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How we calculate returns

The return we present is your actual annualised return to date as a percentage of your investments made with LendingCrowd after all fees and bad debts have been deducted. It doesn’t take tax into account because this is a matter unique to you. Your actual rate of return will not be shown in your account until you have been investing with LendingCrowd for 3 months.

Your annualised rate of return represents the equivalent annual interest had you invested your money in a cash savings account paying the same rate. For those familiar with Excel spreadsheets, we calculate it in a similar way to the XIRR function. The calculation uses daily cashflows of positive and negative historic transactions plus a final transaction representing the current value of your portfolio and accrued interest.

We use the information shown below during the lifetime of your investment with LendingCrowd to calculate your percentage return:

Daily historic cashflows

These represent the cash in and out of your account, including:

  • amounts lent to businesses – these are registered from the day you bid at auction or the date you buy a loan on the Loan Market
  • any amounts received in repayments, including interest and capital
  • any proceeds from the sale of your loan parts, after fees
  • any recovery amounts you’ve received – this includes the outstanding capital and interest due to you from a bad debt
  • any other fees that you’ve paid us

The ‘Actual Rate of Return’ shown for each of your individual accounts in the MY ACCOUNTS section of the website excludes any promotional earnings.

The ‘Total Rate of Return’ shown in your accounts summary within the MY ACCOUNTS section includes promotional earnings across all of your accounts. Promotional earnings that have a lock-in period will be accrued on a daily basis over that lock-in period. This is to make sure that your returns are not artificially inflated by applying the promotional earnings at the beginning of the lock-in period.

Note: these cashflows don’t include cash deposits and withdrawals, as we treat the moment of investment as the point at which you invest money in a loan – not when you deposit money.

Current value of your loan holdings

This reflects the outstanding capital you’ve lent to businesses, minus any bad debts you’ve incurred.

Accrued interest

This is the amount of interest you’ve earned up until today that has not yet been paid to you.

Points to remember

We think this method is the best way to show your actual investment performance with LendingCrowd, but please remember:

  • Your returns don’t consider any reduction in earnings due to tax.
  • We don’t include any cash amounts not yet lent to businesses.
  • We assume there will be no recoveries from loans that are declared a capital loss. This is pessimistic.
  • We assume that overdue loans will be fully paid. This is optimistic.
  • We model your current holdings as though they become fully paid today – we don’t consider the future repayment cycle of your holdings.
  • Past returns are not necessarily a guide to future returns. Your eventual returns may be higher or lower than those you see today.

Expected rate of return

This is an estimate of the annualised return you could earn after fees and bad debt. It doesn’t take tax into account because this is a matter unique to you. The estimated future return is based on your current loan portfolio going forward and does not take past performance into account.

We use the information below to calculate your estimated future return:

Gross interest rate

This is the annual gross interest rate, before fees and bad debt, that businesses pay to investors for the money they borrow through the LendingCrowd platform.


Estimated bad debt rate

This is the annual percentage of loans, by capital amount, that we estimate will not be repaid by borrowers in the future. It includes the recoveries that we estimate we will make on loans that are overdue.


1% ongoing repayment fee

We deduct this 1% ongoing repayment fee from monthly loan repayments when we receive them from borrowers.


For Self Select and Growth accounts, we assume that any capital and interest repayments you receive are reinvested. For Income accounts, it assumes that only capital repayments are reinvested.


Please note: your actual future return may be higher or lower than the figure shown on your weekly summary. Past returns are not necessarily a guide to future returns.


As an investor, it’s important to remember you’re lending to businesses so your capital is at risk.

If you invest through LendingCrowd you should understand that your capital is at risk.

LendingCrowd is the trading name of Edinburgh Alternative Finance Limited, Company Number SC468392, authorised and regulated by the Financial Conduct Authority (Firm reference number 670991). LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

Read more about the risk involved when investing and borrowing.

The company's registered office is 23 Manor Place, Edinburgh, EH3 7DX.

Copyright © LendingCrowd 2019. All rights reserved.

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