The consumer loan marketplace is a multi-trillion dollar space that has been dominated by large banks and financial institutions since the birth of money.
With that being said, the crowdfunding phenomenon has since opened the doors to everyday investors. As such, it is now possible to earn passive income by lending out your hard-earned cash to third-parties.
At the forefront of this space is Mintos. Launched in 2015, the online platform allows you to invest from as little as €10 without needing to have any experience in financing. Instead, you simply need to deposit funds, choose an investment package that meets your needs, and Mintos takes care of the rest.
The returns available at peer-to-peer marketplaces like Mintos are typically much higher than what you’ll find in other investment spaces such as stocks and shares. This is why the phenomenon has become so popular in recent years. However, the industry is also fraught with risks.
As such, we would strongly suggest that you read our in-depth Mintos review prior to opening an account. Within it, we have left no stone unturned.
We’ll start by exploring what Mintos actually is, and how it works. We’ll then cover the fundamentals, such as how much you can make, who is eligible, where your money ends up, and crucially – what risks you need to be made aware of.
 | Mintos Visit |
|---|---|
| Product Type | Peer to Peer Lending |
| Potential Return | 11%+ |
| Fees | No Fees |
| Min Investment | €10 |
| Available to | EU, Argentina, Australia, Canada, Japan, Mexixo, New Zealand, The Philippines, Taiwan, Thailand, Vietnam, UAE |
What is Mintos?
Mintos is an online lending marketplace that was first launched in 2015. The platform has its headquarters in Latvia with other offices in Mexico and Poland.
In its most basic form, the platform allows everyday investors to gain exposure to the global loan space. In other words, by depositing funds into your Mintos account, the cash will then be distributed to third-party borrowers.
In return, you’ll be paid interest on your investment, much in the same way that a bank or building society would. In fact – and although we’ll cover projected yields in more detail further in our review, Mintos claims that clients can make an average return of 9.8% annually if an investment is made today.
This is significantly higher than what is available in the traditional investment space, which is evident in the sheer size of Mintos members.
At the time of writing, Mintos claims to have served 238,000+ investors from more than 68 nation-states. This amounts to more than 22 million individual loans funded, which equates to more than €4.3 billion in financing.
So who exactly does Mintos lend your money too? Well ─ the platform gives you the option of choosing the type of loan structure that you wish to fund. This includes everything from mortgages, business loans, car loans, personal loans, and even invoice factoring. Each loan type will, of course, come with its own risks and rewards, so you can choose a structure that best meets your appetite for risk.
Moreover, Mintos also gives you the option of choosing which countries you wish to gain exposure to. The platform currently partners with 64 lending companies in 32 countries, and we expect this number to increase year-on-year.
So now that you have a general overview of what Mintos actually is, in the next section we are going to explain how the investment process works.
How Does Mintos Work?
Mintos is a highly complex lending marketplace that offers a significant number of diversification strategies to reduce your exposure to potential defaults. As such, we have broken each stage of the investment process down so that you have a firm understanding of how everything works.
Third-Party Lending Companies
First and foremost, it crucial to note that Mintos is not a lender. On the contrary, Mintos sits between you as an investor, and third-party lending companies. As such, real-world lending companies will issue loans to the consumer and business marketplace, and then use Mintos to raise capital. This gives you the opportunity to choose the types of loans that you wish to back.
For example, let’s say that a loan company in Bulgaria wishes to issue a €30,000 business loan. The loan company will initially perform its own due diligence on the borrower. This due diligence process is performed exclusively by the third-party lending company, and not Mintos. If the loan is issued to the borrower, it will then be placed on the Mintos platform.
Choosing Your Investments
Once a third-party loan company has placed an individual loan structure on to the Mintos platform, you as a registered member will then have the opportunity to make an investment.
We’ll go through the ins and outs of how to choose an investment with Mintos later. Nevertheless, to give you an idea of the fundamentals, you’ll be presented with heaps of information on the structure.
For example, this includes the type of loan (personal loan, car loan, mortgage, etc.), the location of the borrower, the estimated yield, and the size of the loan.
