Why a 19–25% APR Loan Does Not Mean a 19–25% Portfolio Year

The loan rate applies to the capital committed to that particular loan during its funded term. A portfolio year includes both earning periods and periods when repaid capital remains uninvested. Those idle periods can pull the annual result below the loan rate without a single missed payment.

This explains a common mismatch in p2p lending returns: every loan can pay as agreed while the portfolio records a lower annual result because some capital spent time as idle cash.

Does APR already account for time the money sits uninvested?

No. The APR on a loan does not include the investor's waiting period after that loan repays. It says nothing about how quickly another suitable project becomes available.

Under the bullet model, principal is due in one payment at maturity; published loan terms run from 4–16 months. Once the loan has been fully repaid, that principal no longer earns interest from it. Repaid funds become available for collection and subsequent investment, rather than automatically entering another loan.

During the active term, interest is distributed monthly or weekly according to the project stage's settings. The investor collects available amounts through a claim or leaves them on the smart contract until later.

For monthly stages, the platform describes the first payout as one month after pool closure. Its detailed guidance also mentions one-week first payouts for weekly stages, so the relevant schedule should be confirmed for the project.

Accrual starts when the pool closes. Waiting for the first scheduled distribution is therefore different from leaving repaid principal uninvested: the former is payment timing, while the latter is an earning gap.

The standard investor platform fee is 0%, with no holding or inactivity charge. An uninvested balance earns no loan interest. Allocating funds to another pool does not start accrual before that pool closes.

A shorter loan returns principal sooner, creating an earlier need to decide what happens next. Repeated short loans can create several opportunities for idle time on the same capital. Longer loans generally create fewer repayment transitions within a given year.

Is a 4-month loan or a 16-month loan more exposed to idle cash drag?

A four-month loan creates more frequent repayment transitions than a sixteen-month loan if an investor keeps using similar terms. Each transition can introduce another period without loan interest.

The outcome still depends on funded dates, repayment dates, and the length of each idle interval.

Assume all starting capital passes through successive loans at the same rate, with one idle interval. All obligations are met, and interest payments are kept separate rather than reinvested.

The following figures are illustrative only. The model assumes simple daily interest on a calendar-year basis, which is an arithmetic assumption rather than confirmation of any project's contractual day-count method.

The calculation follows those assumptions:

The second loan is still active at the measurement date. Its interest earned is included even if some is paid later; this table is not a statement of cash received.

Fees, taxes, defaults, and additional contributions are excluded. Actual idle time depends on suitable project availability and funding timing, neither of which this model predicts.

The 19–25% APR shown on a loan listing is the rate for that loan's funded period — it is not a forecast of annual portfolio return, and any calculation showing the effect of idle time between loans in this article is illustrative only, not a projection.

Repaid capital resumes earning loan interest when another investment enters its funded period. A shorter idle interval reduces the gap in an otherwise unchanged calculation. That requires a suitable project to be available and funded at the relevant time.

There is no timetable ensuring that new projects open when an investor's principal returns. An available listing also does not mean interest begins immediately after the investor commits funds.

Does claiming interest more often cost anything?

Yes. Each claim is an on-chain transaction requiring a Base network gas fee, paid to the network rather than 8lends. More frequent claims can therefore add transaction costs, especially when each payment is small.

One platform page gives a reference of around $1–3 for an investment transaction, while its fee FAQ describes lower costs. Treat the range as indicative, not a fixed price for every claim. Check the wallet's transaction estimate before confirming.

Leaving available interest unclaimed changes collection timing. It does not automatically reinvest that interest.

8lends is operated by CLEARCHAIN CORP, a Canadian company registered with FINTRAC as a Money Services Business (registration No. C100001102). Maclear AG (Switzerland), a member of PolyReg SRO, acts as the independent Collateral Agent — it does not operate the platform, is not its parent company, and does not hold investor funds.

Investing involves risk, including possible loss of principal. Returns are not guaranteed.