Bondora - P2P Lending Investment Review
A wise investor is one that diversifies their investment portfolio. In the current economy, there are several sectors and business that you can invest in, and peer-to-peer lending is one of the profitable ones.
Peer-to-peer lending has been able to create a space where the bank is no longer the middleman between borrowers and lenders, and as a result, the P2P sector has proliferated. In Europe, Bondora is one of the leading peer-to-peer lending sites that you can invest in today.
What is Bondora?
Bondora is a P2P lending platform that allows its users to invest in different loans that are listed on its site. It is based in Estonia, Europe and ranks as one of the largest peer-to-peer lending sites. It has been in operation for 11 years now. According to the data on their website, Bondora has been able to process loans worth more than 314.2 million euros since they launched the business, which is quite impressive.
How does Bondora Operate?
Bondora’s primary objective is to give its users a good experience, offer fair rates and make all processes on the platform transparent with an open source API. Bondora also provides personalized offers for their users which ensures that users do not lack an investment option on the platform. Its primary focus is on middle-income earners that require mid-level loans which cannot be accessed from banks and other lenders. Its operations can be accessed to people in Estonia, Finland and Spain.
To improve its operations, Bondora has a product known as ‘Go and Grow’. This product allows users to lend their money to the Loans on Bondora’s portfolio but without having to choose what type of loans. Once you invest your money to Go & Grow, Bondora will automatically select the loans to invest in that will give you good returns. Currently, the annual return on the Go & Grow product is at 6.75% per annum.
Investing in Go & Grow is beneficial as you can access your money anytime, and there is a lower risk compared to other investments. The risk is reduced through the diversification of your investment to different loans and by the use of advanced technology in managing the finances. If you are a user on the Bondora platform using the other products, you can transfer your existing portfolio to the Go & Grow product.
It is important to note that Bondora mainly provides consumer loans. For every loan listed on the platform, all loan details are provided. You get to see the age of the borrower, where they are from, their employment status, and education background. Bondora also provides a summary of the payment plan and interest rates on each loan. The loan collection process is also indicated (for those loans that have one).
Features of the Bondora Lending Site
Just like other Peer-to-peer lending sites in Europe, such as Mintos, Bondora does not have any fees for investors that are in the primary market. The charges only come up if you decide to use the secondary market to sell your loan rights to another investor.
Loans on Bondora do not have a buyback guarantee, and this is the biggest drawback of the site. If loan borrowers default their payments, you suffer a direct loss. Due to the lack of the buyback guarantee, most users on the Bondora platform opt for the Go & Grow product, where there are no single loans as an investor’s investment, is diversified on multiple loans.
One major drawback with its customer support is that it lacks a chat tool and users are only able to reach the team via mail. Though the response is usually given, it is relatively slow, which can at times cause a breakdown in communication.
Loan duration and currency
Loans on the Bondora platform are between 3 and 60 months. The euro is the only currency accepted on Bondora, and you can begin your investment journey at Bondora with a minimum of 1 euro.
How to Invest in Bondora
Bondora allows for manual investing and Auto investing.
For those investors that wish to make their selection of loans and manage their investments, manual investing is the way to go. It is simple, clear to use, and one can easily filter the settings to suit their investment needs. You can filter the loans available with regards to the country of origin, the interest rate on loan, and ratings given to the loan originator based on previous loans repaid.
With manual investing, the amount of investment is not usually huge, but you can still diversify the small amount to different countries or loans.
Bondora’s portfolio pro manager product allows investors to have their investment done and managed automatically. However, you can still set your preferences to be followed, such as loan duration, investment per loan, country and rating. Once you do that setup, all the loans automatically invested in to will follow the criteria you select.
Pros & Cons Bondora
Bondora is a good peer-to-peer lending site that you can invest in as an investor. With the amazing products that they have to offer, you can rest assured of getting the best investments management and good returns.
However, it is essential to point out note that their good performance in the past does not guarantee a successful future. Make your investments wisely. It is always vital to invest what you can afford to survive without. Do not spend all your finances on this platform, especially on single loans, as the risk is high, and without a buyback guarantee, you may end up losing everything. Click on the button below and sign up on Bondora today!