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 6.0% interest with zero losses.
Visit Loanpad* or keep reading the Loanpad Review.
When did Loanpad start?
Since it was established in 2018 up to the end of September 2026, lenders have lent £550 million.
It’s mostly lending to fund residential property developments as well as bridging loans, which means short-term property lending.
Its development lending is mostly refurbishment and conversion, rather than the riskier, ground-up builds, but I will nevertheless refer to it all as “development 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 agreed loan amounts don’t go much above half the property valuation. Loanpad is also rare in development lending in that, more often than not, it bases the property valuation on its starting value rather than the hoped-for sale price after the developers have finished their work.
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 a lot more. That’s massive. When other UK P2P lending companies arrange for first-loss protection for lenders, it’s usually just 5%.
After more than 2,000 loans and tranches against more than 1,300 property projects, lenders haven’t lost money on any of them.
All lenders are currently lending in a massive 276 different property projects at the same time, with their money automatically spread across all existing loans, and regularly redistributed.
All those factors combined, 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.
Loanpad has a small, entirely discretionary fund to pay out interest to you on time in the event a borrower falls behind on payments. This is rarely touched. It’s for smoothing cash flow into your account, rather than serving any protective function.
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, you’ll get your money back first, including interest due to you.
There are other non-Loanpad lenders lending to the same borrowers as you against the same properties; they will lose all their money and unpaid interest first.
56% limit on the amount lent versus the property price
Loanpad* limits its loans to 56% of the property valuation. That means the property needs to sell for far less than its valuation in order for you to lose any money. The average since Loanpad set that limit is 52.2%.
This is startlingly good, with the industry usually capping at 70% to 75%, while averaging over 65%.
Up until early 2025, the maximum allowed was 50% and the average lent was slightly under that. Even so, I do not anticipate any worsening of performance for lenders and have not seen any signs of it after nearly two years of this higher cap.
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 sometimes relax that very high standard somewhat. Loanpad then caps the amount lent at 56% of the hoped-for sale price, which is called the “gross development value” or GDV. Less than 5% of all loan tranches have been measured against GDV.
Development loans that have reached this stage currently average 32.5% of the GDV, which is half as much (twice as good) as normal for these kinds of loans.
Plus, Loanpad overwhelmingly focuses on non-ground-up development lending, which takes a way some of the highest-risk phases, such as discovering problems as soon as you dig to create foundations.
Loan extensions are common
Scores of loans that historically have been extended for 20 months, 30 months or even longer have gone on to repay in full and few of them were officially considered bad debts. This is a statistically significant finding.
Historically, fully a third of outstanding loan tranches have needed to be extended. They were done so 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, but the difference here is that those other lenders are losing money as a result. Loanpad’s extensions will turn out to be safe and reasonable with few losses.
Most importantly, the pattern of the data shows that Loanpad does not hide bad debts by extending them for very long periods merely to pretend all is well and kick the can down the road.
Monthly interest sometimes paid by borrowers
Sometimes, borrowers pay in the interest due on a monthly basis (and in advance), which is unusual for these kinds of loans – but welcome. However, we don’t currently get a break down of how many loans have monthly interest payments coming from borrowers, so for the time being we presume it’s on the rarer side.
Loanpad’s loans remain consistent
The nature and type of the loans Loanpad approves remain consistent and it has never had outsized loans that concentrate too much risk for lenders.
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 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 take 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 as well as by Loanpad itself.
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.
Loanpad review: lending processes
Loanpad’s role is firstly to assess potential lending partners, as it will be taking the lowest-risk chunks of loans from them. The idea is that partner lenders will assess the borrowers, their properties and their development plans more carefully than a loan broker, due to their skin in the game.
Loanpad also decides for itself whether it will accept a given loan, or even tranche of a loan, from its lending partners.
Last year, I completely re-evaluated the current processes used by Loanpad to assess each borrower and loan. Usually, I find at least some weaknesses, but here I find that it uses best practice across the board and I can’t pinpoint any spots where it should make improvements to lower risk.
