How to Invest in Private Credit: Platforms and What to Expect (2026)

Knowing how to invest in private credit has shifted from "know someone at a fund" to "open an account online." Platforms like Percent, Yieldstreet, and Groundfloor now offer individual investors access to private loans yielding 8–14%, with minimums starting as low as $10. This guide covers the specific platforms, mechanics, and realistic expectations for putting your money into private credit in 2026.

Quick Primer: What Private Credit Is

Private credit means non-bank lending — loans originated outside the traditional banking system. Companies and borrowers that can't or prefer not to use banks turn to private lenders, paying higher interest rates in exchange for faster execution and flexible terms.

As an investor, you fund these loans (directly or through a platform) and earn interest income. The loans don't trade on public exchanges, which means less liquidity but higher yields than comparable public bonds. For a full overview of the asset class, see what is private credit.

How to Invest in Private Credit: Platform Options

Percent

Percent is the most focused private credit platform available to individual investors. Every deal on Percent is a private credit transaction — no real estate, no equity, just lending.

How it works: Percent partners with specialty lenders who originate loans (small business, consumer, trade finance). These lenders bring deals to Percent, which structures them as notes and sells them to investors. You pick specific deals based on term length, yield, and borrower type.

Minimums: Typically $500 per note, though some offerings go lower.

Yields: 9–16% APY depending on deal risk and duration. Short-term deals (3–9 months) tend to yield 9–12%, while longer or riskier deals can reach 14–16%.

Transparency: Percent stands out for its data. The platform publishes detailed performance metrics — default rates, recovery rates, and actual realized returns — across all deals. This level of transparency is rare in private credit investing and lets you make informed decisions.

Who it's for: Accredited investors who want direct control over deal selection and appreciate data-driven investing. Percent's granularity rewards investors who spend time evaluating individual opportunities.

Yieldstreet

Yieldstreet offers private credit alongside other alternative asset classes — real estate, art, marine finance, and more. This breadth makes it a one-stop shop for alternative investing, though it means less specialization in any single area.

How it works: Yieldstreet sources and structures deals across multiple asset classes. Some are direct loans, others are fund-of-funds or pooled vehicles. The platform offers both individual deals and a diversified "Prism Fund" that spreads your capital across multiple strategies automatically.

Minimums: $2,500 for most individual offerings. The Prism Fund starts at $2,500 and accepts non-accredited investors — one of the few ways to access private credit without meeting income or net worth thresholds.

Yields: 8–12% target yields for most private credit offerings. The Prism Fund targets 8–10% across its blended portfolio.

Who it's for: Investors who want private credit as part of a broader alternatives allocation and prefer a platform that handles diversification across asset classes. The Prism Fund suits those who want hands-off exposure.

Groundfloor

Groundfloor occupies a unique position: private credit investing with no accreditation requirement and a $10 minimum. The catch — it's exclusively short-term real estate debt.

How it works: Groundfloor originates bridge loans to residential real estate developers and fix-and-flip investors. Each loan is graded A through G based on the borrower's experience, loan-to-value ratio, and property characteristics. You pick individual loans or use the automated investing feature.

Minimums: $10 per loan. Seriously.

Yields: Target yields range from 5.5% (Grade A) to 14%+ (Grade G). Historical realized returns have averaged approximately 10% across all grades, though individual loan outcomes vary.

Terms: 6–18 months for most loans, making Groundfloor one of the shortest-duration options in private credit. This shorter lock-up is a major advantage for investors who want to test the waters without committing capital for years.

Who it's for: Anyone wanting to start with how to invest in private credit at the smallest possible scale. Groundfloor's low minimum, short terms, and no accreditation requirement make it the ideal entry point.

Building a Private Credit Portfolio

Diversification Strategy

The golden rule of private credit investing: spread your capital across many loans. A single loan default hurts a lot less when it's 2% of your allocation versus 25%.

On Percent, invest across 10–20+ deals spanning different borrower types, industries, and term lengths. On Groundfloor, spread across 30–50+ loans at different risk grades and property types. On Yieldstreet, the Prism Fund handles diversification automatically.

Laddering Maturities

Stagger your investments across different maturity dates. If all your private credit capital is locked in 12-month notes, you have zero flexibility for 12 months. By spreading across 3-month, 6-month, and 12-month terms, you create rolling liquidity — some capital matures every few months, which you can either reinvest or withdraw.

A practical ladder: invest one-third in 3-month deals, one-third in 6-month deals, and one-third in 12-month deals. As each tranche matures, reinvest into the longest duration to maintain the ladder.

