P2P Lending Return Calculator NZ

This calculator estimates the net return you would actually earn from peer-to-peer lending in New Zealand, after stripping out the things that quietly eat into the advertised rate: borrower defaults, platform fees and tax. P2P platforms such as Squirrel and Lending Crowd connect your money with borrowers and pay you interest, and the headline rates can look very attractive against a term deposit. The catch is that the headline is a gross figure before reality bites. Some borrowers default and stop repaying, which is a direct loss of capital; the platform charges a fee for running the service; and the interest you do receive is taxable income at your rate. You enter the amount you lend, the gross interest rate, the share of your loans you expect to default each year, the platform fee, and your tax rate, and the calculator subtracts each in turn to show a realistic net return in both dollars and percent. The gap between the headline and the net figure is often larger than people expect, which is the whole point of running the numbers. Remember P2P lending carries genuine credit risk and is not guaranteed, so spread your lending widely and treat the result as an estimate, not a promise.

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3.3%
estimated net return after defaults, fees and tax
Gross interest$900
Less defaults$200
Less fees$100
Less tax$270
Net return$330

Defaults reduce capital, fees and tax reduce income. P2P is not guaranteed and carries credit risk. Estimate only, not financial advice.

How it works

The calculator works out gross interest as the amount times the gross rate, subtracts an expected default loss as the amount times the default rate, subtracts the platform fee as the amount times the fee rate, then taxes the gross interest at your rate. What is left is the net return in dollars, divided by the amount lent for the net percentage.

Worked example

Lending 10,000 dollars at 9 percent earns 900 dollars gross. A 2 percent default loss is 200 dollars, a 1 percent fee is 100 dollars, and tax at 30 percent on the 900 is 270 dollars, leaving about 330 dollars, a net return of roughly 3.3 percent.

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Frequently asked questions

What is peer-to-peer lending?

Peer-to-peer, or P2P, lending platforms such as Squirrel and Lending Crowd let you lend money to borrowers and earn interest. The headline rate looks attractive, but your real return is lower once defaults, fees and tax are taken out.

Why does the headline rate overstate returns?

Because some borrowers default and never repay, the platform takes a fee, and the interest you do earn is taxable. This calculator subtracts all three to show a realistic net return.

Is P2P lending risky?

It carries real credit risk; you can lose money if borrowers default, and it is not covered by any guarantee. Some platforms have reserve funds that reduce but do not remove the risk. Spread your lending and treat the return as uncertain.