Peer To Peer Investment In New Zealand

A Beginner Guide To Peer To Peer Investment

New Zealand Investment Lesser Known Investments

P2P Investment

Peer to peer (P2P) lending can be a great way to invest your money or borrow money at an affordable rate. In this article, we look at how it works, the pros and cons of P2P lending, and where you can find the best P2P lending platforms in New Zealand.

P2P Investment In New Zealand

Check out what is peer to peer investment and how it works. P2P Investment

Find out how peer to peer investment works in New Zealand and how you can profit from it. How P2P Investment Works

Find out how much money you need to start investing in peer to peer platforms. Minimum investment in P2P

Check out the average returns with peer to peer investment in New Zealand. Returns

Find out how to get started with peer to peer investment in New Zealand. How To Get Started

Find out some of the main risk and rewards associated with peer to peer investment in New Zealand. Risk & Rewards with p2p investment

Check out some of the best peer to peer investment companies in New Zealand. P2P Investment Companies in NZ

Peer To Peer Investing in NZ

Peer to peer lending (P2P) is a way to borrow money without going through a traditional bank. Instead, you can go online and borrow from everyday people who have money to lend. It’s a great alternative for people who don’t want to deal with the banks, and it can be a good investment for those willing to lend their money.

Peer-to-peer lending online platforms match investors with individuals or businesses seeking a loan. Borrowers apply for loans directly with the peer-to-peer lending company, which evaluates the application and posts it online. Investors can view loan listings and choose which ones to fund. The peer-to-peer lending company transfers the funds from the investor to the borrower, and each month the borrower makes payments back to their investor(s).

Peer-to-peer lending is more accessible than traditional funding methods, making it ideal for those who may not be approved by a bank or other institution.

As a borrower, this type of arrangement can be very beneficial if you are seeking a low-interest rate on a short-term loan.

How does Peer to Peer Investment Work?

For Investors:

Investors can choose which borrowers they would like to lend their money to by browsing through the loan listings. The investor can choose which loans they would like to invest in and how much they want to invest in each one. They can spread their investment across multiple borrowers as well as different loan terms and amounts, allowing them to diversify their portfolio and reduce risk.

For Borrowers:

A borrower creates a listing on the platform, stating how much they want to borrow, what they want to use it for, and how long they need to pay it back. The borrower then waits for lenders to fund the loan in full. Once the loans are fully funded, the borrower receives their money and pays it back monthly over a fixed period of time. The repayment includes both capital and interest.

How Much do You Need to Invest?

This depends on the investment strategy you want to employ. There are two main strategies we recommend. You can split your money across as many loans as possible, or you could go with a more concentrated approach and put more money into fewer loans.

You can start investing with just $200. If you have $10,000, that gives you enough to put some money into a lot of different loans without spending too much on each one. A smaller amount still lets you diversify to protect yourself against defaults – it just means you won’t be able to put as much money into each loan.

If you’re trying to build a larger portfolio, we recommend investing in fewer loans and spreading your risk among them. This way, you don’t have to spend as much money on each loan (which means more flexibility for how much interest you earn). 

What are the returns like in 2022

Peer-to-peer lending has a lot to offer investors looking for higher returns and diversification. Most peer to peer lending investments are medium to long term (1-5 years typically), so you’ll need to be comfortable with locking your money away for that length of time.

In some cases, your investment is also not protected in the same way that your bank deposits are, which is why its important to make sure you’re investing through a legitimate platform that takes measures to protect your capital.

The peer-to-peer lending platforms publish the average interest rate on the loans they offer. They are usually around the 10% mark. You get an attractive interest rate on your investment, and the borrower gets a lower interest rate than they would with a bank loan. It’s a win-win situation!

So, what are the peer to peer lending investment returns in New Zealand? Returns are dependent on the term of the loan and the risk associated with it. Generally, the longer the term of the loan and the higher the risk, the higher the rate of return (interest rate).

Here’s an example:

If you invested $5,000 at an interest rate of 8% over two years, you would earn your original $5,000 back plus $800. By comparison, if you had left that money in the bank at 2%, it would have earned only $200 over two years. If you invested $50,000 at 8% over two years, your profit would be $8,000 instead of $2,000!

Peer to Peer Lending in New Zealand: How to Get Started?

