P2P Lending Return Calculator

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.

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