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Mintos has allowed me to offer all my readers a 1% bonus on all investments made in the first 90 days if you sign up using this link. For the record, I started investing with Mintos long before deciding to become an affiliate.
Mintos is hands down one of the best P2P lending platforms in Europe at the moment. Not only is it the largest, but it also has the most advanced functionality combined with great returns.
I made my first P2P lending investment in Mintos back in 2016 when it was a brand new platform. Since then many things have changed. Mostly for the good, but a few things have also become worse. In this Mintos review, I’ll show you both the good and bad things.
Today, Mintos is by far the biggest European P2P lending platform with more than 1.5 billion EUR in funded loans, which is three times more than the closest competitor.
I am actively investing in six different P2P lending platforms (Mintos, Grupeer, Fast Envestio, Fast Invest, Lenndy, and PeerBerry), and I can honestly say that Mintos is the best option at the moment.
If you want to invest in P2P lending as a European, there’s simply no way around Mintos. If you have an American bank account, you have other good options such as LendingClub.
Mintos has the most advanced platform with most functionalities, although recently, my returns have slowly started to decline.
I have previously reviewed Mintos, but so many things have changed, which is why I felt the need to write an updated version.
Introduction to Mintos
Before we get going, let’s get the facts on the table.
Mintos is a P2P lending platform from Latvia founded in 2015. The platform accepts investors from more than 70 countries and offers a range of loans; agriculture, business, car, invoice financing, mortgage, pawnbroking, personal and short-term loans. Mintos has funded more than 3.4 billion EUR in loans and keeps on growing fast:
At the time of writing, Mintos has more than 300,000 available loans on the primary market and 200,000 on the secondary market from 65 loan originators in 30 countries and 12 different currencies.
If you are not familiar with the size of these platforms, I have not seen any competing platforms get even close. Most competing platforms only offer less than 10 loan originators and countries – and some struggle with having enough available loans for investors.
Mintos has grown from having a few thousand investors in 2015 to more than 190,000 in 2019. They have grown total cumulative investments from 10 mEUR in 2015 to more than 3,400 mEUR in 2019. They are now more than 60 employees and have been a profitable company in the past two years, which I guess is a good sign for a growth company.
Lately, I have experienced a slight decrease in my annual returns with Mintos, so that is one of the things I am tracking closely going forward. However, Mintos has reported that average interest rates on the primary marketplace increased from ~11% to ~13% from March to May 2019, which could show that they are working on maintaining the high interest rates.
Today, it is possible to invest in 8 different loan types (business, personal, mortgage, agricultural, short-term, pawnbroking, car and invoice financing), in 27 countries (Albania, Armenia, Botswana, Bulgaria, Colombia, Czech Republic, Denmark, Estonia, FYR of Macedonia, Finland, Georgia, Kazakhstan, Kenya, Kosovo, Latvia, Lithuania, Moldova, Philippines, Poland, Romania, Russia, South Africa, Spain, Sweden, Ukraine, United Kingdom and Zambia) and in 12 currencies (CZK, DKK, EUR, GBP, GEL, KZT, MXN, PLN, RON, RUB, SEK and USD) with the far majority of loans in EUR.
My investments on the Mintos primary marketplace
My investments in Mintos follow a simple recipe. I let my autoinvest strategies invest all of my money automatically and then I waited patiently.
I have 541 current loan investments and have 1,734 finished investments that have yielded a net annual return of 11.86% before tax:
If you compare this number to six months ago, you will see my net annual return has decreased with 0.1% from 11.96% to 11.86%. I expect this trend to continue as has been the case for most of the big American platforms.
Over two years, a net annual return of 11.86% has given a total of 23.7% in return before tax, which I am really satisfied with. When I compare it to my stock investments, P2P lending is a clear winner, although it, of course, comes with certain risks.
I have to pay tax on the net annual return from Mintos, which is now about ~30% for me since I have negative capital income due to our real estate loan. This means I have a net annual return after tax of 8.3%. I still consider that quite good!
My loans are pretty well-diversified across different loan originators, loan terms and interest rates, so I’m not too afraid about putting all of my eggs in one loan originator basket:
My current loans have an average weighted interest rate of 11.28%. The decline in interest rate over time is even more visible here. The average remaining term is 17 months because I always invest with a long time horizon and don’t mind some of my money being unavailable for some time.
What are my autoinvest settings?
I’m not a fan of spending a lot of time on my investments. I prefer to just set and forget my investments.
This is why I only invest in platforms with autoinvest functionality (or autoinvest functionality coming soon). Autoinvest enables me to invest in loans according to specific criteria automatically.
The autoinvest function on Mintos gives you the option to rank different autoinvest strategies. This means that the system will execute as many orders as possible on your highest prioritized autoinvest strategy before moving on. I use this prioritization to invest in high interest loans first before moving on to lower interest loans.
My autoinvest strategies for the primary marketplace are set up the following way:
As you can see, the only differences are that the highest priority categories focus on loans with higher interest rates and I allow a larger investment in a single loan for those.
