Mintos Marketplace is a peer to peer lending marketplace, where many loan originators come together and offer their loans to a large amount of investors. Investing in peer to peer lending allows a steady growth of your net worth, assuming everything goes right. Mintos Marketplace is currently the leading peer to peer lending company in Europe.
The goal of this article is to help newcomers or people that don’t have a lot of time to spend on research. Fabulous Life Adventures will help you maximize returns or help you find safer investments.
|3 months||6 months||12 months|
|13.72% (EUR) / 38.84% (GEL)||14.83% (EUR) / 26.92% (GEL)||23.32% (EUR) / 21.29% (GEL)|
- Presence of employees in peer to peer lending communities. Even not hiding their identities on Facebook.
- Actively introducing new features based on community feedback.
- No signs of cash drag, but has been growing instead.
- Ability to diversify in multiple loan originators to prevent capital loss.
- Ability to invest in multiple currencies.
- Possibility to generate high turn-over when enough time is dedicated to manual investing.
- Interest rates have significantly lowered lately.
In August 2018, Mintos Marketplace has introduced a new feature where they rate loan originators on the platform. This allows you to quickly identify the risk when investing your capital. At Fabulous Life Adventures, we recommend using a weighted diversified portfolio based on these ratings.
This feature was introduced because many of us investors complained about the lack of financial statements being updated on the Mintos Marketplace website. And obviously, this is a big deal to us investors that want to assess the risk.
On the Loan Originators page, you can see all the loan originators on the Mintos Marketplace platform, with their corresponding rating. Some loan originators consist of multiple entities, and each entity may have a separate rating, to see these ratings, navigate to the Detailed tab on the Loan Originators page.
Read more about Mintos Ratings here.
There are 4 major ratings:
|A||Strong||Stable & established||Good|
|B||Weaker but stable||Partially||Shorter asset quality|
|C||Considerable weakness||Substantial risk||Limited / Below average|
If you plan on investing manually, then car loans is most likely the best way to go. You know the age and gender of the borrower as well as the type of car they are buying. You may for example want to avoid investing in a 20-35 year old buying a BMW 7-series, these borrowers will end up most likely with expensive repairs sooner or later. Look up the MSRP of the car they are buying, the new value of car will most likely represent the repair costs more accurately.
Also don’t forget to look at the fuel type and capacity of the engine. Anything above a 2.0L engine is going to be consuming a lot of gas. Mogo is very transparent about these details.
If possible, try to invest in car loans that have been issued at least 1 or 2 months ago and have had 1 or more successful payments. Most of the time used cars have some problems that need to be fixed after purchasing, which can lead to unexpected costs.
- Which car brands depreciate the least? Dacia, Toyota, Mazda and Nissan.
- Which car brands depreciate the most? Cadillac, BMW, Audi, Lexus, Infinity, Mercedes, Opel, Ford, …
- Which car models depreciate the least? SUVs, cross overs, pick-up trucks, sports cars
- Which car models depreciate the most? Hatchbacks, luxury vehicles
Generally I would avoid this type of loan altogether. When you look at the bare statistics at Mintos, you can see these type of loans have a lot more late running loans. The reason behind it is most likely that people are more desperate to get a loan, so they are starting to put valuable personal items as collateral.
If you want to have your money available within a 3 month time frame assuming they may run late and are bought back within 60 days, then this loan type is for you. However, there are a lot of late loans here, so if you invest you can check if late fees are being paid by the loan originator when it’s bought back. But I find this counter productive, and only increases the chance of the loan originator defaulting.
Generally you can expect much lower returns. Because of this, I would recommend investing in long-term loans and just selling them if you need the money again. As I mentioned earlier in the article, buying new loans very frequently results in more late loans in your portfolio which could result into higher risk if the loan originator defaults.
Agricultural loans are fairly risky when we start looking at the climate. Make sure to look up the climate of the region and the possible impact of the weather on the agriculture industry in that region.
Having a mortgage loan with an interest rate of 8% or higher is risky. Be sure to invest in mortgages with a lower borrowed amount. However, a default rate of 2-3% isn’t all bad for mortgage loans without a buyback guarantee. And they are secured by collateral after all.
Business Loans & Invoice Financing
I’d recommend taking a look at the finances of the business you are investing in, if available. Sometimes these are backed by collateral.
- Interest Rates: 30% (Tax Code 1160-04)
- Capital Gain: 0%
Belgium only has capital gain tax on buying and selling real estate with profit, and pattern day trading.
- Campaign Rewards (Cashback): 0%
The ‘Overview’ screen of Mintos is really neat. You can see the summary for each currency in your portfolio.
The ‘Primary Market’ is generally very saturated with a lot of loans as there is a lot of activity on the secondary market on Mintos Marketplace. At the same time, Mintos Marketplace keeps introducing new loan originators regulary, and the availability of loans keeps growing in the process. On the left hand side, you can find all the neat filters you can think of.
As for the ‘Secondary Market’ screen, which is basically the same as the ‘Primary Market’ screen but then with the addition of a discount/premium indicator field. This field will tell you whether you are paying a premium for a loan or receiving a discount.
Every peer to peer lending platform should have auto investment options available. Otherwise it can get time consuming to pick the right loans, and then you can just as well jump into the stock market. Luckily Mintos Marketplace allows very fine control over auto investment presets. You can basically use most of the filters found on the ‘Primary Market’ screen. You can sort your own profiles according to importance.
Once all the filters are set, you can use the sliders to control the minimum and maximum interest rate as well as limit the term. The finer settings are controlled per loan originator, but beware, there are so many options out there, you may simply exhaust yourself changing the filters frequently.
You can choose to reinvest your money at Mintos automatically, this puts your money to work continuously. We get into the diversification settings below.
Below I have configured an auto investment profile on Mintos Marketplace to equally distribute investments. You can fine tune the percentages yourself and come up with a formula or preference that works for you.
The ‘Account Statement’ page at Mintos Marketplace is one of my favorites. It’s so incredibly detailed that will make filing taxes fun, when it’s not. You can use the data to create your own reporting.
The ‘My Investments’ page has the same filters you find on the ‘Primary Market’. This is typically the screen you will use to quickly filter and sell loans on the secondary market. You could also use the screen to identify why certain loans are running late and try to find a pattern to change your investment strategy.
The ‘Loan Originators Overview’ page lists all loan originators, excluding their subsidiaries of course. You will most importantly find the rating of the loan originator on this screen as well as the amount of outstanding loans, if you don’t want exposure to smaller and newer loan originators.
If you want to become an expert at investing on Mintos Marketplace. This is the screen where you want to be. In the ‘Details’ tab, you will find all the necessary information what will happen when a loan will run late or when a loan will be purchased back. Some loan originators don’t pay interests on loans that run late before they are bought back, others do.
When the loan originator goes in financial distress you will find that the group guarantee and investment structure will be of importance to you. The group guarantee will determine if a parent company will help in case of a default. The investment structure determines whether you need to make a claim against the loan originator or borrower to get your money back.
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