I was impressed by the key person’s mindset and how conscious he is of the fact that humans make a lot of mistakes, both consciously and unconsciously. This is reflected in the design of both its lending processes and its loan-management systems. It’s very strong.
In assessing loans, Loanpad* considers top-quality property security to be paramount. It 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.
Its first step when a loan turns bad is usually to let its lending partner deal with it, since the partner has more to lose.
Loanpad will take over the process if the lending partner is struggling. The latter situation hasn’t properly been tested, as it hasn’t really been needed. Still, I’m satisfised with the level of attention that Loanpad gives to loans that have issues (and its loan and building monitoring in general).
It’s important with these kinds of loans that problems are dealt with as swiftly as possible. Otherwise, the risk of losses rises.
How good are Loanpad’s interest rates, bad debts and margin of safety?
No loans are in arrears (i.e. none have fallen late without an agreed extension).
Just ten unique loans out of more than 1,300 have ever officially turned bad.
Eight of those are fully recovered and the other two are going through recovery procedures. Those two, like all Loanpad loans, have substantial property security to cover the loan amounts and any outstanding interest.
Last time I reported on a lot of loans that needed to be extended with the core of those being from 2022 and 2023, which were vintages particularly badly hit by property industry troubles. Those have now substantially declined.
The overall picture remains considerably better than in development lending elsewhere, which has seen quite a few write-offs over the past year and there will be some more to come.
Loanpad’s loans have performed well within 4thWay’s core forecasts, in which we use a stricter version of stress tests that global banks apply to their own outstanding loans.
Our core, strict assessments of Loanpad’s loans continue to show it easily 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 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 5.2%-6.0%, depending on how quickly you’d like access to your money.
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 6.0%.
Personally, I don’t see why most people would choose the Loanpad Classic Account over Loanpad Premium, as it means earning 5.2% 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* continues to be exceptionally 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. Indeed, it offers more access and information than we ask for.
Is Loanpad profitable?
Loanpad told us it became profitable four years ago and since then it expects to be profitable every month.
Published company accounts don’t provide much information, although this is not unusual. Still, they indicate six-figure profits for the calendar years 2022 and 2023, with close to £1 million in 2024 and perhaps £1.4 million in 2025.
It has a super solid core of loyal lenders. I therefore expect this to be a very sustainable business from this point onwards, as it should find it easy to maintain its borrower and lender base, and to contain costs.
What can you tell me about Loanpad’s cybersecurity?
Our security partners, Sucuri, have conducted a soft security probe of Loanpad’s website. It considers Loanpad’s website technology to be up-to-date. The site is marked as in good health and clean, with no malware, by Sucuri, Google Sage Browsing, McAfee, Opera and other internet and security technology providers. It’s also rated A+ by SSL Labs.
Loanpad’s website is secure and it automatically directs you to a secure version of its site. It requires strong passwords and multi-factor authentification if you’re making important changes to your account. Loanpad backs up your data on a daily basis and stores it in at least two different geographical locations.
Loanpad runs a firewall to monitor and block malicious traffic and it monitors for breaches.
Once a year, external contractors review Loanpad’s servers, networks, databases and other tech infrastructure.
Those same contractors also try hack into its systems – so-called penetration testing – on an annual basis.
You might read Inside Loanpad: The Tech Protecting Your Lending Returns.
How much are Loanpad’s lending costs?
We have always shown information on lending costs for each P2P lending company here on our public website, but they’ve always been a bit difficult to find.
So recently we have slowly started to add a new section to our reviews that shows our estimate of the total lending costs you pay.
We are never able to be precise, but Loanpad provides far more information than most to make a better estimate.
I currently estimate your Loanpad lending costs are 3.4% of the amount you lend per year for the Loanpad’s Premium accounts and 4.2% for the Classic accounts.
Those total costs are low compared to most online property lending, which helps to keep the risk-reward ratio of your lending healthier.
To be clear, the quoted lending rates of 5.2%-6.0% are after those costs have already been deducted. Those lending costs go towards such things as Loanpad’s costs in assessing loan applications, monitoring loans, dealing with its lending partners, looking after your online accounts, sales, marketing and Loanpad’s profits.