My settings include all loan originators above B- in risk rating, all loan types, all countries and only loans with buyback guarantee:
There are a few other settings that are relevant to set and I have used the following settings on all my strategies:
- Interest rate: Intervals starting from 14% up to 20.5% and decreasing with 1% for each investment strategy (my next strategy has an interval of 13% up to 20.5% and so on)
- Remaining loan term: 3 months to 36 months, since I don’t like the very short-term loans as they have to be reinvested all the time, and I have an investment horizon of more than 3 years
- Reinvesting: “Yes”, I reinvest all returns
- Include loans already invested in: “No”, I like the diversification
- Diversify across loan originators: “Yes”, I like the diversification
- Portfolio size: Large enough to make sure the investments don’t stop unexpectedly
- Investment in one loan: 10-20 EUR in high interest rate loans, and 10 in lower interest rate loans
Once you have activated your autoinvest strategy it quickly fulfills the orders, so make sure to initially put a cap on the portfolio size of your strategies to check whether you have set them up correctly. Once an order is locked, there are no cancellations (except if you sell the loan on the secondary marketplace).
The only negative side of Mintos’ autoinvest feature is that you cannot automatically include new loan originators or countries as they are added to the platform. I log on the platform once a month and tick off the new loan originators in my different autoinvest strategies to include as many as possible.
How I also invest in the secondary marketplace
I have previously manually invested some money in loans on the secondary marketplace and have found it quite attractive.
The secondary marketplace has a lot of loans available and most often some quite lucrative ones. Many people try to sell their loans at a premium in the marketplace, so make sure you catch the good deals.
Recently, Mintos launched autoinvest on the secondary marketplace. I have recently started experimenting with autoinvesting in loans with a yield to maturity (YTM) above 15% on the secondary marketplace.
I invest in the secondary marketplace because the interest rates on the primary marketplace have decreased slightly over time. I hope to sustain higher interest rates doing this.
To begin with, I have capped the maximum investment amount through the autoinvesting strategy on the secondary market to keep a close eye on the type of investments it makes:
I use nearly the same autoinvest settings as on the primary marketplace, but I choose a YTM of +15% for now because there are enough loans available in that range. I have also chosen a high YTM because the quoted YTM is based on a few assumptions described by Mintos:
“YTM (yield-to-maturity) is the expected rate of return of an investment, expressed as an annual rate, assuming that an investment in the loan is held till maturity. YTM calculations include the following assumptions: 1) investment in the loan is made at the quoted price, i.e. including a possible premium or discount; 2) all future payments will be done according to the schedule, i.e. the calculations do not include any default expectations; 3) no service fee is included, i.e. YTM is comparable to the nominal interest rate of loan; 4) late loan payments are expected to be received the next day.”
I’m not entirely sure how these assumptions will impact my actual net annual return from the secondary marketplace. I will pay close attention to this as my first investments close and report back here in this post.
Finally, you should be aware of the fact that you pay secondary market transaction costs straight away (e.g. premiums on loans) and then take over the loan to get the interest and principal payments over time.
My experience withdrawing money from Mintos
I didn’t want to write this updated review before I had tried withdrawing money from Mintos.
If you can’t get your money out of the platform, it is not worth anything.
Therefore, I decided to make a little test and made a withdrawal.
It was surprisingly simple and only required two clicks.
First, you navigate to the “Withdraw” page and enter the following form:
When you click the “Withdraw” button, you immediately get a confirmation:
Two working days later I had the money on my bank account.
How does the buyback guarantee work on Mintos?
Borrower default is one of the risks associated with investing in P2P lending. How does the buyback guarantee protect you from this?
Consider the following example:
You decide to invest 10 EUR in a loan on Mintos. The borrower cannot repay the 10 EUR. If you do not have buyback guarantee you would have lost the investment plain and simple – just like borrowing a friend money who doesn’t repay.
However, with a buyback guarantee, the loan originator issues a guarantee to repurchase the loan from the investor once it is delayed by more than 60 days. The loan is bought back from the investor with the value of the outstanding principal including accrued interest income, which means you still get the expected return up until that date and can re-invest the money into a new loan.
I like this concept as it shifts risk from you to the loan originator. However, it doesn’t protect you against the other risks associated with investing in crowdlending.
Risks to be aware of when investing in Mintos
Investing in financial assets always comes at a risk. I consider P2P lending a high-risk investment, and I only have 5-10% of my net worth across different platforms.
There are in general six risks when you should aware of when investing in Mintos:
- Money drag means that your money is not fully invested. I don’t expect this to be a problem on Mintos as the loan availability, in general, is quite high (unless you have very aggressive strategies).
- Borrower default is when a borrower cannot repay his/her loans. This is covered on most loans on Mintos with the buyback guarantee. I only invest in loans with a buyback guarantee, so I am not directly exposed to this risk on Mintos.
