Mintos was founded in January 2015 in Latvia and has grown rapidly since with nearly 90 million funded to date. Mintos is sometimes known as P2P lending 2.0. With LinkedFinance and many other P2P lending sites, applicants request the funds on the platform. If the funds are not raised, the loan is not completed. Mintos is different, it partners with non-bank loan originators who sell existing loans, or parts of existing loans to investors.
There are six types of loans traded on Mintos:
- Car Loan
- Invoice Financing
Signing up is simple. Just complete the registration form.
Deposits must be made by SEPA bank transfer and takes 1-2 days to be credited to your Mintos account. It is a Latvian account and you must put investor number as the payment reference. This number is shown on the deposit page on your Mintos Account.
Lending money on Mintos is quite simple, but there are a lot more options than Linked Finance. Firstly, there are two markets – Primary Market and Secondary Market. We’ll look at the primary market first.
As I write this, there are over 38,000 loans on the primary market. It’s not possible to look through each loan individually without doing some filtering.
Loan Type: Choose specific types of loans e.g. Car Loan, Mortgage
Country: What country the loan is from
Issue Date: The date the loan was issued
Interest Rate: What interest rate the loan is paying. This will be the interest rate you earn.
Loan Originator: Which Loan Originator offers the loan (see below)
Listing Date: The date the loan was listed on Mintos.com
Term: How long until the loan is due to be fully repaid
Amortisation Method: How the loan is paid back
– Full -> interest + principal paid back together
– Partial -> interest + smaller principal paid back together with remainder of principal paid back at the end.
– Interest-Only -> interest only paid back during the loan with principal paid back at the end of loan
– Bullet -> everything paid back at the end of the loan
Amount Available for Investment: How much of the loan is still available for investment
Status: Whether the loan is current or late/overdue
Buy Back Guarantee: Does the loan have buy back guarantee (see below)
LTV: Loan to value, this is the ratio of the loan amount compare to the collateral provided for the loan. The lower the amount, the safer the loan.
Once you have narrowed down the loans you wish to invest in you can click into them and see more details about the loan. With car loans you can see the age and gender of borrower, the type of car purchased, whether the loan is current or late etc. At the beginning I found this very interested but now I just use Auto Invest so I don’t know the finer details about the loans I have bought. You can purchase a part of the loan starting from €10. You do not need to purchase the entire loan. Most loans are bought up by many different Mintos investors. To minimise your risk you should spread your investment across many different loans.
There is also a secondary market on Mintos.com although I have never used it. You can purchase loans at a discount on the secondary market for example you can purchase a €40 part of a loan for €38.76 which is a 3.1% discount but the loan is late by over 60 days. Loans that are purchased on the primary market can be resold on the secondary market. For example, if you invest in a loan in the primary market and realise you need the cash for an emergency, you can resell the loan on the secondary market, although you would need to sell the loan at a discount.
Buy Back Guarantee
The Buy Back Guarantee is issued by the Loan Originator to the investor. In the event the loan is overdue by more than 60 days and defaults, the loan originator will repurchase the loan. This means you will get the remaining principal you are owed for the loan back. Loans with Buy Back Guarantees are obviously more secure than without and hence have a lower interest rate attached to them.
There are currently 14 loan originators that sell their loans on Mintos.com. A loan originator is a company that issues loans to its clients who then sell part or all this loan on Mintos.com. Some investors have prefer some loan originators to others. Some loan originators might have more stringent requirements to issue the loans so may be seen as safer. I honestly don’t know much about the loan originators and it doesn’t impact my decision to invest or not.
Mintos offers an Auto Invest function which I use to control all my investments. There are lots of options to allow you only invest in specific loans. The majority of these fields are self explanatory. Minimum funds in the account allows you to specify an amount you alway would like left in you Mintos Account uninvested.
Loans are repaid according to their amortisation method to your Mintos account balance.
There are no fees for investing on Mintos.
Withdrawals are processed back to your Bank Account. They take 1-2 days to be processed. Any amount in your Mintos Account that is not currently invested in a loan can be withdrawn. You need to supply a copy of you photo ID to withdraw funds. You can do so by uploading it on their website.
I’ve only been investing on Mintos.com for 6 months now but have been very impressed. After using LinkedFinance almost exclusively I have now gone about 50:50 between Mintos for P2P lending and Degiro for ETFs. My Net Annual Return so far has been 12.41% compared to the measly .6% offered by Rabo Direct saving accounts. Yes there are more risks but it seems to be easy enough to mitigate the risks. I’ll continue to use Mintos and strongly recommend it to those looking to get in to P2P lending.
In the interest of full-disclosure, links to Mintos are affiliate links. Should you click through to Mintos via my affiliate link and complete an investment I will receive a small commission payment. These affiliate payments have no impact on my reviewing of the product. If you believe I have been influenced by the potential commission when reviewing a product please call me out.