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Loanpad Review
Even in the worst possible economic and property-market conditions, Loanpad remains the place for your money during an Armageddon situation.
Loanpad's Premium Account/Premium IFISA received an Exceptional 3/3 4thWay PLUS Rating.
This account has been paying 6.3% interest after zero bad debts.
Visit Loanpad* or keep reading the Loanpad Review.
When did Loanpad start?
Established in 2018, lenders have lent around £326 million by the start of spring 2025.
It’s mostly residential properties for development, including for conversion, extension and refurbishment, or bridging loans, which means short-term property lending.
There are smaller numbers of loans against commercial or mixed-use properties.
What interesting or unique points does Loanpad have?
Lenders through Loanpad* buy the safest slice of these loans, so that the property’s must typically fall by about 50%-60% of the valuation before lenders can expect to lose any money on that loan.
Partner lending companies keep the riskier part of every loan, taking the first loss above yours typically of the first 25% of losses or even more. That’s massive. When other UK P2P lending companies arrange for first-loss protection for lenders, it’s usually just 5%.
With very few loans suffering severe problems, and with lenders’ money automatically spread across all existing loans, and regularly redistributed, the risks are better contained here than at any other P2P lending or IFISA provider.
Loanpad built an excellent reputation for continuing to be able to allow lenders to sell their loans and withdraw swiftly. It’s even better known for offering lenders the opportunity to easily lend either very large or very small sums of money – always spread across hundreds of loans.
How good are its loans?
You are the senior lender in all Loanpad loans, meaning that if a property needs to be repossessed and sold, and not all the borrower’s debt is recovered, there are other lenders elsewhere who will lose all their money first.
In that event, lenders using Loanpad will get all their money back, as well as all the interest due to you, before any other lenders receive a penny.
56% limit on the amount lent versus the property price
Loanpad* limits its loans to 56% of the property valuation, so the property needs to sell for far less than its valuation in order for you to lose any money.
In order to stay competitive, Loanpad has just freshly raised this limit from its prior cap of 50%. However, the average today remains closer to 43% and has historically been 41.8%.
Both that new maximum limit and the average lent are startlingly good, because typical industry averages are 70% to 80% maximum with an average lent of around 60%-65%.
Property development lending
When the loan is on a property development, Loanpad initially caps the amount lent to 56% of the starting valuation of the undeveloped property. Developers receive their money in tranches as they successfully complete each phase. Lenders will still lend less than 56% of the valuation throughout.
Only once a development is over three-quarters complete does Loanpad relax that very high standard somewhat. Loanpad then caps the amount lent at 56% of the hoped-for sale price.
Development loans that have reached this stage currently average 33.5% of the hoped-for sale price, which is half as much (twice as good) as normal for these kinds of loans.
Loan extensions are common
The one minor result that I still want to see is how many of Loanpad’s loans that it has extended eventually officially become bad debts that need to be recovered through legal means. I’ll be updating the Loanpad review regularly as those are resolved.
Fully a third of outstanding loan tranches have needed to be extended, as of March 2025, and by an average of 14 months.
This is currently pretty normal in the wider market, as developers have had a variety of issues to face. Loanpad’s extensions will turn out to be safe and reasonable with few losses.
In Loanpad’s case, just nine loans out of 210 from 2022 are still live and extended, and none are bad debts, even though that was a year with lots of extensions. So Loanpad has already got good history there in showing ultimate full repayment.
How much experience do Loanpad’s key people have?
Loanpad’s key decision maker was a property lawyer who built up a lot of lending contacts, such as Loanpad’s initial first partner firm. His property-law experience covers the whole range, which you don’t usually get in-house in P2P lending. One of Loanpad’s key tasks is ensuring that the loans are legally sound and that borrower fraud is very unlikely.
On lending experience, the key decision maker worked as CEO of a property lender for two years. This is less prior experience than I would usually want to see, but it is absolutely acceptable with these loans, where the experienced partner lenders taking a large chunk of skin in the game along with the riskiest loan slices. He also now has seven years experience at Loanpad.
The core borrower assessments for Loanpad* are conducted by its many lending partner companies.
Loanpad told us that all its partners have a lot of experience. It’s not possible to assess all of those firms in anything like the depth we regularly assess Loanpad. But the background research we have conducted has found that they all have at least some property or property-lending experience, and in some cases they clearly have a huge and successful history in this space.
While I’m not convinced that all of them are very experienced, I trust in Loanpad’s assessments of their abilities and integrity. These lending companies are taking far riskier slices of the same loans, as they will lose their money first.