Making an Investment
Once you have found a loan structure that you like the look of, you will then be able to make an investment. Most loans allow you to get started with an investment of just €10, which is great for diversification purposes.
Your investment will then be pooled together with other clients of Mintos.
Here’s a quick example to clear the mist.
- A loan company in Estonia has approved a €10,000 personal loan.
- As such, the loan now appears on the Mintos platform.
- You decide to invest €1,500 of your own money, meaning that the remaining €8,500 will need to be raised from other members of the site.
- Once the full €10,000 has been raised, Mintos will then close the loan offering and distribute the funds to the third-party loan company.
Getting Your Money Back
Once again, we’ll go through the full ins and outs of receiving your investment back at Mintos later in our review. However, to give you an idea of how it works, you will receive payments as and when they are made by the end borrower.
This works in exactly the same way as a bank or building society that lends money out, insofar that it will expect the borrower to make fixed payments at the end of each month.
Here’s a quick example of how repayments work.
- You invested €1,500 into a €10,000 personal loan.
- The loan structure is based on a two-year term at 10% interest.
- This means that the end borrower will need to make 24 equal payments at €461.45 per month.
- Every time the end borrower makes a payment, you will receive your proportionate share.
- As you own 15% of the loan, you will receive €69.22 each month.
- At the end of the two-year period – and on the proviso that no missed payments have been made, the end borrower would have repaid €11,074.78 on their €10,000 loan.
Eligibility: Can I Open an Account at Mintos?
Mintos accepts account registrations from both individuals and businesses. You must be aged at least 18 years old.
Crucially, you need to either have a bank account in a European Union country, or in a country that has a “AML/CFT systems equivalent to the EU”.
Those based in the UK cannot open an account.
Regardless of which country you are opening an account from, you must pass a basic KYC process before you can deposit funds.
This will require you to upload a clear copy of your government-issued ID. If you’re based in the EU, this can either be a passport or national ID card. If you’re based outside of the EU, then only a passport will suffice.
If you are considered to be depositing large amounts, then an enhanced KYC process will be required. This is likely to include a proof of source of funds.
Mintos Returns
The million-dollar question that most of you will be asking is how much you are likely to make at Mintos. Unfortunately, there is no one-size-fits-all answer to this question, as there are heaps of variables that can impact your potential gains.
Before we discuss this further, Mintos gives a couple of estimates on its platform.
- Firstly, Mintos claims that “90% of investors with at least €500 invested have earned 10% or more per year”. Upon scrutinizing this claim further, this figure is based on net annualized returns as of November 20th 2019.
- Secondly, Mintos also claims that investors can make an average return of 9.8% if an investment is made today. Crucially, historical performance is never a guarantee of future results, so do bear this in mind.
Nevertheless, the type of returns that you wish to make will depend on how much risk you are prepared to take, and the type of loans that you want to back.
As such, below we’ve listed some of the main variables that you will need to consider when making an investment at Mintos.
Mintos 2019 Stats
Here are some stats for 2019 which Mintos recently released.
How to Choose a Loan at Mintos
At the time of writing this review, Mintos is currently facilitating more than 233,000 loans.
This is an incredible number of individual loan structures, so you’ll have heaps of variables to consider. Most importantly, this gives you the opportunity to diversify across thousands of loans and thus – reduce your exposure to a potential default.
Currency
Mintos has partnered with third-party loan companies from a number of nations. As such, it makes sense that loans are facilitated in the borrower’s local currency. This includes everything from the US Dollar, Euro, British Pound, Russian Ruble, and Polish Zloty. This is where things start to get complex – and we haven’t even discussed individual loan packages yet.
The reason for this is that you have the opportunity to back loans in a different currency to the currency you used to make a deposit. For example, let’s say that you funded your Mintos account in Euros, and you decide to back a three-year loan to a borrower in Poland. Nobody knows where the EUR/PLN exchange rate will sit throughout the duration of the three-year loan term, so this presents both a risk and an opportunity.
In other words, if the exchange rate moves in your favour, you could amplify your returns as and when payments are made. On the contrary, the exchange rate could just as easily go against you, which in turn, will reduce your potential gains.
