Mintos is a peer to peer lending platform founded in Latvia in 2015. Currently, they offer an easy way to invest in loans from 30 countries originated from 65 lending companies. Since they started, they funded loans worth more than 3 billion EUR.
You can start investing in loans with multiple currencies with only 10 EUR.
- Loan types: Personal Loans, Mortgage Loans, Business Loans, Car Loans, Invoice Financing, Short-term Loans, Pawnbroking Loans, Agricultural Loans
- Loan terms: up to 20 years
- Interest rates: 7-18%
- Fees: no fees
- Minimum investment: 10 EUR
- Currency: EUR, GBP, USD, RUB, SEK, DKK, etc.
- Secondary market: yes
- Auto-invest: yes
- Buyback guarantee: yes
- Bonus: 1% of your invested funds in the first 90 days (using the link below)
- Last update: July 2019
- Started Investing: June 25th, 2018
- Current value: 3924 EUR
- Profit: 430 EUR
- Net annual return: 11.24% (current average interest rate 14.18%)
I’m mainly investing through the auto-invest tool, so my Mintos portfolio has been running by itself for the most part.
6 months ago I did an update on my auto-invest profile, removing some bad loan originators and also increasing the loan terms from a maximum of 14 months to 24 months. Since then, I get a bit better returns and fewer late loans.
In April, I’ve updated my auto-invest settings again. I’m getting more confident in Mintos, so I’ve removed the upper limit for the loan terms (I also get better interest rates). I only invest now in loan originators that pay interest on late loans and have a decent grace period (<7 days).
All the loans I’ve been investing in have a buyback guarantee. This means I get a bit lower returns (the maximum interest rates I found were at 14%) but my portfolio feels safer.
I’ve also moved 500 EUR in the Invest & Access fund Mintos added in June, to see how it performs. After a few weeks, I cancelled my Invest & Access investment due to its disappointing performance and poor loan originator selection.
How it works
Mintos is a marketplace where other loan originators (lending companies) offer their current loans for investment. You invest in small parts of these loans, in order to spread your risk as much as possible.
Each lender has different types of loans (consumer, short-term, business, invoice financing, etc.), from different countries.
Mintos rates these lenders from A to D (around 10 levels) based on company health, financial status, quality of loans.
Can I join Mintos
Starting with June 2019, you can’t join Mintos anymore if you reside in the UK. Not because of Brexit, it’s more because of the UK’s FCA (Financial Conduct Authority) that requires Mintos to do some changes.
Why invest in Mintos
Mintos is one of the best on the peer to peer market because of the large amounts of loans it provides, the different types of loans offered, the multitude of countries it offers loans from and the many loan originators on the platform. All these allow investors to diversify their portfolio and lower the risk of losing money.
It’s a big marketplace
The platform has loans from 30 countries like Armenia, Denmark, Georgia, Latvia, Moldova, Spain, Sweden, Zambia and many others.
The types of loans offered are also well-diversified: mortgage loans, car loans, invoice financing, business loans, short-term loans, personal loans and agricultural loans.
Mintos has registered investors from all over the world. There are currently 100.000+ investors registered on the platform. The average investment sum per investor is 4.706 EUR.
The average net annual return for investors is 11.7%. The loan interest rates range from 5% to 18%, although the ones I use, with a buyback guarantee, have a cap at around 14% interest rate.
Many loans come with a buyback guarantee policy. If the loan payments are more than 60 days late, the loan originator will purchase back the investment from you.
Some of the loan originators don’t pay interest for the period the loan payment was late. When you choose to invest in a loan, have a look first at the loan originator and if it pays interest for late loans or not. More on that later in this review.
The loans with a buyback guarantee come with a slightly lower interest rate than loans without it. I can’t find loans with 18% interest rate and with a buyback guaranteed policy. The interest rates are around 10-14% and that’s still decent. I’d advise everyone to only invest in loans with a buyback policy but this depends on each one’s risk profile.
Investing in Mintos
Manual investment or using the auto-invest tool? Playing around on the secondary market buying low and selling high? It’s your call.
The primary market
There are hundreds of thousands of loans available on the primary market. Each loan has additional details about the borrower, payment schedule, collateral (if any).
The number of filters offered on the page could satisfy even the biggest control freaks in the world. There’s interest rates range, loan term range, currency, loan originator, country, loan-to-value ratio (if the loan has collateral), type of loan, buyback guaranteed or not, whether you invested already in it or not, and so on.
If you have some preferred filters you do every time you search for loans, you can save them and reuse them.
Mintos Secondary Market
The interface and the filters are similar to the ones on the primary market.
You can use the secondary market from time to time to find loans that have better interest rates than the ones offered at the moment on the primary market. The interest rates offered on the loans from the primary market vary from time to time. Some days you can find good deals with a 14% interest rate, other days you’ll only find deals at 10.5% interest rate. These low-interest-rate days are a good reason to check if the secondary market doesn’t have better deals at a 12% – 14% interest rate.
Mintos Auto Invest
You don’t have enough time or will to check in daily on Mintos and invest your funds in new loans? No problem. Mintos has an auto-invest tool that you can set up and let it do the investment for you. You can turn your Mintos investment profile into a passive income tool.
If you don’t know what settings to add to your auto-invest profile, Mintos already has 3 predefined setups to choose from:
- short-term strategy (from 7%)
- diversified strategy (from 8.5%)
- secured loan strategy (from 7%)
I wouldn’t touch these 3 investment strategies with a barge pole. The advertised return on investments is a lot lower then you could do with a minimal setup of your custom auto-invest strategy.
