Recent Buy – Mintos P2P loans

On February 22nd I purchased P2P loans with 1 100 €. I did not pay commission this time, because investing through Mintos is free of charge.

P2P lending

Peer-to-peer (P2P) lending is way for people to borrow money for individuals or small businesses. The lending companies sell pieces of loans to investors in a peer-to-peer lending marketplace. Lending companies will usually have to keep a part of the stake to make sure that the interests are aligned with the investors.
I have been investing through Mintos, which is a Latvian peer-to-peer lending marketplace. It was founded in 2014 and have won a few awards since launching.

My experiences with P2P lending

I made my first investment in P2P loans in last July and I have been very pleased with the results so far. Here is an overview of my results for the past eight months:

mintos overview

Even though the results have been great, peer-to-peer lending is not risk free.
I have been purchasing loans with buyback guarantee. In short this means that if the loan is delayed over 60 days, the loan originator will repurchase the investment for nominal value and pay the accumulated interest income.
Buyback guarantee looks great on paper as you cannot make any losses, but it only works as long as the loan originator is making profit. In 2017 Eurocent run into financial problems and defaulted all buyback guarantees, which resulted to losses for investors. There are also some questions how peer-to-peer lending will perform in a recession.
I have been trying to minimize the risk by purchasing loans from a few different loan originators that have received above average ratings from Mintos and ExploreP2P. Also about half of the loans are car loans, which are using the vehicle as a collateral.

Mintos loans


Keeping the risks in mind, I think peer-to-peer loans can form a small part of a diversified portfolio. After the purchase, the weight of P2P loans is 7,0 % of my portfolio. With current interest rate this additional deposit increases my annual passive income by 116,5 €.

What do you think about this buy? Have you purchased any peer-to-peer loans? Please share your thoughts in the comment section below!
Thanks for reading.

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