If you don’t like the sound of playing the currency exchange game, we would suggest sticking with loan structures that mirror your domestic currency. For example, if you deposited funds in Euros, only invest in loans that are priced in Euros.
Country
Mintos services loans in multiple countries. In fact, at the time of writing loans are available in 32 nations. This includes countries in Europe, South America, Central America, Asia, and Africa. Once again, this leaves you in a difficult position of knowing which countries to back loans in.
For example, would you feel more comfortable lending money to a borrower in a strong economy like the UK, and an emerging nation like Namibia? In reality, the creditworthiness of the end borrower is going to be determined by the individual or business that requires the money, and not the location per-say.
With that being said, investing in multiple countries also acts as an additional diversification tool. In doing so, you can reduce the risks of being exposed to a country that experiences an economic downturn.
Loan Type
The next variable that you need to consider is the type of loan that you wish to invest in. Each loan type will come with its own risks, which will be reflected in the estimated yield that comes with the structure.
Below we have listed the main loan types that Mintos deals with.
- Agriculture Loans
- Business Loans
- Car Loans
- Forward Flow Loans
- Invoice Financing
- Pawnbroking Loans
- Personal Loans
- Short-Term Loans
Not all loan types are available in each of the 32 countries that Mintos has partnerships with.
For example, while mortgages are available in both Spain and Romania, they are not in the UK. The specific loan type that you opt for will likely dictate the type of returns that are on offer, too.
For example, while you can make up to 12% in backing a mortgage structure in Romania, you’ll make around 5.5% by backing a personal loan to a borrower in Bulgaria.
Loan Originator
When selecting your investment filters at Mintos, you can also choose loan structures based on the underlying loan originator.
These are the companies that Mintos has partnered with, and who deals directly with the end borrower. This is really useful if you are prepared to put the extra legwork in, as you’ll be able to perform enhanced due diligence on the specific loan company.
Although this isn’t a requirement per-say (as Mintos strongly notes that it only deals with originators that have passed its own due diligence tests), doing so can add an extra layer of comfort on your chosen loans.
Buy Back Guarantee
You also have the option of choosing loans with or without the Mintos Buyback Guarantee. We’ll explain how this works further down in our review.
Loan Term
One of the most important metrics that you need to consider when choosing a loan structure at Mintos is that of the term. Generally speaking, the longer the duration of the loan agreement, the higher the risk of default. This is usually replicated in the projected yield attributable to the loan package in question.
Nevertheless, you will have a huge amount of flexibility in choosing a loan term. We found structures from as little as 2 months, which were based on short-term loans. At the other end of the spectrum, you can back mortgages with terms of 15 years or more. The yields on such loans are monumental, although so are the risks.
Once again, your best bet is to diversify across multiple loan terms to reduce your exposure.
Mintos Rating
Mintos also assigns individual loan agreements with a rating. This runs from A+ (lowest risk) to D (highest risk). The Mintos Rating system is actually based on the underlying originator, as opposed to the end borrower. Don’t forget, Mintos has no relationship with the end borrower, as it is the originators’ responsibility to perform the required due diligence, and set a relevant interest rate as per the perceived risk.
As such, Mintos bases the rating system on the originator’s ability to meet its contractual obligations with you as an investor. In other words, Mintos evaluates the likelihood of the loan company distributing its payments to the platform, even in the event that the end borrower defaults on the loan.
In order to assign a partnered originator with a risk rating, Mintos looks at five key factors. Each factor is individually weighted, which we’ve outlined below.
- Operating Environment (10%)
- Profile of the Company (15%)
- Strategy and Company Management (15%)
- Risk Profile (20%)
- Financial Statements (40%)
Although at first glance it might sound like a logistical nightmare to conduct enhanced research into each of the loan companies that Mintos has partnered with, it is important to note that the platform deals with just 64 originators. This allows the due diligence team at Mintos to conduct regular audits of the companies it lists on its site.
So now that you know the sheer number of considerations that you need to make prior to choosing a loan structure at Mintos, we are going to give you a couple of examples of investment opportunities currently listed at the platform.
