Understanding Your Real Return: XIRR and Cash Drag
On this page
The rate a platform advertises and the return you actually earn are rarely the same number. Two things explain most of the gap: how a return is measured, and how much of your money sits idle between investments.
The advertised rate isn't your return
When a platform shows "12% APY," that's the rate on money that's actively lent out — not the return on your account as a whole. Your account also holds cash waiting to be invested, loans repaid early that haven't been reinvested, and transfers still in transit. None of that earns 12%. Blend it all together over a year and your real return is almost always lower than the number on the platform's homepage.
XIRR: the metric that accounts for timing
XIRR (Extended Internal Rate of Return) is the standard way to measure the real annualized return of an account where money moves in and out at irregular dates — deposits, withdrawals and repayments that rarely land on a neat monthly schedule, which describes almost every P2P portfolio. Unlike a flat average rate, XIRR weighs each cash flow by when it happened: €1,000 invested for eleven months isn't the same as €1,000 invested for one. It's the closest thing to "what did I actually earn" — but it needs a complete, precisely dated history of every deposit, withdrawal and repayment, for every platform.
Cash drag: the return killer no platform advertises
Cash drag is the share of your capital that isn't earning anything at a given moment — money sitting in a platform wallet waiting to be auto-invested, funds in transit between platforms, or proceeds from a repaid loan that haven't found a new one yet. It never shows up in an advertised rate, but it's fully present in your actual annual return: a portfolio earning 12% on invested capital while sitting 15% idle over the year is closer to a 10% real return, not 12%.
Why P2Peasy doesn't show you a single XIRR figure
A trustworthy XIRR needs the exact date and amount of every cash movement, sourced directly from each platform. Most platforms don't expose that as a clean, complete export, and stitching together approximate dates would produce a number that looks precise while being quietly wrong. Rather than manufacture a confident-looking figure from incomplete data, P2Peasy shows you what it can actually stand behind: how your invested capital evolves over time, and a projected income based on the rate you enter — with pending transfers tracked separately, so idle cash doesn't hide inside one headline number.
What to watch instead
Keep an eye on your pending transfers — that balance is your cash drag made visible. If it stays high for weeks, that capital isn't working for you, whatever your invested rate says. Watch your capital evolution chart month over month: a portfolio that isn't growing roughly in line with your entered rate is telling you something the headline numbers won't.