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Investing always carries some form of risk. But investing doesn’t have to be scary. Fear comes from the unknown and knowing what you’re getting in to will prevent future jump scares.
When people hear “consumer lending”, their first thought might be “Isn’t that risky?” and that’s a fair question to ask. In the spirit of spooky season, let’s uncover how “scary” risks can be managed once you know what to expect.
What kind of risk are we talking about?
When you invest in consumer loans, your biggest risk would probably be borrower default.
But here’s what you should know about how we handle this at goPeer:
- goPeer thoroughly evaluates every borrower before they’re approved. No two applications are treated the same, and we carefully assess each borrower’s situation.
- Each loan is assigned a risk grade based on our proprietary credit model, so you know what kind of return and risk profile you’re taking on.
- You’re not putting all your eggs in one basket; investors can diversify across multiple loans. You can invest as little as $10 for every loan of your choosing.
The idea isn’t to eliminate risk (that’s just not possible), but to minimize and spread it out wisely.
goPeer’s risk management framework
Pre-screening & underwriting
- goPeer thoroughly checks the borrower’s credit profile (history, income, debt, and more).
- Only a small percentage of applications make it through the approval process.
Risk-based pricing
- Loans with higher risk potential are graded accordingly, the higher the risk, the higher the interest rate.
- This ensures investors are compensated for the level of risk they’re taking on.
Collection efforts
- If a borrower ever misses a payment, our collections team steps in right away.
- We work with borrowers to get back on track and escalate collection efforts if needed.
Loss buffers through diversification
- Defaults may happen, but diversified portfolios can help mitigate this.
- Historical performance shows investors who spread their investments across multiple loans generally see less volatility in returns.
But how much risk are we really talking about?
Annual returns on the platform have averaged about 10% since goPeer’s inception. Over $9 million in interest has been earned by investors through our 5 years as a company. But note that past performance is not indicative of future results.
We also share performance reports right on your investor dashboard so you can keep an eye out on how your portfolio is doing. No Ouija board required.
Final Thoughts
Risk gets such a bad rep, and understandably so. But it’s also what allows investors to earn returns at an attractive rate. The trick is to understand where the risk lies and use the tools available to you to manage it.
Whether you’re dipping your toes in private credit or growing your allocation, remember this: Risk isn’t spooky if you know what to expect.
Important footnote & disclaimer:
The information contained on this website and in any related materials, including but not limited to blog posts, charts, statistics, projections, or other content (collectively, the “Information”), has been prepared by goPeer for general informational and educational purposes only. The Information does not constitute, and should not be construed as, an offer to sell or a solicitation to buy any securities or investment products. The Information does not constitute legal, tax, investment, financial, or accounting advice, and should not be relied upon as such.
Any tables, charts, forecasts, forward-looking statements, or statistical analyses presented are based on assumptions, estimates, or projections made by goPeer that may not reflect actual future performance. These forward-looking statements involve known and unknown risks, uncertainties, and other factors (many of which are beyond goPeer’s control) that may cause actual outcomes to differ materially from those expressed or implied in the Information. Actual results may vary significantly, and past performance is not indicative of future results.
No portion of the Information should be interpreted as a recommendation or endorsement of any specific investment strategy, security, loan, or product. Investment decisions should always be made based on the investor’s individual objectives, financial situation, and risk tolerance, in consultation with appropriate legal, tax, and financial advisors.
Investing involves risk, including the possible loss of principal. Past performance is not indicative of future performance, and returns are not guaranteed. The stated return is calculated using an IRR (Internal Rate of Return) formula and based on the rate earned on every dollar actively invested and does not include uninvested cash. This return is rounded down to the nearest whole percentage point and is calculated before taxes and fees. Information is based on data available as of October 17, 2025.