To some people, peer-to-peer lending seems like a tricky business. They think that it’s not worth the risk, but it is actually quite straightforward. The way it works is that you invest in loans and collect interest on your investment. In other words, you become the lender, and whoever needs a loan to buy a car or consolidate debts becomes your borrower.

You start by opening an account with one of the platforms, such as Zagga, Harmoney, or Squirrel Money. Then, you set up your investor profile and decide how much money you want to lend out — also known as investing capital.

Investing in P2P loans is simple.

Here are the steps to get started with Peer to Peer Lending in New Zealand:

      1. Sign Up – You need to be over 18 years old and a New Zealand resident with a New Zealand bank account and IRD number. You will also need to confirm your bank account details so that we can deposit funds into your account.
      2. Fund your Wallet – Once you have registered, you can transfer money from your bank account into your chosen P2P platform’s wallet using internet banking or a credit card (Mastercard or Visa). Funds deposited by credit card will incur a merchant fee of 2%.
      3. Start Bidding – Browse the borrower profiles and bid on loans that match your risk appetite and investment criteria. Set how much you want to invest in each loan and how much interest you want to earn. The automatic bidding tools do all the hard work for you!
      4. Manage your Portfolio – Keep track of how much you have invested, how much interest you are earning, when payments are due to be paid back, and what’s outstanding on each loan.

What are the Pros and Cons of Peer to Peer Lending in New Zealand?

Benefits include:

Access to capital: For borrowers, it’s a way to secure funding when they may not meet traditional bank requirements or want to avoid paying high fees associated with overdrafts or credit cards. For lenders, it offers better returns than traditional savings accounts.

Hassle-free: Borrowing money from a P2P lender is far simpler than going to a traditional bank. There are no endless forms or meetings, and the whole process can be done online.Loans are often processed more quickly than if you go through a bank.

Diversify your portfolio: Perhaps you are already in the stock market or have some property investments? The beauty of P2P lending is that it is another investment avenue for you to choose from and diversify your portfolio.

Flexibility: You can use the loan for practically any purpose (as long as it’s legal!).

Lower fees and interest rates: Platforms typically charge lower fees than banks, and interest rates can be lower for borrowers than other forms of credit.

More control: When you put your money into a lot of investments, you’re leaving your capital at the mercy of other people. With P2P lending, you’re choosing who you lend to yourself, which means that you have some degree of control over the risk level and rewards involved in each investment.

If you have a low credit score, you might still be able to borrow from some P2P lenders.


Risk of default. If a borrower cannot pay back their loan, then it’s likely that they will default on their payments, and investors will lose part or all of their capital (depending on whether they have insurance).

Poor returns if re-investing interest payments only. If you keep re-investing interest payments only (without adding additional capital), then your returns will decrease.

Less regulation and security. Peer to peer loans are not regulated by the Reserve Bank in New Zealand, which means that they’re not part of the government deposit guarantee scheme that covers bank deposits up to $500,000.


Top 3 companies that offer peer to peer investment in New Zealand

When you want to invest your money into P2P, you need to choose the right platform. Not all companies are created equal, and each has its own advantages and disadvantages that you need to consider.

In New Zealand, investors have access to three major P2P platforms: Harmoney, Lending Crowd, and Squirrel Money. Together they’ve lent more than $1 billion since launching.

Squirrel Money

Squirrel Money is also one of the largest peer to peer investment companies in New Zealand, having serviced over $100 million worth of loans since it started operating in 2015.

They have a focus on home improvement loans, personal loans, car loans, and debt consolidation loans with an interest rate range of 5.45% – 24.95%.


Harmoney is the first company to offer peer-to-peer lending in New Zealand. The company launched its services in 2014, and it has already serviced more than $500 million worth of loans.

The company has a specific focus on personal loans and credit card refinancing, so if you want to invest through Harmoney, then this is where your investment money will be going.


LendingCrowd was established in 2014 by entrepreneurs who wanted to reduce the barriers and costs associated with borrowing and investing money. LendingCrowd has helped hundreds of SMEs from all sectors across New Zealand. The platform offers term loans, business overdrafts, and business leases. Loans range from $2K to $1M, with repayment terms of 1 to 5 years. The interest rate range is 5% to 21%.

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