Furthermore, not as much experience is needed from Loanpad’s lending partners as at other P2P lending companies. This is in large part because people lending through Loanpad are taking just the very safest parts of those loans.
Loanpad review: lending processes
Loanpad’s role is to assess the partner lenders and take the lowest-risk chunk from them. The idea is that partner lenders will choose borrowers more carefully than a loan broker, due to their skin in the game.
In assessing loans, Loanpad* considers top-quality property security to be paramount. Loanpad emphasises getting loans on properties that will be easy to sell, such as two-bedroom flats in a town centre as opposed to farms.
Loanpad also only agrees loans on major developments when they come through lending partners that have the skills to complete the development project in the borrower’s place, should that become necessary.
Any checks on borrowers are focused on trustworthiness, with financial and credit checks being part of that, and on steps to make fraud unlikely.
How good are Loanpad’s interest rates, bad debts and margin of safety?
No loans are in arrears (i.e. fallen late without a healthy, agreed extension). Just six unique loans out of 861 have ever officially turned bad. Five of which are fully recovered and the last is going through recovery procedures. That one, like all Loanpad loans, has substantial property security to cover the loan amounts and any outstanding interest.
While Loanpad has just ticked up the maximum amount it might lend on some loans, that maximum remains very low and lenders are spread automatically across more than 250 unique loans (about 440 tranches of loans across those properties).
Furthermore, Loanpad now works with many lending partners that supply the loans and take the riskier slices away. None of these lending partners is an outsized risk, as the loans you are lending in are well spread out among them.
Our core, strict assessments of Loanpad’s loans continues to show it maintains the 3/3 Exceptional 4thWay PLUS Rating – our rating of its risk-reward balance. It also remains the only provider to have a 4thWay Risk Score as low (i.e. as good) as 3/10. For comparison, it probably can never reach 1/10, because that’s savings account/cash ISA risk.
Yet, unlike savings accounts, Loanpad still pays more than inflation virtually every year. It pays 5.3%-6.3%, depending on how quickly you’d like access to your money.
Even if Loanpad were to hit its new 56% maximum loan amount on every loan it approves from now on, our calculations find the risk to you of losses in these still excellent quality loans, while being automatically spread across hundreds of loans, would remain ludicrously small.
In the worst possible economic and property-market conditions, Loanpad remains the place for your money during an Armageddon situation.
Currently, the Loanpad Premium P2P Lending Account* and the Loanpad Premium IFISA* offer you 6.3%.
Personally, I don’t see why anyone would choose the Loanpad Classic Account over Loanpad Premium, as it means earning 5.3% but without lower risk. And I don’t think you should lend in P2P if you feel you should always be able to access your money in an instant for free. (Which simply won’t always be the case.) That’s the only potential advantage that Loanpad Classic might offer you.
Has Loanpad provided enough information to assess the risks?
Loanpad* has been very open with us, providing the great volume of data, facts and personal access we need to assess it on an ongoing basis and to keep the Loanpad review up-to-date.
Is Loanpad profitable?
Loanpad told us it became profitable four years ago and that it expects to be profitable every month from now on.
Published company accounts don’t provide much information, although this is not unusual. Still, they indicate six-figure profits for the calendar years 2022, 2023 and 2024 and perhaps close to £1 million in that latest year.
It has a super solid core of loyal lenders. I therefore still expect this to be a sustainable business from this point onwards, as it should find it easy to maintain and grow its borrower and lender base, and to contain costs.
Is Loanpad a good investment?
Loanpad* is one of the safest investments of any asset class available to lenders in the UK.
I believe lenders are unlikely to lose money from bad debts under any imaginable market conditions, with the possible exception of catastrophes along the lines of a world war.
Loanpad offers a phenomenal investment opportunity that should be one of the core investment products for any investor looking for solid returns. Just watch that you’re comfortable with the rates versus cash ISAs and savings accounts, as they can sometimes get fairly close.
What is Loanpad’s minimum lending amount and how many loans can I lend in?
The minimum lending amount is £10, which is spread across all live loans and redistributed daily as new loans are made. Lenders are sufficiently diversified across enough loans immediately.
There are enough loans available in the pipeline to keep lenders’ money spread widely.
We have investigated the potential capacity available to Loanpad and it remains huge. Even if you have large amounts of money that you want to lend, Loanpad is likely to be able to help you lend all of it across hundreds of high-quality loans for some time to come.