Example 1: Personal Loan in Botswana
- Loan Size: 14,100 EUR
- Loan Term: 27 Months
- Originator: Dinerito
- Borrower APR: 2%
- Investor Yield: 11%
If you were to back the entire personal loan at 14,100 EUR, you would receive a total of 15,980.98 EUR over the 27-month term. This would amount to a total gain of 1,880.98 EUR.
Example 2: Business Loan in Romania
- Loan Size: 100,000 EUR
- Loan Term: 45 Months
- Originator: Mikro Kapital
- Borrower APR: 7%
- Investor Yield: 12%
If you were to back the entire business loan at 100,000 EUR, you would receive a total of 124,672.70 EUR over the 45-month term. This would amount to a total gain of 24,672.70 EUR.
Note: Although we have expressed the total amount of projected gains in both of the above examples, this would not represent a sensible investment strategy. Instead, you should attempt to diversify as much as possible and thus – reduce your overall exposure to an individual loan.
How Much do I Need to Invest at Mintos?
Mintos is true to its word as a crowdfunding platform for everyday investors, as you can get started from just €10 per loan structure. This offers you an excellent opportunity to diversify into as many loans as possible. For example, if you were to deposit €1,000 into your Mintos account, you could essentially back 100 different loans.
Invest & Access vs Auto Invest
When you open up an account at Mintos you will be given the choice of two account types – Invest & Access and Auto Invest. Here’s what you need to know about each account option.
Invest & Access Account
We have talked extensively in our Mintos review thus far about the importance of diversifying your portfolio. This not only centres on the type of loans that you back, the number of loans that you are exposed to.
Let’s say for example you decide to deposit €5,000 into your Mintos account. If you wanted to diversify your holdings to the maximum, then you would need to back 500 individual loans at €10 each.
Here’s the thing. Sitting at your desktop computer reviewing, analyzing, and subsequently selecting 500 different loans structures is going to take a significant amount of time and effort. In fact, it’s virtually impossible to dedicate the amount of time required. However, the good news for you is that the Invest & Access account does all of the hard work for you.
All you need to do is choose how much you want to inject, and Mintos will automatically invest in loans for you. Once the process is complete, you will be able to view each and every loan agreement that sits within your portfolio. At the time of writing, Mintos claims that the Invest & Access account will yield an annual return of 9.79%, which is huge.
Below we have listed some of the other benefits that the Invest & Access account comes with.
- All Loan Types: Mintos will diversify your portfolio of loans as much as possible. This will include most loan types (mortgages, personal loans, etc.), countries, currencies, terms, originators, and risk ratings.
- Buyback Guarantee Only: The Invest & Access account will only choose loans that fall within the remit of the Buyback Guarantee. Although we’ll cover this in more detail further down, the guarantee ensures that you get paid even if the end borrower defaults on the loan.
- Cashing Out: If you opt for the Invest & Access account, you will have the option of cashing out your portfolio at any given time. Mintos does this by selling your loan agreements to other members of the platform.
Auto Invest Account
The second option that you will have at your disposal is that of the Auto Invest account. As the name suggests, you will be required to make your own investments, and you will need to assess the fundamentals of each individual loan agreement before parting with your money.
On the one hand, this gives you the chance to take a hands-on approach to your investment strategy, as you will personally review and analyse each and every loan agreement within your portfolio.
On the other hand, the auto invest option does make it a much more cumbersome task in diversifying your portfolio. As we noted earlier, a €5,000 investment would allow you to diversify across 500 individual loans. However, doing this on a manual basis would prove difficult.
Getting Paid at Mintos
You will receive your money back at Mintos as and when the end borrower makes a payment, and the loan originator forwards the funds on. This operates in the same way as most other peer-to-peer lending platforms. The funds will be deposited into your cash account as soon as Mintos receives it.
Once the money is received, you can either withdraw the funds out, or reinvest them. If you are looking to engage in a sensible long-term investment strategy, it is well worth considering the merits of the auto-invest feature at Mintos.
This allows you to reinvent your loan repayments as soon as they are received. If you go with the Invest & Access account, the funds will simply be added to your current portfolio, albeit, new loan agreements will be sought.