Your costs are higher for the lower interest rate Classic accounts, since you’re paying extra for easier access – at least while there is sufficient demand from other lenders to take over your loans.
Just like most P2P lending companies, Loanpad states it doesn’t charge fees to lenders and that it instead just charges the borrower. It’s a time honoured tradition all across the entire world of investment for providers to treat fees as if they don’t cost the investors. However, as with the long standard practice for all reputable analysts across all types of investments – not just P2P lending – There’s No Such Thing as “No Lender (or investor) Fee”.
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 in the past they once got fairly close.
What is Loanpad’s minimum lending amount and how many loans can I lend in?
The minimum lending amount is just £0.01, 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.
Unusually, Loanpad lists maximum lending amounts. £20,000 in its Classic Account/IFISA and £250,000 in its Premium Account/IFISA. That said, it has a history of making arrangements for lenders if you write to them to ask to lend a lot more.
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.
What you need to know about auto-lending with Loanpad
Loanpad’s auto-lending system has been exceptionally well designed, with no major in-built flaws that can create problems.
Here is a break down of where it fits in terms of the most typical flaws in auto-lend accounts:
How widely is your money spread in Loanpad’s auto-lend?
In general, key aspects of any P2P auto-lend functionality are whether they help you spread your money across a lot of loans and whether this readjusts as new loans arise and existing ones are repaid.
Loanpad does both of those things, adjusting on a daily basis. All lenders are now in around 300 completely different loans.
Do you buy existing late loans and bad debts when you join Loanpad’s auto-lend?
If loans are pooled together and shared between lots of lenders, you also want to know if you’re going to be buying loans in which borrowers have already fallen late to make payments, or whether you’ll even buy loans that are existing bad debts.
In Loanpad’s case, your money is pooled and you do indeed buy such loans when you start lending or add more money to your account.
However, as soon as Loanpad believes there’s any realistic chance that lenders might lose some of their money on a loan, it is removed from the pool.
When that happens to a loan, the lenders who already hold some of that loan keep all the loan parts they have until that bad loan is repaid. Meanwhile, those adding new money to a Loanpad lending account will not see that money allocated to that bad loan.
Does Loanpad adjust the price of bad loans you buy through auto-lend?
Finally, when buying bad debts within the pool, you want to see that the P2P lending company adjusts the price of those loans downwards to reflect the new risk (or that a provision fund pays into the pool to cover the expected additional risk).
Loanpad doesn’t do this, because, as I just explained, it simply stops such loan parts from being redistributed as soon as it sees a meaningful risk of actual loss for existing lenders.
Does Loanpad have an IFISA?
Loanpad’s lending accounts are available as IFISAs. 4thWay users have complimented the speed at which Loanpad processes ISA transfers, even when the transfer is out to another company.
| IFISA details | Description |
| Open to new lenders | Yes |
| Lenders can lend right away (if loans are available) | Yes |
| Minimum opening deposit for new ISA contributions | £0.01 |
| Minimum lending amount (if different to above) | N/A |
| Interest rates the same as non-IFISA accounts | Yes |
| Additional fees for lending through an IFISA | £0 |
| Transfers from or to other ISAs | Description |
| Minimum transfer-in amount | £500 |
| Transfer-in fee | £0 |
| Transfer-out fee | £0 |
| Partial transfers from other ISAs allowed | Yes |
| Partial transfers to other ISAs allowed | Yes |
| Extra features | Description |
| Lenders with ordinary accounts can automatically divert repayments and interest to their IFISA | No |
| Flexible ISA (you can withdraw and re-deposit new ISA money in the same tax year without losing your ISA allowances) | Yes |
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 inevitable prices of investing in something that is highly stable compared to most other investments.
Thank you for reading the Loanpad review!
Independent opinion: 4thWay will help you to identify your options and narrow down your choices. We suggest what you could do, but we won't tell you what to do or where to lend; the decision is yours. We are responsible for the accuracy and quality of the information we provide, but not for any decision you make based on it. The material is for general information and education purposes only.
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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.
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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