Mintos is one of Europe’s largest peer to peer lending platforms. As you all know by now, I’ve been reluctant to invest too much into this type of asset in the past. Until now. Since a few months I’m investing through Mintos and Grupeer and I’m quite happy so far! Today you can read all about my personal Mintos review!
Who is Mintos?
Mintos is a peer to peer landing company based in Latvia. They’re offering a platform to bring together loan originators (those who have loaned money) and investors like you and me (who want to buy these loans).
They call themselves the biggest crowd lending platform in Europe, with around 160,000 investors and 1.8 billion euros worth of loans in the past 12 months.
A Quick Intro to Peer To Peer Lending
Peer to peer lending is the act of individual investors lending money to others (instead of a bank lending money). Mintos is bringing together loan originators (not the ultimate borrower) and the investor.
This means you’re not giving loans to people and businesses directly. With some crowd lending platforms that is the case, but with Mintos you’re investing in loans that are already in place.
Let’s say someone wanted to borrow money for a car. The lender, could be a bank, wants to move these loans off balance sheet by selling off the loan to investors. Sometimes banks do this to be compliant with regulations.
By offering their loans on a platform like Mintos, or Grupeer, they can divest out of the loan while offering the investor some pretty nice returns!
Types of Loans Mintos Offers
The many loan originators active on Mintos offer a lot of different loan types. Currently, I’m invested in mortgage loans, car loans, consumer loans, agricultural loans, and short-term loans.
When you create your auto-invest strategy you can pick the types of loans you want to invest in. I didn’t specify, because I’m happy with the diversification by investing in all kinds of different loan types.
Luckily Mintos offers an auto-invest option, because I don’t like to be logging in and buying loans all day. Since I want maximum diversification I want to invest only 10 euros per project and it’s not feasible to do this manually (hundreds of loans).
The Mintos auto-invest functionality enables me to invest hands-off. I’ve set it to buy all loans that are over 10% interest rate, shorter than 6 months in duration, and offer buyback guarantee.
Every day, this auto-invest is buying loans with the available balance I have and the nice thing is you get an email every day with a summary of what happened.
Invest & Access
Mintos Invest & Access is meant to be the next level of automatic crowd lending. You simply tell the system to invest a maximum of X euros and it does this completely automatically.
It almost feels like investing in an index funds of peer to peer loans. You simply add money to your Mintos account, and they’ll invest it for you. An added benefit is that you can sell out of your investments pretty easily.
This is great, because it makes your investments much more liquid.
Mintos Buyback Guarantee
Just like Grupeer, on most loans, Mintos offers a buyback guarantee. This means that the loan originator will buy back non-performing loans.
Non-performing loans on Mintos are defined as loans that are 60 days behind schedule. Of course, it’s a risk to you, but this risk is mitigated quite well.
If a loan originator can’t pay, then your investments will see a loss. Another risk is the cash drag you might have on your non-performing part of your portfolio. These loans are not paying out any interest or principal, so this money isn’t working for you.
I see that quite some loans on Mintos are behind schedule, more than 10% is >16 days late. Honestly, I don’t like that. Even with the buyback guarantee (I know it’s unlikely I will lose principal) I simply don’t want non-performing loans.
I’m moving all investments from my regular auto-invest strategy to Mintos Invest & Access. Hopefully that will perform better. In the meantime, I’m keeping a close watch on these loans.
Interest Rates on Mintos
The interest rates on Mintos are really good, and comparable to Grupeer. On my regular auto-invest
With the new Invest & Access scheme, Mintos is offering a headline interest rate of 11.2% which I’m fine with, if these loans are performing and my portfolio is as liquid as they promise.
My Investment Strategy
My current Mintos investment strategy consists of a single auto-invest rule. The filters are simple. I want loans that have durations shorter than six months, because I want to have a liquid portfolio. I want them to yield at least 10%, because I want to be paid for the risk I take, and I want them to have a buyback guarantee.
With that strategy, I am diversified across many different loans. However, it feels like lately a lot of these loans are being paid late. That means that I have to change something. Maybe I’m too aggressive, who knows.
In the near future I will be switching over to Mintos Invest & Access completely to be 100% hands-off and have full liquidity.
Mintos Review Conclusion
I definitely like Mintos. They’re the number one peer to peer lending platform in Europe. Although Grupeer is one of my favorites as well, Mintos makes things very easy for me and I like easy investments.
If you’d ask me, I’d definitely recommend signing up to their platform if you want to start investing in crowd lending. Please make sure to use my link to sign up, so that I might receive a small compensation. That’s a win-win, if you liked my article ;-).