Net Returns Calculations

To calculate the annualised net return shown on your dashboard, we consider the return generated from the capital employed for each period. A period is defined as the number of days that pass in which the capital employed remains constant.

The calculation of capital employed is taken from the sum of deposits less withdrawals. (i.e. funds added minus funds withdrawn), on a cumulative basis. However, after making a profit many users will start to withdraw more than they have deposited.  When this happens, to avoid using a negative figure, we change the formula to use the sum of deposits, less withdrawals plus the NetGains.

How does it work?

We aggregate NetGains as follows:



We then annualise the rate of return for each period in the series:



The more frequently you add or withdraw credit from the platform, the more periods you will have in your series. This improves the accuracy of how we track the capital employed. We also take a time-weighted average of the annualised rate of returns against the capital employed, so that longer periods of consistency weigh heavier in the formula than single days of unusually high losses or gains.


This method considers the following:

  • It is based on historic data
  • Defaults are discounted according to their probable loss
  • Idle (unemployed) capital on the platform contributes to a lower yield
  • The benefit of compounded returns is included

Uninvested cash earns zero interest. So any available cash not on loan will reduce your Net Returns.

Every portfolio is different, and historic performance may not be indicative of future performance.

We estimate a recovery rate of around 40% (depending on security offered) and so the forecast bad debt level is estimated to be between 3% and 7% though may be higher or lower, depending on lending habits.

Defaulting loans are proportionally marked-down in the Net Return calculation; until either recovered or crystalised as a bad debt.

Compounding your returns by lending your interest earnings is one of the best ways to maximise your returns.

You should periodically check your individual Net Return performance against the histogram of all lenders, available on the stats page. This will help you to understand your performance in context with other lenders. If you feel that your portfolio is underperforming, compared to other lenders, please read more articles from our lender education section, or email us asking for a review of your account.

Thank you
Your Bid's been