My p2p lending platforms adventure started with Mintos, 6 months ago. I was looking for a better place to put my savings into, and peer to peer lending sounded like a good idea.
After many weeks of internet research, I found the perfect platform. Everybody was praising it, was explaining how good it is, and how safe it is, and how I should join Mintos as well. In part, it was because Mintos has a referral programme, so if you refer somebody on the platform, you’ll receive a bonus. But for the most parts, they were right. Mintos is a great platform to use and the returns are more than good.
If you want to read more about the features Mintos has and how it works, you can check out my other article where I talk in more details about it.
Why I chose Mintos
There were many things I liked about Mintos in the beginning, and some more after I started to learn a bit more about the platform.
That’s the first thing I was looking for. What happens if the loan defaults? If the borrower doesn’t pay? It happens every day, but it usually happens to banks, and I’m not a bank.
Mintos has this buyback policy that says it will buy back any loan from you that is more than 60 days late. It’s not fantastic, but I could live with that. I’ll have my money locked into some bad loans for 60 days at most, but at least I’ll get it back.
I found out later there are other platforms that offer better deals than this, like Grupeer, Twino, PeerBerry, Fast Invest. All of them have a buyback guarantee and they also pay you the interest owned for those 30, or 60, or even 3 days on Fast Invest.
Good interest rates
At the time, my funds were split into stocks, bonds and bank deposits. None of them was doing too well. Bank deposits were slowly losing value due to inflation, US bonds were just above the floating-point, and stocks were going through the second market correction of this year and I took a few hits.
I was looking for something to diversify my portfolio, and 12% interest payments that would constantly land in my account sounded great. The rates are a bit lower now, around 10%, for the loans with a buyback guarantee, which is all I’m still looking for on the platform. Good rates still, even with the drop. (On second thought, there are lots of loans this month on Mintos with 14% interest rates, so the age of good rates has returned).
Auto Invest tool
The second thing I learned about p2p lending platforms, after always check what happens when a loan defaults, was that I needed to diversify my portfolio. At the very least, this means that if I have 1000 EUR in my account, I shouldn’t invest it all in one single loan. Don’t put all your eggs in the same basket is valid here as well. I should invest in as many loans as possible, and only small amounts. If some of the loans default, I would still receive payments from the many others that didn’t.
If I split every 1000 EUR into small 20 EUR loans or even 10 EUR loans, it will take a while to invest my money. And Mintos is not entertaining enough to make me enjoy clicking hundreds of times on the website every day investing in loans.
Fortunately, I didn’t have to do this. Mintos has this awesome auto-invest tool where I could set everything I could think of: loan types, loan terms, interest rates, countries, minimum and maximum to invest in a single loan, loan originators, and so many others. The only thing you can’t set as a filter is the shoe size of the borrower.
One awesome feature the auto-invest setup tool has is that it shows you if there are any loans for your selected criteria. This is something Fast Invest could use on their auto-invest tool.
The number of loans and investors
It’s big. There are more than 200.000 loans available on the primary market and another 180.000 loans on the secondary market. More than 1.4 billion EUR have been invested on Mintos since 2015. There are almost 100.000 investors registered on the platform from all over the world.
To date, this is the biggest platform I’m registered on.
These 4 reasons were enough to convince me to add funds to my account and give it a go. After 6 months, I’m happy with my choice.
How are my investments doing so far
I’ve deposited around 3500 EUR in my account in the first 2 months. So far, I got a 125 EUR profit, which amounts to a 10.68% net annual return, according to Mintos.
The average interest rate of my loans is 11.01%, with an 8 months average remaining term. I’ve been mostly investing in personal loans, apparently.
Most of the loans I’ve invested in are from Georgia (39%), Moldova (23%), Finland (4.9%) and Latvia (4.6%). The top 3 loan originators from my portfolio are Lendo (38%), Sebo (18.6%) and IuteCredit (9%). All the loans I’ve invested in have a buyback guarantee.
I’m not too familiar with the loan originators and how each of them performs, and that is a thing I’ll need to change. I believe my portfolio will do better once I fine tune my auto-invest settings and remove some of the loan originators that constantly have loans with late payments.
Of the 156 loans I’m currently invested in, only 80% of them are not late with their payments. The others are either in the grace period or are just late with their payments.
