Mintos Review – 3 Years Later (11,80%)

I’ve been investing on Mintos, the largest peer to peer lending platform in Europe, since all the way back in September 2018. Yet somehow, I never wrote a review for this platform.

I figured it was finally time to correct that.

Before we get into it, please remember that none of this is investment advice, just my personal opinion based on my own experience as an investor.

About Mintos

Mintos was founded in 2015 and is based in Riga, Latvia.

With over 7,25 billion Euros worth of funded loans so far and over 440.000 investors, Mintos is the largest European p2p marketplace. No other platform comes close to these numbers.

The average interest rate for loans on Mintos is currently 10,39% per year. While it is true that you can now on get higher interest rates on other p2p lending sites, Mintos still provides investors with the largest selection of available loans and loan originators from different countries, making diversification a lot easier.

Mintos received its IBF and EMI licenses

Mintos is now officially regulated and licensed as an international brokerage firm and electronic money institution. This should provide investors with an extra layer of security in the future.

Since becoming regulated, Mintos is slowly transitioning to offering its loans in the form of Notes. Depending on when you’re reading this, this might be relevant to you.

Notes are their way of offering p2p loans in the form of regulated financial instruments. Each set of notes will contain 6-20 individual loans and will have its own identification number and prospectus.

The minimum investment for notes will be 50€ each, up from the 10€ minimum we’ve had so far when buying loans on Mintos. However, since notes already contain 6-20 individual loans, we should actually be able to diversify our investment more easily.

I’m looking forward to seeing how these will look in more detail.

My Mintos Experience

I’ve been investing on Mintos since September 2018, so for over 3 years now. With a balance of over 7.840€, this is my largest account in the crowdlending space.

I earned a total of 2.303€ in interest from my loans on the platform so far. According to Portfolio Performance, here is my current internal rate of return on Mintos: 11,80%

If you want to know exactly how my money is currently distributed among loan originators and countries, as well as my average remaining loan term and interest rate, check out this video.

So far so good, but we also need to talk about my funds that are currently in recovery, as 2020 has been a pretty wild year for the p2p market.

Funds in Recovery

Throughout 2018 and 2019, I made the mistake of not diversifying my money properly on Mintos. As a result, I ended up with a large chunk of my Mintos portfolio invested in a single Polish loan originator, Capital Service.

That same loan originator ran into financial problems in 2020 due to the crisis, as did a few others. As the name funds in recovery implies, these funds are still in recovery, but the process and legal proceedings will likely take some time.

It’s also possible that this money won’t be fully recovered.

Still, I remain positive, as in my opinion the platforms track record with recoveries has been quite good so far. Either way, I’ll keep you updated via my monthly updates.

Investment Strategies

Ok, let’s talk about the Mintos auto invest, which was renamed to investment strategies.

I have to be honest, this is the part I like the least on the platform, as I’ve had to fiddle with these settings a lot and I’ve never been 100% satisfied with how I set it up.

It’s very possible that I could have saved myself a lot of time and been better off just choosing one of their pre-set strategies:

Yet sadly, the Diversified, Conservative and High-yield strategies come with two deal-breakers for me:

1. You can’t select a minimum interest rate. Personally, I don’t want to buy loans below 10% interest p.a.
2. You can’t set a maximum loan duration for the loans you buy.

But, if you go with one of these, you do get the benefit of being able to sell your current loans more quickly and without added secondary market fees.

So it’s something to keep in mind and decide for yourself.

My Custom Investment Strategy

That being said, here is how I would set up my own custom investment strategy on Mintos from scratch today. You can see the process in action here:

Again, this is an individual decision, so it’s ok if you do things differently. Here are the details:

Buyback obligation: I only select loans with a buyback obligation.

Lending company: Here I would choose a minimum rating of 7. If you want, you can also use the lender ratings on ExploreP2P as an extra reference and include some lenders with a rating of 6 as well.

Creditstar: Since I get my Creditstar loans at a higher interest rate (usually 14%) on their own platform Lendermarket, I deselect Creditstar on Mintos. If you’re not interested in using Lendermarket, you can keep Creditstar in your Mintos investment strategy.

Interest rate: I like to keep this at a minimum of 10% per year.

Remaining term: As for the remaining loan term, I usually set this one at 0-38 months, so a bit over 3 years.

Portfolio size: Make sure you set this larger than what you currently have on your account, if you want your funds to be automatically reinvested into new loans.

Investment in one loan: I usually set this at 10-50€ per loan.

Diversify across lending companies: I select Yes here.

Diversification settings: When it comes to diversification settings, you can either leave them the way they are set based on available loans or manually set a maximum of eg. 10-15% per loan originator.

You’re done! Now all that’s left is to click on confirm and save to activate the auto invest.

There you have it. That’s how I would set up my auto invest custom investment strategy if I was starting from scratch on Mintos today.

Sadly Mintos is still missing diversification settings for your entire loan portfolio. Right now you can only set them for each auto invest, which kind of sucks if you have several and you want to make sure you don’t allocate too much to a single loan originator. I really hope they’ll add this feature at some point.

Secondary Market

There is also a secondary market, where you can sell your loans early to other investors if you need access to your money before the end of the loan term. Mintos charges a 0,85% fee for selling loans on the secondary market.

Conclusion

Mintos is still the first platform I mention to new investors entering the P2P lending space. I’ve generally been happy with the performance of my investments here over the past three years.

Don’t get me wrong, Mintos is certainly not perfect. No investor is happy to see part of their investments stuck in recovery, me included.

For me and many others, 2020 was a good reminder to not only go after the highest interest rates, but to diversify and select well-rated lending companies with a profitable business model whenever possible.

Luckily, that’s easier on a big platform like Mintos, with its large selection of lending companies, offering loans from 34 countries.

Not only that, its license as an international brokerage firm and electronic money institution should give investors a bit more peace of mind when investing on the platform in the future.