📘🔎 Crowdlending Terms Guide — Complete Glossary for Investors
Crowdlending has its own set of technical terms. Understanding them is fundamental to making informed decisions, evaluating risks, and understanding how platforms work. In this glossary, you will find the most important definitions, explained in a clear and practical way.
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📚 Key Crowdlending Terms
💸 Crowdlending
An investment model where many investors fund loans to companies or individuals through an online platform, receiving interest in return.
🏛️ Crowdlending Platform
A company that connects investors with borrowers, managing payments, information, and contracts.
🏦 Originator
A financial entity or company that originates (creates) loans and lists them on the platform. They assess borrower risk and manage the repayment process.
👤 Borrower
A person or company requesting financing and committing to repaying it with interest.
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💼 Investor
An individual who provides capital to fund loans and receives periodic interest payments.
🛡️ Buyback Guarantee
A mechanism in which the originator commits to repurchasing a loan if it defaults (for example, after 30, 60, or 90 days), returning the principal and accrued interest.
📉 Default
The definitive non-payment of a loan. It may lead to recovery, restructuring processes, or partial loss of capital.
Return 10%-12% Up to 300€
⏰ Late / Arrears
A delayed payment that is still recoverable. It is not yet a default.
📊 Default Rate
The percentage of loans that have ended in default compared to the total funded. A key indicator of platform or originator risk.
🔢 LTV (Loan to Value)
The relationship between the loan amount and the value of the asset backing it. Example: a 50% LTV means the loan is half the value of the property or collateral.
📈 Net Return
The return after deducting losses from late payments, defaults, and fees. It is the real performance.
Return 10%-12% Up to 300€
📅 Loan Term
The total duration of the loan: it can be short-term (1–12 months), medium-term (1–3 years), or long-term (more than 3 years).
🎯 Rating
A risk assessment assigned to the borrower or originator by the platform.
🔄 Auto-Invest
A tool that allows for automatic reinvestment based on parameters such as country, loan type, originator, risk, or interest rate.
🏪 Secondary Market
A space where investors can buy or sell already active loans to gain liquidity before maturity.
Return 10%-12% Up to 75€
📤 Cashout
A feature that allows for closing investments quickly, usually by selling them to the platform or to other investors.
🏦 Cash Flow
Money coming in (interest) and going out (principal) month by month in your investments.
💱 Diversification
Spreading capital across multiple loans, originators, countries, or sectors to reduce risk.
🌍 International Diversification
Investing in various countries or regions to reduce macroeconomic risk and improve overall stability.
Return 10%-12% 2% Extra
📉 Amortization
The process of repaying the loan principal over time.
🔁 Compound Interest
Interest that generates new interest. In crowdlending, it happens when you reinvest the payments received.
⚖️ Country Risk
Risk associated with economic, political, or regulatory factors of a specific country.
🔍 Due Diligence
The process of analyzing a platform or originator to assess its reliability and risks.
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🏗️ Real Estate Crowdfunding
A subcategory where investors fund real estate projects, usually with more stable but less liquid returns.
📜 KYC (Know Your Customer)
A mandatory identity verification process on regulated platforms.
🔐 AML (Anti-Money Laundering)
Regulations to prevent money laundering; they usually affect registration and verification processes.
🧭 Tips for using this glossary correctly
- 📌 Consult complex terms before investing
- 📌 If an originator or platform uses unclear concepts, do more research
- 📌 Save this glossary and consult it when reading contracts or loan fact sheets
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🏁 Conclusion
Mastering crowdlending vocabulary is essential for investing safely. With this glossary, you will be able to better interpret metrics, understand real risks, and make more informed decisions on any P2P platform.
✨ Frequently Asked Questions (FAQ)
Is it necessary to learn all the terms to start?
No, but knowing at least the top 10 will greatly reduce your risk.
Do all platforms use the same terminology?
Most do, but some use their own unique terms. When you see something unfamiliar, check this glossary.
Should the terms be updated?
Yes. The sector evolves and new concepts appear every year.
🔍 Transparency Commitment
On our blog, we only share information about platforms that we have personally tested and in which we have invested. All our reviews are based on real experiences. Additionally, in each analysis, we will be introducing demonstration videos of our real investments.
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