Even more, Mintos just added the “Invest & Access” option, which looks like a direct competitor of these 3 options.
For my auto-invest settings, I’ve used the following criteria:
- only invest in loan originators with A and B ratings
- loan originators should pay late fees when the loan is late with their payment (you can see these details on the loan originators page)
- the grace period should be less than a week (some loan originators use the grace period as a way to not pay any interest for 15 days)
- loan term higher than 2 months (I’m not too fond of payday loans)
- interest rates higher than 13%
- invest between 10 and 20 EUR in each loan
- every loan should have a buyback guarantee
Invest & Access
Invest & Access is the latest auto-invest profile Mintos added on their platform. You just set the desired portfolio size (starting from 500 EUR) and Mintos will automatically look for loans available on the primary market and invest in them for you.
If you want to cash out, you just hit the “Cash Out” button and you’ll be able to withdraw your funds. At least, that’s the theory. In practice, the loans are listed on the secondary market and other investors would need to be interested in buying them.
The more funds you add to it, the more diversified your portfolio gets and the potential returns are higher.
I’ve set the minimum limit of 500 EUR to the portfolio, so it shouldn’t do much damage to my returns.
The portfolio got filled up in less than a week, and currently, it has an average interest rate of 11.92%, a bit lower than my 13.51% average interest rate for my entire portfolio.
Only around 4% of my portfolio is invested in C-rated loan originators (that I would have never chosen) and the interest rates range from 6% to 16%.
It seems to me Invest & Access is just a way Mintos uses to fund all the available loans on the platform.
I kept it running for a few weeks, but due to its disappointing performance and poor loans and loan originators selection, I’ve closed my investments in it.
Advanced tips for Mintos investing
Whether you choose to invest manually or with an auto-invest profile, the same basic rules apply.
Don’t put all your eggs in the same basket
It should be obvious but don’t invest all your funds in a single loan or in loans from a single loan originator. Think about what’s the worst thing that can happen and have a contingency plan for it.
If the loan defaults, and it didn’t have a buyback guarantee, it will take a long time until you recover your funds if you recover them.
Even if the loan has a buyback guarantee, the loan originator might go bankrupt, and it will take a while until you recover your funds, if you ever recover them.
Invest small amounts in multiple loans, and diversify across multiple loan originators. Even if this means you’ll get slightly lower returns. There’s a fine limit between calculated risk and madness.
Use the buyback guarantee
Unless you know what you’re doing, don’t invest in unsecured consumer loans with no buyback guarantee.
(Unsecured consumer loans are usually high-interest loans rates that have no collateral like a mortgage, car, etc.)
If you know that under normal market conditions the expected default rate is around 10-20% and you’re prepared to take that hit, feel free to invest in unsecured loans. But keep in mind that normal market conditions may change rapidly during an economic downturn and the default rates will increase.
Invest in loans with buyback guarantee or at least in loans secured by a mortgage.
Filter out bad loan originators
Mintos rates its loan originators from A to D, based on their financial stability, track record, debt collection procedures, management and many other criteria.
If a loan originator offers 15% interest rates but its rating is C or D, think twice before investing in their loans. At the first economic hickup, they might have problems paying back the invested sums.
Take care of those late loans
It happens from time to time that borrowers are a few days late with their payments. That’s not an issue. If they’re late more than a few days (60), the buyback policy kicks in and the bad loan is purchased back by the loan originator.
Some of the loan originators don’t pay you interest on those delays. If you invest in 30 days loans and the borrower is late by another 30 days, your investment return will be a lot lower than expected (half).
Before investing in loans from a specific loan originator, check if they pay interest on late loans or not. You can find these details on the Mintos website.
While you’re there, you might also be interested in how long is the “grace period”. The “grace period” is the time period before a loan is considered late. It should cover payment delays caused by banks, national holidays and weekends, but some of the loan originators do abuse of the definition by setting it to 15 days.
Think twice before investing in non-EUR loans
The loans issued in EUR currency don’t have the highest interest rate on the platform. Loans issued in Kazakhstani tenge or Russian rubles or Georgian Lari (to name a few) have a higher interest rate.
And that is because these currencies are a lot more volatile than EUR. What today might sound like a good 18% return, when you account for an 8% inflation you won’t get what you expected.
If you’re familiar with that specific economy and you know the risks involved, you might be fine. Otherwise, do your research before investing in loans issued in other currencies.
Join a Mintos investor online community
If you use Facebook, you should definitely join the Mintos Fellows group. It has more than 2000 members from all over the world that post daily updates, concerns, ask and answer questions. Is a good group for learning more about Mintos and stay in touch with what’s new on the platform.
(Disclosure: it’s not my group, but I’m a member of it and I find it really useful).
While you’re on Facebook, you should also like/follow my page. I post there articles and bits and pieces related to p2p lending that I find interesting.
Conclusions on Mintos
Mintos is the largest peer to peer lending platform in Europe (except the UK). There are 60 lenders from 29 countries and currently there are more than 200.000 loans offered in the primary market.
The auto-invest tool is a great way to turn your investment into passive income. You set the parameters you’re interested in: loan type, country, loan originator (if you know something about them) and then let it run, collect payments and reinvest them.
Mintos has a buyback guarantee on some of the loans, which is all the loans I invest in. Unless Mintos or the loan originator goes bankrupt, you’ll always get your money back at the latest in 60 days.
The secondary market is a good option to have. In case you want to free up your funds fast, you can sell early your investments instead of waiting for the end of the loan terms.
The website offers a huge number of loan filters. For me, there are too many filters that I’m not going to use and make me spend more time on the platform than I would want to.
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