The long-term advantages of automatically reinvesting your monthly repayments should not be understated. You will benefit from the fruits of compound interest, meaning that you will earn ‘interest on your interest’. In doing so, you will stand the chance to amplify your gains much faster.
What are the Risks of Investing at Mintos?
If you’ve read our Mintos review up to this point, then you’re no doubt excited at the prospect of making surplus of 10% in annual gains. After all, with traditional checking and savings accounts still paying a pittance, you can finally start to make your money work for you.
However, high returns such as those available at Mintos will, of course, come with an element of risk. Although all investments come with risks (even those backed by institutions such as the FDIC), the risks found in the crowdlending marketplace are much, much higher.
In a nutshell, this centres on the very real prospect of the end-user defaulting. If they do, then it can have a detrimental impact on the money you have invested at Mintos – even if you have diversified to the best of your abilities.
With that being said, Mintos offers a number of safeguards to cover the event of a default, which we have discussed further in the sections below.
Buyback Guarantee
One of the most important safeguards offered by Mintos is that of its Buyback Guarantee. If you’re a seasoned investor in the peer-to-peer lending space, then you’ll know that this is something offered by a number of Mintos’s industry rivals. For those unaware, the Buyback Guarantee ensures that you get paid even if the end borrower defaults on the loan.
The Buyback Guarantee is actually an agreement between the loan originator and Mintos. In other words, if the borrower fails to meet their obligations, the originator will purchase the loan from Mintos, who in turn, will forward the funds onto those with exposure to the loan.
There are a couple of important points to note about the Buyback Guarantee. First and foremost, it kicks in if the end borrower is more than 60 days late with payment. Secondly, the guarantee will cover the outstanding principal amount, plus any interest that is owed up to the point in which the default occurred.
Not all loans on Mintos come with a Buyback Guarantee, so it’s crucial that you check this out for yourself if opting for the auto invest strategy. If you decide to open an Invest & Access account, all of the loans packaged within your portfolio come with a Buyback Guarantee.
However, there is one such risk that must be considered with the Buyback Guarantee. In fact, many would argue that it is not a ‘guarantee’ at all for one clear potentiality – the loan originator defaults.
Default of the Loan Originator
As noted above, the Buyback Guarantee is only as good as the underlying loan originator that has agreed to honor it. If the loan originator does run into financial difficulties, then you stand the very real chance of losing your investment, not least because the loan company will not be able to cover the Buyback Guarantee.
Upon engaging in further research, it has been brought to our attention that a loan originator default has already occurred at Mintos. The originator in question was a Polish lender known as Eurocent. As far as we are aware, investors holding Eurocent loans within their portfolio are yet to receive any of their money back.
It remains to be seen what the eventual outcome of the default will be, as the liquidator will have the legal remit to collect repayments from Eurocent borrowers as per any outstanding agreements.
The overarching takeaway here is that your money will never be 100% safe at Mintos, as is the case with any investment platform. However, by engaging in a sensible diversification plan and sticking only with loan originators that have agreed to the Buyback Guarantee, you stand the best chance possible of reducing your risk.
How is the Buyback Guarantee Funded
If you read through the two example loan structures that we discussed earlier in our review, you may have noticed that each agreement comes with two different interest rates. This includes the ‘borrower APR’ and ‘investor yield’. You may have also noticed that in some cases, there is a huge disparity between the amount of interest that the loan originator charges, and the amount of yield that the investment generates.
For example, the personal loan package that is available in Botswana comes with an investor yield of 11%. Sounds great, right? On the one hand, 11% is a fantastically attractive yield. However, it doesn’t sound quite as attractive when you find out that the end borrower is paying 38.2% on the very same agreement!
That is a huge mark-up that the originator is making, so it’s important that you consider the affordability of such a high APR. On the flip-side, this disparity in interest and yield ensures that the loan originator has ample room to cover the Buyback Guarantee.
Mintos Fees
One of the best things about choosing Mintos as your go-to crowdfunding platform is that you will not pay any fees.
Not only does this mean that you can deposit and withdraw funds without being charged, but each and every investment that you make is done on a fee-free basis.
