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Lendwise Review
Lendwise has produced stable lending results and much-needed diversity in funding postgraduate studies in a P2P lending market overcrowded with property development lending.
Lendwise's lending accounts are unrated.
These loans are currently expected to pay lenders around 5.69% after bad debts.
Visit Lendwise or keep reading the Lendwise Review.
What does Lendwise do?
Lendwise is the only UK-based P2P lending company that lends to fund people’s education. You and other lenders collectively lend relatively large sums for personal loans to cover tuition fees. The vast majority of Lendwise’s loans are financing for postgraduate and professional qualifications.
Borrowers studying full time accrue interest on their loans during their one- or two-year courses. Afterwards, they start repaying their loans and interest to lenders on a monthly basis.
Borrowers on part-time courses have no grace period and start repaying immediately.
When did Lendwise start?
Lendwise started at the end of 2018 and lending through its online lending platform has now reached £85 million.
What interesting or unique points does it have?
Lendwise fills a gap left by other quality P2P lending companies focused on personal loans, because they have all shifted their businesses away from the P2P model.
More than that, Lendwise’s borrowers are, on the whole, likely to be uniquely ambitious, driven, and understanding of their financial responsibilities.
These loans have an unusual repayment profile. Around half of borrowers accrue interest without paying anything for one year. Borrowers are offered a few months to 10 years to steadily repay the loan.
A typical Lendwise loan is contracted to last around seven years, when the average for high-street bank personal loans is usually around three years. With few loans repaid early, you earn interest for a long time on each one.
The average loan size is over £40,000, which is high for personal loans.
Lendwise review: how good are its loans?
The proportion of borrowers Lendwise accepts is high compared to other personal loans – but I think in this case understandably so.
The applicants for these very specific loans are much more likely to be those who’ll be accepted. This is partly because borrowers have to demonstrate that they have earned a place on a course already.
It’s also partly because the bulk of the loan payment is often to be paid by Lendwise directly to the university in fees, showing that the borrower is not mis-stating the reasons for borrowing.
In addition, the university repays the fees if the borrower drops out.
Yet it is of course the borrower, and not the university, that’s contracted to pay off the loan and interest. Clearly, these borrowers intend to go through with their studies and earn a higher income at the other end.
Borrowers are highly motivated, with most of them having already graduated and now pushing for courses at universities where Lendwise is able to model their likely future incomes.
Some limited evidence suggests that borrowers generally go on to earn at or above the projected incomes, although with AI changing the job market fast I think modelling will be less reliable for some years to come.
Most universities are in the UK. For Lendwise to consider an overseas university, it has to be of particularly high regard. This means mostly top business schools and high-ranking universities.
Lendwise’s loans have performed well. The proportion of loans that turn bad and need to be chased are in line with some high-street banks, albeit not at the very best end.
In terms of recovering bad debt, Lendwise started exceptionally by getting back 60% of the defaulted debt on loans it approved in its early years. It’ll take a while to see how well Lendwise will do on outstanding loans, but I expect this success to drop significantly. Nevertheless, it will probably remain on the better side for personal loans.
How is Lendwise’s borrower sector doing?
As lenders, you need to focus primarily on the quality of the loans and whether interest rates are sufficient.
Much less important is an assessment of current market conditions. Because the reality is that forecasting sectoral and macroeconomic factors, and what their impacts will be on overall lending returns, is almost always not doable.
(As the economist J. K. Galbraith famously said: “There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” As well as: “The only function of economic forecasting is to make astrology look respectable.”)
Even so, when more borrowers have been having problems meeting their commitments – as they have at Lendwise – it pays to consider whether recent conditions were the cause of those struggles, because if not then it could be something far worse: weakening lending standards.
My view is that, certainly, the sectoral issues must have been contributing to weaker borrower repayments, at the point when they finish their studies and try to get a job:
- Job openings in the UK are the fewest they have been since 2014, excluding during the pandemic1.
- Specifically for Lendwise borrowers, more people are graduating or getting postgraduate degrees2.
- Many recruitment and employee-support sources confidently claim they’ve noticed a recent decrease in entry-level jobs specifically for graduates.
