Why is the return you actually receive often lower than the rate on the offer?

The rate on an offer is what the project owner promises, not what you end up receiving. Several things reduce it:
- Defaults: if a borrower cannot repay, you may lose part or all of that capital, which pulls down the return of the whole portfolio.
- Fees: many platforms deduct a servicing fee from the gross yield.
- Tax: interest income is usually taxable, and the rules depend on your country.
- Delays: money that comes back late earns less per year than planned, and sits idle while you wait.
- Cash drag: money waiting to be invested earns nothing.
Spreading across many loans reduces the effect of a single default, but does not remove it. When you compare platforms, look for figures on net returns after defaults and fees rather than headline rates. Capital is at risk: crowdfunding investments are not covered by deposit guarantee schemes, can lose part or all of their value, and may be hard to sell before the end of their term.