Does Loanpad have an IFISA?
Loanpad’s lending accounts are available as IFISAs.
Can I sell Loanpad loans to exit early?
Yes. There’s no charge for selling in its Classic accounts. With its Premium accounts you either have to wait at least 60 days or you pay 0.5%.
While lenders have always been able to sell swiftly so far since Loanpad launched, as usual you should expect that sometimes you won’t be able to do so and that it might even take quite a long time to get all your money back.
Be emotionally prepared for that, because that is normal for all P2P lending – even the best providers – and it’s one of the prices of investing in something that is highly stable compared to most other investments.
Thank you for reading the Loanpad review!
The five biggest items from our March 2025 reassessment of Loanpad
In this section, I’m pulling out the five main changes from the above review since our March 2025 reassessment, so that you don’t have to read the whole page again if you’re already familiar with Loanpad.
1. No issues of concern after this latest reassessment
No loans are in arrears (i.e. fallen late without a healthy, agreed extension). Just six unique loans out of 861 have ever officially turned bad. Five of which are fully recovered and the last is going through recovery procedures. That one, like all Loanpad loans, has substantial property security to cover the loan amounts and any outstanding interest.
While Loanpad has just ticked up the maximum amount it might lend on some loans, that maximum remains very low and lenders are spread automatically across more than 250 unique loans (about 440 tranches of loans across those properties).
2. Rating re-confirmed
Our core, strict assessments of Loanpad’s loans continues to show it maintains the 3/3 Exceptional 4thWay PLUS Rating – our rating of its risk-reward balance.
It also remains the only provider to have a 4thWay Risk Score as low (i.e. as good) as 3/10. For comparison, it probably can never reach 1/10, because that’s savings account/cash ISA risk.
Yet, unlike savings accounts, Loanpad still pays more than inflation virtually every year. It pays 5.3%-6.3%, depending on how quickly you’d like access to your money.
3. Loanpad lowers its lending standards, but risk impact is imperceptible
Loanpad* now limits its loans to 56% of the property valuation, so the property needs to sell for far less than its valuation in order for you to lose any money.
That limit is just freshly raised from its prior cap of 50%, in order to stay competitive. However, the average today remains closer to 43% and has historically been 41.8%.
Both that new maximum limit and the average lent are startlingly good, because typical industry averages are 70% to 80% maximum with an average lent of around 60%-65%.
Even if Loanpad were to hit its new 56% maximum loan amount on every loan it approves from now on, our calculations find the risk to you of losses in these still excellent quality loans, while being automatically spread across hundreds of loans, would remain ludicrously small.
In the worst possible economic and property-market conditions, Loanpad remains the place for your money during an Armageddon situation.
4. Wider spread across more different lending partners
Loanpad started with a single lending partner, which was a potential single point of failure (although the risk to Loanpad lenders even then was small, because Loanpad has taken the property security for each loan on your behalf).
Loanpad has now reduced this small risk further because it works with many lending partners that supply the loans and take the riskier slices away. None of these lending partners is an outsized risk, as the loans you are lending in have become well spread out among them.
5. Loanpad will enable you to lend as much or as little as you want for some time to come
While Loanpad has just ticked up the maximum amount it might lend on some loans, that maximum remains very low and lenders are spread automatically across more than 250 unique loans (about 440 tranches of loans across those properties).
There are enough loans available in the pipeline to keep lenders’ money spread widely.
We have investigated the potential capacity available to Loanpad and it remains huge. Even if you have large amounts of money that you want to lend, I think Loanpad is likely to be able to help you lend all of it across hundreds of high-quality loans for some time to come.
Thank you for reading the Loanpad review!
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The opinions expressed are those of the author(s) and not held by 4thWay. 4thWay is not regulated by ESMA or the FCA. All the specialists and researchers who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.
The 4thWay® PLUS Ratings are calculations developed by professional risk modellers (someone who models risks for the banks), experienced investors and a debt specialist from one of the major consultancy firms. They measure the interest you earn against the risk of suffering losses from borrowers being unable to repay their loans in scenarios up to a serious recession and a major property crash. The ratings assume you spread your money across hundreds or thousands of loans, and continue lending until all your loans are repaid. They assume you lend across 6-12 rated P2P lending accounts or IFISAs, and measure your overall performance across all of them, not against individual performances.
The 4thWay PLUS Ratings are calculated using objective criteria that can be measured and improved on over time, although no rating system is perfect. Read more about the 4thWay® PLUS Ratings.
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