Lendwise stated that loan repayment issues at present are impacted by a “trend of income instability rather than long-term inability to pay, with many borrowers seeking short-term support while they stabilised their employment or financial position”.
For many borrowers who have personal loans, once they stop paying they’re typically not likely to start up again later.
However, Lendwise’s optimism that these are short-term issues has data to back it up. Its struggling borrowers have typically begun repaying their loans once their job situations have stabilised after their studies.
How much experience do Lendwise’s key people have?
After 11 years of assessing P2P lending companies and then seeing the results that follow, it’s not easy to reassure us when prior experience is limited. But it does happen from time-to-time.
The named team has demonstrated little direct prior experience in terms of assessing loans, credit-risk policy and analysis, or recovery of bad debts.
Unusually for that situation, the key team does still impress with their knowledge, rationality, clear demarcation of responsibilities, and their realism and down-to-earthness. The focus on data in particular reassured, as did the CEO’s sharp mind, picking up on every subtlety in our discussions.
Now they have eight years’ experience at Lendwise itself, with around 3,500 loans as we hit summer 2026. While that’s not a huge number of loans to learn from for this kind of lending, it’s enough to start filtering out some of the biggest underperforming borrower segments.
The key people have other financial, banking, investment banking or accounting experience, and have worked in roles that saw exposure to money lending. This has some value, but it shouldn’t be overweighted.
In summary, I’d like to see a lot more relevant experience to Lendwise, but they have performed impressively even without it.
Lendwise review: lending processes
Lendwise are looking for responsible students, because, if the applicants have arrears and bad debts, they believe the “solution is not access to more debt.”
As with standard personal loans, Lendwise’s loan-application assessments begin with credit data and affordability, using mainly one credit-reference agency. This is normal, although we do prefer to see at least two, including one from Experian or Equifax, which we considered to have the best data when we did a data review some years ago.
Their assessments are set apart from other lenders by looking at where the borrower has previously studied and what they studied, relevant work experience, and the baseline salaries already achieved and sustained.
Looking to the future, they consider ranking tables of universities where the borrower is about to study again and typical time to get a job after studying there.
Lendwise models future earnings potential, based on historical outcomes for specific schools and courses, as well as on broader earnings data for postgraduate degrees and from Lendwise’s own lending data.
The three on the credit committee, who make the final decision on approvals, usually have to agree, or it’s a No. We prefer to see that the committee always has to be unanimous.
Their processes for going after bad debts is well-structured, and they have sufficient staff to work on them. They are reassuringly quick to recognise arrears and other problems as bad debts.
Key to small personal loans is also improving performance over time through analysing past results, which Lendwise does. To that end, it recently stated:
“Following an analysis of the characteristics of borrowers who default, we have implemented (and will continue to update) targeted risk-mitigation strategies which aim to reduce default rates and improve outcomes for lenders.
“These include for example, updating our eligibility criteria so that we don’t lend to specific high-risk jurisdictions and academic programs, thereby improving the portfolio’s overall credit quality.”
I am hoping those recent updates to its processes will reduce the number of foreign borrowers who fall behind on their payments. More on that in the next section.
How good are Lendwise’s interest rates, bad debts and margin of safety?
By May 2026, Lendwise lenders earned over two times more interest than there are bad debts. I currently think it most likely that this will improve somewhat more by the time the outstanding loans are all repaid and more bad debts are clawed back.
We no longer conduct our core assessment on Lendwise, which means doing the Basel tests banks are required to do in order to see how their loans might perform during and after a macroeconomic disaster. Lendwise therefore can’t try to earn a 4thWay PLUS Rating.
Nevertheless, I have reviewed its highly detailed data. There’s a lot of data analysis behind these six bullet items, which update you on bad-debt expectations:
- Historically, 9/100 loans have turned bad up to five years after they were approved and therefore gone into recovery procedures.
- In recent years, more loans are turning bad than in Lendwise’s earlier years. While it’s early days, the indications are that recoveries of bad debts are not going to be quite as stellar as they used to be either.