Allocation Sizing

Private credit deserves 5–15% of a diversified portfolio for most investors. Within that allocation:

• Conservative: 70% Groundfloor (Grade A-C loans), 30% Percent (shorter-duration, lower-yield deals). Target blended yield: 8–10%.
• Moderate: 50% Percent (mix of durations), 25% Yieldstreet Prism Fund, 25% Groundfloor (Grade C-E). Target blended yield: 10–12%.
• Aggressive: 70% Percent (longer-duration, higher-yield deals), 30% Groundfloor (Grade E-G). Target blended yield: 12–15%.

What Returns to Realistically Expect

Platform-reported yields and actual realized returns often differ. Here's what investors have actually experienced:

Percent: Realized net returns have averaged approximately 9–12% across the platform's history, after accounting for defaults and recoveries. Some individual deals have defaulted, but the portfolio-level experience has been solid for diversified investors.

Yieldstreet: Historical returns on private credit offerings have ranged from 7–11% net. The platform had some high-profile losses in its early marine finance deals, but has tightened underwriting since. The Prism Fund targets 8–10%.

Groundfloor: Historical average returns of approximately 10% across all loan grades. Grade A loans have returned roughly 6–7% with very low default rates, while Grade G loans have returned higher but with more defaults. Diversification across grades smooths results.

For a comparison with traditional fixed income, read private credit vs bonds.

Risk Management

Default monitoring. Check your portfolio monthly. Most platforms provide updates on loan performance, and Percent flags troubled deals early. If you see patterns — multiple defaults in the same sector or borrower type — adjust your future allocations.

Platform diversification. Don't put all your private credit capital on a single platform. Splitting between Percent and Groundfloor, for example, protects against platform-specific risks (operational failures, business model changes, or shutdown).

Reserve for reinvestment. Keep 10–15% of your private credit allocation in cash, ready to deploy when attractive deals appear. The best opportunities are often time-limited.

Know your exits. Most private credit investments are illiquid until maturity. Percent offers a secondary market for some notes, and Groundfloor loans mature quickly, but you generally can't sell out early. Only invest capital you won't need until the maturity date.

Tax Considerations

Private credit income is taxed as ordinary income — your highest marginal tax rate. For investors in the 32–37% federal bracket, this significantly impacts net returns.

Consider holding private credit investments in a Roth IRA or Traditional IRA to shelter income from current taxation. Some platforms integrate directly with self-directed IRA custodians. Groundfloor offers IRA accounts through its platform, making the process seamless.

If investing in a taxable account, a 12% gross yield becomes roughly 7.5–8% after federal taxes for high earners. Still attractive, but the tax drag is real and should factor into your allocation decisions.

Getting Started Today

Week 1: Open accounts on Percent, Yieldstreet, and Groundfloor. Fund each with a small amount — even $100 on Groundfloor.

Week 2–4: Make 5–10 small investments across different deal types and risk levels. Study the platforms' data and reporting.

Month 2–3: As initial investments pay returns (especially Groundfloor's shorter-term loans), evaluate your experience and decide how much capital to allocate long-term.

Month 4+: Scale to your target allocation, maintaining diversification across deals, platforms, and maturities.

Frequently Asked Questions

What is the minimum to start investing in private credit?

Groundfloor requires just $10 per investment and no accredited investor status. Percent starts at $500 per note but requires accreditation. Yieldstreet's Prism Fund starts at $2,500 and accepts non-accredited investors. You can build a meaningful private credit portfolio with $1,000–$5,000.

How safe is private credit investing?

Private credit carries real default risk — borrowers can and do fail to repay. Diversification reduces this risk significantly. A well-diversified portfolio across 20+ loans typically experiences 2–5% default rates in normal conditions, with partial recoveries on defaulted loans. Net losses of 1–3% per year are realistic for diversified portfolios.

How does private credit compare to high-yield bonds?

Private credit offers higher yields (8–14% vs. 5–8% for high-yield bonds) but less liquidity. High-yield bonds trade daily on public markets; private credit locks your capital until maturity. Private credit also provides stronger covenants and more direct control over lending terms than bond investing.

Can I lose money in private credit?

Yes. Borrower defaults can result in partial or total loss of individual investments. Even with collateral and recovery processes, you may not get all your money back on a defaulted loan. Diversification is the primary defense — a single default in a 30-loan portfolio has minimal impact on overall returns.

How often do I receive interest payments?

It varies by platform and deal. Percent pays monthly or quarterly interest on most notes. Groundfloor typically pays principal plus interest at loan maturity (6–18 months). Yieldstreet's Prism Fund distributes quarterly. Check the specific terms of each investment before committing.

Is private credit better than REITs for income?

Private credit typically offers higher yields (8–14%) than public REITs (4–6% dividends). REITs provide daily liquidity and potential price appreciation, which private credit lacks. Private credit offers more predictable income with less price volatility. The best approach for income investors: own both.

ModernAlts is an independent research platform. Nothing in this article constitutes investment, legal, or tax advice. Alternative investments involve risk including possible loss of principal.