issuances for a total of thirty million euros. Because of the large amount required to invest in bonds, only financial institutions or high net worth individuals invest in them. The fact that these financially savvy people and firms trust Creditstar gives it a lot of credibility.

On the negative side, CreditStar’s reputation suffered from controversies regarding their financial reports – a seemingly never-ending saga which lead many investors to leave the platform -. Let’s try summarize to it :

• It all started when blogger Kristaps Mors pointed out that CreditStar’s annual financial reports for 2019 were actually audited by a second-rate firm. Worse, the auditor actually lost its license in December 2019 ! Understandably, this issue has stirred a lot of controversy.
• During a much-awaited webinar hosted in May 2021, CreditStar finally confirmed that reputable auditing firm KPMG was currently preparing the financial report for 2020. Unfortunately, it basically took forever to be completed and was only released in December 2021.
• Although the figures contained in the report aren’t bad, it contains a qualified audit opinion by the auditor. It’s basically a statement that there’s an issue with part of the report. Indeed, CreditStar reevaluated the value of assets in 2019 and 2020. This isn’t permitted by accounting standard, which casts a doubt regarding the reliability of the report.

Another concern is the frequent surge of pending payments – that is, funds reimbursed by the borrower but not transmitted by CreditStar to the platform -. They’re mostly visible for Mintos investors; as of July 2022, they reached height million euros, a very high level.

Credory loans are available on the platform since Spring 2022.

The only available financial report for Credory is for Q1 2022. It wasn’t audited, and shows a loss of roughly €25,000 for 2021, and a tiny gain of €3,000 for Q1 2022. They’re not exactly groundbreaking results, and don’t incite me to trust this lender !

Data regarding Lendermarket‘s loan book is available… but it’s well hidden. Indeed, unlike most competitors, the platform doesn’t have a dedicated statistics page. Instead, they use the blog to regularly publish up-to-date figures. The most recent statistics were published in June 2022.

The list of available loans is available even for unregistered investors.

Apart from a blog post, Lendermarket didn’t communicate much regarding the war in Ukraine. However, CreditStar is unlikely to be impacted. Indeed, this lending group doesn’t issue loans in Russia, Ukraine or Belarus. The same holds true for Credory.

As we will soon see, Lendermarket’s website is great in terms of ergonomics and design. However, the platform sometimes suffers from severe technical problems.

Indeed, in September 2021, there was a large and unexpected wave of loans buyback. It turned out that they weren’t triggered by the originator, but caused by a bug. As a result, several disgruntled investors withdrew their suddenly available funds and left the platform. In spite of several messages from investors on Telegram, the platform took several hours to react. The website went offline for a whole weekend, and the accounts were finally restored to their previous state. While I understand that bugs can happen, the platform’s reactivity was poor and the communication was minimal. Even after the service was restored, there was no formal communication or post-mortem.

A few days later, investors were unable to login for several hours.

In both cases, Lendermarket’s communication could have been much better, both before and after the incident.

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. For a long time, only two filters are currently available : interest rate and loan term. However, since February 2021, it’s also possible to filter by country, which was a long-standing request from investors. – image: 8242

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 breeze.

In February 2022, a nice new feature was added. Indeed, the screen now displays a summary of the loans available during the previous 7 days. This allows to efficiently setup the auto-invest and prevent idle funds.

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.

Another possible improvement would be to display the number of loans matching the configuration. This handy feature is actually available at most competing platforms, so it’s surprising that Lendermarket didn’t implement it.

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.

Currently, one can still find CreditStar loans on Mintos. This situation may not last for long, as Creditstar now seems to focus mostly on Lendermarket.

Loans usually yield more at Lendermarket than at Mintos. Moreover, loans from several countries are available exclusively at Lendermarket.

However, after the interest rates increase caused by the war in Ukraine, they tend to stand at the same level on both platforms.

Another difference between Lendermarket and Mintos is that there’s no grace period at Lendermarket. 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 at Lendermarket. Indeed, reimbursements are immediately credited back to your investment account.

One advantage of Mintos is the presence of a secondary market, which isn’t available at Lendermarket. Investing in CreditStar loans through Mintos will thus allow them to to sell their loans – although it will incur a fee -.

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 ! -. However, because of the lack of a secondary market, investors who may need their money at some point are probably better off investing through Mintos.

Lendermarket’s website was initially only available in English. Things have now improved with the availability of two additional translations : German and Spanish.

The registration process took me 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.

Currently, it’s only possible to fund your investor’s account via a SEPA transfer. Funds as credited as soon as they’re received, which takes one day for me.

Withdrawing money from the platform is free. According to Lendermarket‘s FAQ, they need 3 days to be processed. In addition, since May 2021, there’s a €50 minimum amount for withdrawals.

Since early 2022, Lendermarket’s website supports two-factor authentication (2FA). After activating this optional feature, logging in will require a temporary code provided by Google Authenticator in addition to your password.

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 !

The platform changed the color scheme of their website in early 2022, from red tints to purple ones. I regret the previous colors but it’s obviously a matter of personal taste.

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.

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.

Communication isn’t exactly Lendermarket‘s forte. Indeed, for a long time, the platform was extremely quiet.

The platform’s blog – which was initially hosted on Medium – saw very few posts in 2020. However, it’s now hosted on the platform’s website and gets regular updates. As previously pointed out, public statistics are available as blog posts.

On a positive note, Lendermarket’s business manager used to be rather active on Lendermarket’s unofficial Telegram group. She’s obviously did her best to answer investors’ questions, but seemed to be limited by the amount of information that the platform and Creditstar were willing to give away. Unfortunately, since the new team was introduced in Spring 2022, she left the company and hasn’t been replaced. As a result, there’s basically no more direct communication between Lendermarket and investors through Telegram. It’s obviously a pity as it increases frustrations and misunderstandings !

For a long time, communication by e-mail from the platform was also very limited. It mostly consisted of marketing offers, and actual information is very limited. However, things have slightly improved. For example, the introduction of the recent loans summary in the auto-invest screen or the interim report for Q4 2021 were mentioned in a recent communication.

Finally, notifications from the platform 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 via a chat box or by email. I didn’t have the opportunity to get in touch with them yet.

I created my Lendermarket portfolio in November 2019

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.

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.