- Loan originator bankruptcy is if the loan originator behind the loans goes bankrupt. In that case, you risk losing the investment made in loans from that loan originator. I have experienced this once on Mintos when Eurocent went bankrupt. If this happens, normal bankruptcy procedures are started and Mintos tries to get as much of your investment back as possible.
- Platform bankruptcy is if Mintos goes bankrupt. In that case, you risk losing all the money you have invested. Right now, Mintos looks financially sound, so I’m not worried, but I recommend you to watch this closely if you decide to invest in Mintos.
- Financial crises are also a real risk. We haven’t seen what happens with P2P lending platforms in times of crisis.
Finally, there’s an ethical aspect to be aware of since you never really know what your money is funding through the loans (e.g. ultra-high interest loans to weak borrowers or unethical businesses). I have chosen to put my faith in the EU authorities and regulation in this regard for now, but I hope there’ll be more transparency on this in the future.
I’m not trying to scare you. I would never put my money in P2P lending if I didn’t believe the rewards outweighed the risks, but I believe it is important you are aware of the potential risks if you decide to invest. However, these are risks for all financial assets, and if you cannot afford to lose investments, then you should consider whether you should invest at all.
On Mintos, I would always recommend diversifying your investments across many loan originators and actively using the Mintos Ratings that gives a credit rating to each loan originator to lower your risk.
Mintos risk ratings
So, now that you know there are risks associated with investing in Mintos, you should know about Mintos’ risk ratings. I believe this is a great tool to get some transparency on the risks you are facing investing in different loan originators.
Mintos is the only P2P lending platform in Europe to introduce loan originator credit ratings. I love this feature because it gives me much more transparency of my investments and allows me to deselect certain loan originators that carry too much risk.
Other platforms offer investments in several loan originators, but it is really hard to tell them apart and there’s no quick way to get an overview other than doing all the research yourself.
The Mintos risk ratings measure the risk of the loan originator from low risk (A+ to A-), moderate risk (B+ to B-), elevated risk (C+ to C-) and default (D).
I use the Mintos risk ratings to filter out the loan originators carrying the highest risk. I only invest in loan originators with a rating between A+ to B- (low to moderate risk rating).
The advantages and disadvantages of investing with Mintos
Enough with all the details. Let’s zoom out and have a look at the pros and cons of Mintos.
Investing with Mintos has a few advantages, but there are also some negative aspects compared to other platforms. I feel both are important to mention in this review.
The advantages of investing with Mintos are:
- Super platform with the market’s most advanced functionality such as prioritized autoinvesting, secondary market, site-wide filtering, and currency exchange
- Buyback guarantee on most loans protecting the investor from borrower bankruptcy
- Great average annual returns of 11.59% compared to e.g. stock market returns
- Wide variety of available loans in different countries, currencies and from different loan originators
- Credit ratings of all loan originators with detailed information on the company and its consolidated financials
- Constantly growing with new functionality and more loan originators
- Fast and accurate customer service, deposit and withdrawal (I have tested all three)
The main disadvantages of investing with Mintos are:
- Lower returns than newer competitors in Europe and slowly declining returns overall
- Not all loan originators seem financially sound and one loan originator has gone bankrupt in the past
- No way to automatically include new loan originators, countries or loan types in autoinvest strategies
- It can be hard to get rid of lower interest loans at decent terms on the secondary marketplace due to the big supply of attractive primary market and secondary market loans
All in all, I believe the advantages outweigh the disadvantages, but you should, of course, do your research to make sure Mintos is a good option for you.
Mintos review conclusion
As you might have sensed in this review, I have been very happy with my investments in Mintos so far. I believe the platform is sound, returns have been great and I feel my investment is safe with multiple diversification opportunities.
Mintos is now my top choice for new and experience P2P investors alike. New investors will easily be able to get up and running while experienced investors will have the most advanced platform available.
The only concern I have is whether they can keep up the returns in the long term, but it is not keeping me from still continuously investing in Mintos. This being said, I am testing out other platforms at the moment to see how much returns will differ in the months and years to come.
MoneyMow bonus: Get a 1% bonus on your first investments
If Mintos sounds like something for you, I have made a deal with them which gives you a 1% bonus on the investments you make in the first 90 days if you sign up using this link. If you sign up directly on Mintos.com, you will not get this bonus.
Mintos alternatives: Other P2P lending platforms
If you don’t want to invest in Mintos for some reason, I would recommend you to check out my comparison of the P2P lending platforms in Europe. You can also check out my detailed review of Grupeer, Envestio and Fast Invest.
There’s plenty of good platforms out there, and most of them also offer higher returns than Mintos.
Before investing with Mintos, I urge you to do a bit of research on the other platforms to find out whether they suit you better. You could also consider real estate crowdfunding as an alternative.
If P2P lending is new to you, feel free to send me any questions you might have, and I’ll do my best to help you 🙂
I have tried creating a video review below (not me speaking though) to help people who would rather watch a video than read a long post. Hope you like it!