What Peer-To-Peer Lending Cashback Is Available?

I'm back! It's been ages since I told you about anything through 4thWay, so I'm pleased to take you through the latest on cashback.

Whatever happened to P2P lending cashback?

A few years ago, the regulator banned cashback, which had been used to lure people into lending through UK-based P2P lending companies. That's why you've not seen any such deals for some time. At least, not from UK-based providers.

After cashback was cancelled, analysis of lending data by one of 4thWay's specialists shows that lenders didn't receive a bump in lending rates to compensate for the loss of cashback.

Lenders therefore took a hit. Although I'm sure it also prevented some individual lenders from rushing in greedily because the cashback before they had completed a thorough assessment of the risks.

It's also likely that some lenders overweighted the value of cashback versus simply receiving higher lending rates, which are actually likely to turn out to be more beneficial in the long run.

That said, all else being equal, being paid bonuses is clearly a good thing.

Where can you still get cashback?

You need to look to the continent to get peer-to-peer lending cashback now, which usually means lending in euros. (See Risk 12: losing money from foreign currency fluctuations.)

It also means that none of your lending will be in IFISAs, although if you read our tax guide you'll see that most people won't pay UK taxes even on lending in ordinary P2P lending accounts – regardless of the country the provider is based in.

In some rare cases, you might also face a withholding tax in the country of the provider, although you might be able to get this back if you fill in the right forms.

Of those with English, here are the cashback deals I've managed to look through for you today. Please let us know if I've missed any really major ones at editorial@4thway.co.uk.

Lande

Lande is currently the only one paying cashback that has achieved a rating, earning the 3/3 Exceptional 4thWay PLUS Rating. Read more on that for critical context please in Lande Making Critical Improvements To Its Farm Lending, Property Lending Going Strong.

Up to 31st August, Lande will pay 2% cashback for each individual loan that you lend €5,000+ in. Lower rates are paid if you lend less: 0.5% for each individual loan that you lend €500+ in, boosted to 1% if you lend €1,000+. Again, the size of the cashback is not based on the total you lend in August, but the amount you lend in individual loans.

Lande does loans to farmers, typically secured on property, land, machinery, crops or cattle.

Returns have been up to 11% interest, ostensibly on €25 million in lending, although since farmers borrow repeatedly on shorter-term loans this figure is substantially inflated, based on how 4thWay typically adjusts lending volumes.

Lande* is based in Latvia and its borrowers are in Latvia, Lithuania and Romania.

Read the most recent update in Lande Making Critical Improvements To Its Farm Lending, Property Lending Going Strong.

Bondster

1% paid out after 30 days on any lending you do in that period after registering. This continues for up to two more months, provided you keep lending more: you get an additional 1% on any increase after 60 days and again after 90 days. I understand that's only if you use the link to Bondster in this page, apparently. (It turns out that often, cashback is only available if we set up affiliate deals, which I've quickly done today.)

Claiming a historical average 13% interest per year for lenders on €200 million lending, either with property security or with a promise to buy back loans that fall too late.

Bondster* is based in Czechia, with borrowers across Europe, South America, Africa and Asia.

Crowdpear

You get 1% cashback for all your lending made within 90 days after registration, although it's unclear if that's just if you click through the specific affiliate link below. No date given for when it's closing the 1% deal.

Claiming average return above 11% on €12 million property lending.

Crowdpear* is based in Lithuania and so are the borrowers.

Debitum

2% cashback on selected lending, backed by security that is usually property or land.

While it says the cashback is 2% pa (per annum), I think that's an error. Cashback is paid instantly when you lend, so it's not per year.

It says lenders have had no losses and returned nearly 15% interest. That's on a claimed €90 million lent, although, as this includes invoice financing, it could greatly overstate what 4thWay would consider to be the real amount of lending, due to the way invoice financing works.

Debitum* is based in Latvia and borrowers are mostly in Europe, mostly Germany, Spain, Portugal, Lithuania and France.

HeavyFinance

2% cashback on the amount you lend in the first 30 days after registering through the link below. This is to farmers, often lending against their property, land or machinery.

Average lending rates have been around 13%. HeavyFinance states €58 million in lending, but since farmers often pay off annual debts by borrowing again repeatedly, this probably overstates it, as really you should probably think of these more like multi-year loans.

HeavyFinance* is based in Lithuania with borrowers in Lithuania, Portugal, Poland, Bulgaria and Latvia.

Lendermarket

After you've gone fully through its registration process, you will earn 1% cashback on the amount you put in your account in the first 60 days, if you use the link below. Loans are personal or business loans, with a promise to buyback loans that turn bad.

It claims average lending rates have been around 15% and that over €400 million is lent, but it's hard to make sense of how lenders can only then have earned a total stated amount of just €18 million over the years. While that is too superficial an assessment of the headline figures to suggest anything devious is going on (as experience shows there certainly can be plausible explanations) obviously there's nevertheless a lot more to understand about Lendermarket than appears on the surface.

Lendermarket* is based in Estonia (and registered in Ireland) with borrowers in Spain, Finland, Czechia, Estonia, Denmark and Sweden.

Loanch

The cashback is at most 1%, although it could be a lot less. It states it will pay 1% in 90 days, but it's based on your average lent on each day during that period. So, if you lend €1,000 early in the first week and don't increase it to €50,000 until the end of the last week, you'll earn cashback that's much closer to 1-100th of a percent.

That is no a reason to rush in with loads of cash in the first week; it's not worth piling more money in than you are comfortable with to earn cashback.

You're looking at around 13% interest lending to individuals – potentially in payday loans, as many of them last just 30 days. There's a promise to buy back late loans from you. Total lending so far has been about €4 million.

Loanch* is a Hungarian P2P lending provider with borrowers in Indonesia and Malaysia so far, with Sri Lanka perhaps coming soon.

Nectaro

There's a brief deal running from now till 28th August. 0.5% for lending €1,000, rising by half a percentage point the more you lend and peaking at 5.5% cashback for lending €10,000+.

That's capped at €1,000 cashback though, meaning if you lend much over €18,000 you'll earn €1,000 cashback and no more. Lending €50,000 would therefore be the equivalent of 2% cashback.

Aside from that temporary deal, you get 1% cashback on all lending in your first 21 days after you complete your initial registration steps. The clock starts before you have completed all of the steps, which is a way for Nectaro to get you to complete all the verification processes that Nectaro needs to go through for regulatory reasons.

It's personal loans that are rather more like overdrafts, in that borrowers can draw down on them and repay them as needed, albeit for a fixed period of time.

Lending rates seem to be around 12%, although it probably hasn't completed very much lending so far. (Its statistics refer to a lending partner – loan originator – that has done a lot of lending, but that mostly wasn't through Nectaro.)

Nectaro* is based in Latvia, with borrowers in Romania and Moldova.

4thWay pages linked to above

The 13 Key Peer-To-Peer Lending Risks.

How Does Peer-to-Peer Lending Tax Work?

Lande Making Critical Improvements To Its Farm Lending, Property Lending Going Strong.