This is definitely taking a toll on my profits, so I’ll need to invest some time into learning how I can minimize the amount I invest in loans that tend to be late with their payments.
What I should improve
The return rate is lower than I expected
Currently, Mintos has loans with interest rates ranging from 5% to 18.5%. This includes the loans in all 12 currencies available on the platform and also the ones without a buyback guarantee.
I’m only investing in loans in EUR and with a buyback guarantee, and for those, the interest rates range from 5% to 14%. Yet, the average interest rate in my portfolio is 11%. It’s true that for the last months Mintos didn’t have any loans with interest rates more than 10.5%, so this might also be the cause of my lower than expected yield.
The rate of late loans is too big
20% of the loans I’m invested in are late with their payments from 1 to 60 days. According to Mintos statistics, that’s the average across platform (78% of their loans are current with their payments). But average also means that some loans perform better than others, so I’m sure if I put a bit of effort in I could do better than average.
The 20% rate of late loans has a bigger effect on my profits because I’m only investing in loans with less than 1-year term. I want to be able to get out relatively quickly from the platform when I need to, so no long-term commitment from me, Mintos. But if I only invest in 1-month loans, and they’re all 1 month late, my return of investment is halved. (The average term of my loans is around 8 months, but the 1-month loan is a better example).
Take a deep dive into the secondary market
There’s profit to be made from the secondary market. The number of loans available there is the same as the one on the primary market. Also, it might provide good insight on what loan types and from what loan originators are typically late and maybe this would help me avoid them in the future.
Learn about the loan originators on the platform
I didn’t invest so far any time into learning who the loan originators on Mintos are. And I should be aware of stuff like what are those companies like, who they lend money to, how much they charge their borrowers, are they trustworthy.
Set a better auto-invest profile
The problem with so many options on the auto-invest tool is that you need a diploma or a degree in order to set up your auto-invest profile. I won’t be surprised if I’ll find in the near future service offers on Fiverr saying “I will set up your auto-invest profile for you on Mintos” or jobs like Mintos asset optimizer or something like that,
Jokes aside, I need to put a bit more effort in setting my profile with more settings than EUR, 10.5+ interest rate, buyback guarantee, loan term 3 to 10 months, minimum 10 EUR, max 30 EUR. Those are all my settings right now, and they are not taking advantage of everything Mintos offers.
The thing I hate the most on Mintos
There is one thing that frustrates me a lot when I’m using Mintos. From time to time, I do some manual investments as well. Just to see what the market looks like, what loans are there, and compare them with the ones I currently have in my portfolio. And every time, I run into the same problem.
Let’s say I’m on the Loan Listings page, I apply some filters, select a few loans, and then hit the Review and Approve button.
On the Confirm Investments page, because of course, that’s a separate page, why not, I run into the same problem almost every time.
One of the loans I selected is not available anymore, so I need to remove it from my list and search for a new one.
And, of course, when I go back to Loan Listings page, I need to apply again all the filters I had before because Mintos forgot to store them. And of course, the same thing can happen the second time. I’ll pick a loan, go to confirm, and it won’t be available anymore.
Why doesn’t Mintos store my settings? Why is the confirm investments screen on a different page? Why don’t they change it with a more user-friendly solution? I don’t know. Until that’s fixed, I learned to always open a second window and use that to visit Confirm Investments page. If some loans are not available, I’m still on the listings page with all my filters and I can choose another one.
My feeling so far on Mintos
What I like
- Good interest rates – 10% to 14% is the range of the loans I’m interested in
- Buyback guarantee – it’s only after 60 days, but it’s better than losing your money
- Auto-invest tool with infinite levels of customization
- Hundreds of thousands of available loans – around the same time I’ve opened an account on Mintos I’ve also created another one on Twino, so I could appreciate more what Mintos had
What I don’t like
- Too many loans are late with their payments – around 20% of my loans are late, and I don’t really know if there’s something I can do about it or not
- The interest rates offered are seasonal, I started with rates around 12-13%, then they dropped to 10%, now they’re up to 13-14%
If you plan to invest in Mintos, you might use a referral link like mine. Mintos will pay both of us 1% a reward of the amount invested in the first 3 months.
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