Earlier this week I signed up with DoFinance which is the fifth P2P lending site I use – the others being Linked Finance, Mintos, Twino and VIAINVEST. I initiated a SEPA bank transfer from my N26 account and it cleared into my DoFinance account the next day. I only did a small transfer of €50 to test the platform.
I decided to use the Auto-Invest function as I do with all others (bar Linked Finance). There are three options to chose from – 1 month loans returning 6%, 2 months returning 8% and 6 months returning 12%. The longer the funds are locked into the loan for the higher the return. Once you select the ‘Plan’ you then select the amount and how long to run the auto-invest for. You can select an auto invest period longer than the length of the loans, for example selecting to auto-invest for 6 months with 1 month loans. This means once the first one month loan is repaid, it will be reinvested again for another month. The benefit to this is you can then cancel the auto-invest after the first loan has repaid and withdraw without loosing the earned interest. The downside to this is the interest rate is lower. The calculator will show you the Expected Investment Value at the end of the auto-invest term.
I selected to invest in six month loans, lending my entire €50 for a period of 6 months. At the end of the 6 months my account balance should be €53.01. If I left €50 in my Rabo Direct savings account for the 6 months it would have earned a massive 10c interest. This shows you how competitive the returns of P2P lending are, but of course with the higher returns come more risks.
A few minutes after setting up the auto-invest the plan appeared under my portfolio.
Clicking into the auto invest portfolio shows you the individual loans that make up the portfolio. As you can see, they split my €50 investment into 5 €10 investments all in Polish loans. You can then view or download the contracts should you wish to.
My account overview shows the current balance of my investments, available funds and the interest you could earn based on the available funds in your account.
I am very impressed with DoFinance’s interface and the ease of lending. I haven’t had a chance to look into the history or financials of the firm but will try and do so in the coming days. I can see myself adding more funds to DoFinance shortly – I’m a big fan of diversifying to reduce risk when it comes to P2P lending.