- 32/100 loans Lendwise has approved recently are to foreign borrowers, up from a historical 6/100. Non-UK nationals have had a worse bad-debt profile with, so far, perhaps 13 out of every 100 falling at least three months late in their repayments, versus six out of 100 borrowers who are from the UK.
- The average loan size has fluctuated over the years, but otherwise risen from under £10,000 to more than £40,000. The data doesn’t currently suggest that smaller or larger loans are much riskier than the other, although a bit more time is needed.
- It’s meaningless to be too precise, but I’m loosely expecting that amounts ultimately written off will reduce lending interest over the life of the loans by around 40p for every £1 earned.
- Those write-offs would mean an average lender earning an annualised lending rate around 3-3.5 percentage points less than the borrowers were supposed to pay.
- While I’m not in a position to do the Pillar 3 analysis of Lendwise bad debts (another assessment banks do on their loanbooks for the regulator that is highly appropriate for personal loans) a brief check finds that its results on overall levels of outstanding loans turning bad in a given year are comparable to high-street banks – if not among the best.
It’s important to contrast lifetime bad debts with annualised lending rates.
While you should certainly plan for more than 10 loans out of every 100 ultimately turning bad over the life of these long loans, they only turn bad once.
But all the good loans pay interest every year for the life of the loans – i.e. a lot more than once.
Plus, some loans don’t turn bad until a good proportion of interest and lent money has been repaid already, lowering the risks to you.
Furthermore, at Lendwise, a large chunk of bad debt is ultimately recovered.
That’s why 13 non-UK borrowers out of 100 having problems doesn’t mean 13% annualised losses.
And it’s why overall, and on average, lenders earning, say 8.5%, might be roughly on track to get 5% to 5.5% per year (3-3.5 percentage points less), rather than minus 4.5% per year!
None of the points in my above bullet list seem abnormal for this lending sector, but a point of hesitation for me is that non-UK borrowers have actually been charged lower APRs, despite their worse performance.
This strongly suggests Lendwise continued to incorrectly assess the level of risk on foreign borrowers at least up to this point, or that it otherwise took a commercial decision to knowingly press ahead with that slight mis-pricing. I note that it offsets for you a good chunk – but not all – of the mis-pricing by passing a higher proportion of borrower’s total payments to lenders.
I wanted to discuss all the points in this section with Lendwise, among other things, but as I had other outstanding questions that were left unanswered this month I have left it till next time.
Your own personal lending risk
People lending through most P2P lending accounts hold unique portfolios of loans, which leads to differences in performance.
However, with small, unsecured personal loans those differences need to be considered more carefully.
I wish that we were in a place with Lendwise to do more detailed analysis on the variability of returns for lenders, such as using Monte Carlo simulations or at least more simple equivalents.
But, even without those tests here, I can tell you from the detailed data we receive that you probably had to be very unlucky to have lost money if you have sensibly both lent in hundreds of loans and held onto your loans until the borrowers repay them, so that you get as much interest out of your good loans as possible.
Lender feedback to 4thWay indicates that returns or expected returns tend to be grouped at least in the “OK” zone or better.
Plus, it seems that most people when investing just a few thousand pounds for a relatively short time are still able to spread reasonably evenly across a surprisingly large number of loans and borrowers. That really helps a great deal to bring the spread of results between different lenders closer together.
In the absence of more comprehensive data on individual lender results, we’ll continue to keep our ears to the ground on how lenders are doing.
Has Lendwise provided enough information to assess the risks?
Lendwise has committed to providing us with highly detailed data on the performance of all of its loans on a monthly basis. While it has recently been slow to answer queries, it usually provides us with a huge amount of information as well as access to its key people when we ask for it.
It has been candid with us in ways many aren’t, and this honesty and openness shows good character.
Information provided directly to its website users and lenders is also pretty good, when comparing it to many of its competitors. This includes its public statistics page and its updates to lenders when they have any loans that have turned bad. It could perhaps make small improvements. E.g. it could explain a little better to lenders how their personal “current return” figures map in with the bad debts (the “loans in default”).
