My first impressions on doFinance
DoFinance is a p2p lending platform offering consumer loans to its investors. It’s part of Alfa Finance group, and it only offers loans originated from lenders belonging to the same group (KreditCepat, TaniKredyt and Opoqa Finance).
The loans available come from Poland, Georgia and Indonesia. The 3 markets are different enough that their ups and downs are not correlated and you can create a relatively diversified portfolio on DoFinance.
While I don’t like payday loans, Alfa Finance seems like an interesting company. They’re currently hiring – QA engineers, full stack developers, data scientists, so they must be doing well.
All the loans have a buyback guarantee. I don’t see payment delays because no loan is late. At the end of the loan term, it’s bought back by the loan originator, so I don’t need to know if that specific borrower was late or not.
- Launched: 2017
- Headquarters: Latvia
- Loan types: Short-term consumer loans
- Loan terms: from 7 days up to 5 years
- Loans from: Latvia, Poland, Indonesia
- Loans funded: ???
- Investors: 4000
- Interest rates: 5% to 11%
- Fees: no fees
- Minimum investment: 10 EUR
- Currency: EUR
- Secondary market: no
- Auto-invest: yes
- Buyback guarantee: yes
- Accepts investors from: EEA Countries, Switzerland
- Bonus: option to invest with a 12% interest rate(with the link below)
Who can join doFinance
If you want to register on doFinance, you need to be a resident of an EEA country. Although you can also select China, India, Japan, Malaysia and Thailand when you create your account. I don’t know if that’s a mistake or you can invest from one of these countries.
Investing in doFinance
You can invest in some auto-invest setups that have an expected annual return from 5% to 11%.
The setups are the following:
- 5% return: you can retrieve all your funds in 7 days without losing any interest gained; the investment term ranges from 1 month to 1 year
- 7% – you receive your funds in 30 days with 5% interest (for those 30 days) or in 60 days with 7% interest; investment terms from 2 to 60 months
- 9% and 11% return – you receive your funds back in 90 days without interest (for those 90 days); you receive the interest earned each 30 days; investment terms from 6 to 60 months
Their setups are a bit over-complicated. If they have an 11% offer, nobody would choose the 9% one. But they only recently added the 11% option because they were losing investors to other platforms with more competitive rates.
So, how is doFinance different from any other p2p lending platform out there? It makes it undesirable for you to invest manually.
Besides these auto-invest options, they do offer you the possibility to manually invest in individual loans. With a catch. 2 of them actually.
The first is that you can only invest in loans with a 5% to 9% interest rate. So, you’ll get worse returns than if you invested automatically with the 11% setup.
The second is that you cannot cancel the loans if you want to exit your investment earlier. You’ll need to wait until the loan matures to recover your invested capital.
Why invest in doFinance
Since I plan to invest long-term, the only setup that makes sense for me is the 11% return auto-invest profile.
All loans come with a buyback guarantee and doFinance doesn’t use any tricks to lower my payments like “grace period” or “no interest paid for late loans”.
The maturity date for the 11% setup ranges from 6 months to 5 years. One interesting use for this would be to set it up for 5 years. Since I don’t have access to the accrued interest until I either cancel the profile or it matures, I would have to pay my taxes for the interest received only after the 5-year term.
How are my test investments doing so far?
I’ve invested 100 EUR last month in the 7% and 9& auto-investment funds. Then, doFinance decided to add back its 11% interest fund, so I’ve added 50 EUR to this fund as well.
I’ve already requested a withdrawal for the 7% interest fund. Because I want to keep the 0.17 EUR income received so far, I’ll be able to withdraw those funds on May 31st.
Conclusions on doFinance
For now, I’m still trying out the platform before I decide to invest more funds into it.
I like the buyback guarantee and the fact that I can defer paying my taxes if I want to invest long term here.
I don’t particularly like the current interest rates offered. There are many other similar platforms offering at least 12% interest rates.
The auto-invest options are a bit confusing and they have all sorts of rules that complicate unnecessarily the platform.
I do like that doFinance sort of forces you to invest using the auto-invest tool. While you do have the possibility to invest manually in selected loans, the returns are a lot lower and you can’t exit early from the investment.
If you plan to open an account on doFinance you could use my referral link. 90 days after registration you’ll receive the option to invest in a 12% interest auto-invest plan (instead of the 11% one available to everyone).