It could certainly do with adding a little more information for its website users on the relevant skills and prior experience that it does and doesn’t have, and more about how it goes about assessing borrowers.
Is Lendwise profitable?
Lendwise turned profitable for the first time in the calendar year of 2025, making nearly half-a-million pounds. This continues a steady upward trajectory for at least the past four years.
What can you tell me about Lendwise’s cybersecurity?
Sucuri’s soft security probe for us of Lendwise’s cybersecurity shows its website and lending portal is secure and has no obvious concerns in terms of malware, out-of-date technology, its firewall or its coding. It’s also marked as clean by Google Sage Browsing, McAfee and other internet and security technology providers.
Is Lendwise a good investment?
With the caveat that we no longer stress test Lendwise for performance during major economic or sectoral crises, I think that Lendwise is a good investment, enabling you to spread your risks across different kinds of borrowers, not just property borrowers.
What is Lendwise’s minimum lending amount and how many loans can I lend in?
The minimum you can put into a Lendwise account is £1,000, with a minimum of £10 per loan. (The minimum can be lower when buying second-hand loan parts from other lenders.)
Some data and figures supplied to us by Lendwise quite a while back indicates that lenders probably find it easy to spread their money over a large number of loans over the course of about a year. Individual lenders have confirmed this to me too.
You can set maximum loan amounts per borrower when auto-lending to cap your risks in any individual loan. For these loans – as loose guidance – you want to be lending in several hundred loans. The higher the number the better.
Other useful auto-lend options include the length of the loan and interest rate.
Does Lendwise have an IFISA?
Yes, Lendwise’s account is available as an IFISA.
Can I sell Lendwise loans to exit early?
Yes, you can sell your loans at their outstanding value for a 1% fee, provided other lenders buy your loan parts off you.
You can’t sell loans that have turned bad or that are currently in arrears.
In a well-diversified portfolio, expect very roughly around half your money back by year four or five, and most of the rest within two or three more years.
Some broad statistics indicate that early repayments are rare when compared to other personal loans, so you need to be prepared to take some time to exit.
You might be able to speed your exit in advance by trying to get in on more loans that are due in shorter periods, perhaps by using the auto-lend settings.
Consider periodically selling some of your loans to foreign borrowers in order to reduce your exposure there – although the 1% exit cost for doing so does counterbalance that risk reduction somewhat.
What more do I need to know?
When Lendwise started in September 2018, you were earning around 8% before losses. Borrowers were just charged 10.5% APR typically, so the lending cost to you was a 2.5 percentage point spread between what Lendwise received from borrowers and what you’re offered.
That’s low, even for this kind of lending where you generally expect it to be on the lower side, because much of the work in assessing borrowers is automated.
However, borrower rates have gradually risen much faster than lender rates over the years.
Over the past six months, the spread between what lenders get before losses and what borrowers pay in total reached 6.3 percentage points. So lenders might be earning less than 9% before losses now, while borrowers pay nearly 15% APR.
Looking back at personal lending in P2P, it doesn’t surprise me that the spread had to rise for Lendwise to be able to survive. Yet the spread is now high, absent a good explanation.
The spread is substantially lower for non-UK borrowers at 4.4 percentage points, which means you can’t easily explain the greater spread as being driven by the higher costs of assessing students from overseas.
I will seek some justification of these higher costs from Lendwise before the next update, but I note that this greater spread did enable Lendwise to make a profit for the first time in 2025. That lowers different risks for lenders related to a failure of Lendwise itself. But the risk-reward profile for lenders would be better overall if Lendwise just passed on to them more of what the borrowers paid.
When a borrower defaults, Lendwise will pay you back first before taking its own cut. While such promises have not always historically turned out to have been of much use to lenders in this industry, the data shows that Lendwise substantially boosts its bad-debt recovery for lenders by waiving its fees.
Thanks for reading the Lendwise Review! Visit Lendwise.
Sources:
1. Office for National Statistics: Vacancies and jobs in the UK: May 2026.
2. The number of postgraduate qualifications reached 500,000 in 2024, after climbing 61% in four years according to HESA’s Higher Education Student Statistics. They climbed higher still in 2025.
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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.
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