This is in stark contrast to other crowdfunding platforms in the space, which often charge on two-fronts. This can include an annual maintenance fee to cover the costs of running the platform, and a commission on the amount that you invest.
Deposits and Withdrawals
Mintos offers a number of options when it comes to depositing and withdrawing funds. The specific option that you have available to you will depend on where you are based. As such, you are best advised to check the deposit page within your account portal.
Nevertheless, here’s a breakdown of the three payment methods supported by Mintos.
- Trustly
- Bank Transfer
- TransferWise
Depending on where you are based, you will have the option of depositing funds in either EUR or USD. Don’t forget, you also need to make considerations regarding ongoing exchange rates if you decide to back a loan in a currency other than your Mintos base currency.
Secondary Marketplace
The vast majority of investors will hold onto their loan agreements until they mature. That way, they know exactly how much they will get back from their investment – providing the borrower meets all their payments.
However, there might come a time where you need to raise some cash and thus – seek to exit the loan agreement early. The good news for you is that a secondary market now exists at Mintos.
This allows you to list your investments for sale. If another Mintos user likes the look of your investment, then they can purchase it at the listed price. You might need to offer a more favourable deal if you seek a fast sale, although it’s well worth seeing if you can get the full market value first.
If we were to take the stats published by Mintos as gospel, then more than €247 million worth of loans have been bought and sold through the secondary market. This at the very least indicates that there is sufficient liquidity to offload loans as and when the need arises.
Take note, you cannot list your loan agreement on the Mintos secondary market if the loan is late or in default. If this is the case, you will need to rely on the Buyback Guarantee, if such a guarantee exists.
Mintos Customer Support
If you need to speak with a member of the Mintos customer service team, you have a number of options available. The easiest way to make contact is via live chat, although this wasn’t available when we attempted it ourselves.
You can also call Mintos directly, and the platform offers a number of local toll numbers.
Alternatively, you can send Mintos an email at support@mintos.com
How to get Started at Mintos Today: Quickfire Step-by-Step Guide
Like the sound of what Mintos offers for your long-term investment goals? Here’s a quickfire step-by-step guide on how you can get started today.
- Step 1: Visit the Mintos Homepage – To get the ball rolling you will first need to head over to the Mintos homepage. Once there, enter your email address and click on ‘CREATE ACCOUNT.’
- Step 2: Enter Your Personal Information – As is the case with all investment platforms, you will now need to let Mintos know who you are. You will need to provide your full name, home address, date of birth, and contact details. Make sure these details are correct as you will need to verify them in the next step.
- Step 3: Verify Your Identify – In order to remain compliant with relevant anti-money laundering laws and regulations, Mintos will need to verify your identity before you can proceed to deposit funds. This is a super-easy process and merely requires you to upload a copy of your ID. Mintos should be able to confirm your document automatically.
- Step 4: Deposit Funds – Once you have had your identity verified, you can then fund your account. Head over to the deposit page found within your account portal, and review the payment options available. Follow the on-screen steps to complete the payment.
- Step 5: Choose Your Investments –As soon as your deposit has been credited, you can then make an investment. You can either sign up for the Invest & Access plan, or choose your own investments on a loan-by-loan basis. Once you have confirmed the investment, the amount will be taken from your account balance.
- Step 6: Receive Monthly Payments – Once you have invested in a loan agreement, you will then receive monthly repayments as and when the end borrower makes a payment. You can then reinvest the funds into other loan agreements, or withdraw the cash-out. As a side tip, you shouldn’t leave the funds idol in your account, as you won’t be able to benefit from compound interest
Conclusion
Mintos is definitely one of the best companies operating in this space, they have been around for years now and have secured a great reputation and offer some great returns for investors.
As their 2019 stats wrap showed, they increased the amount of investors on the platform from 98,547 to 234,857 ( an increase of 138% ) and the amount of interest paid out to investors grew from 31million to 77million. These are very impressive numbers and go to indicate that the company is growing from strength to strength.
If you are looking to get involved in the P2P lending space, then we highly recommend you take a look at Mintos, they are up there with the best.
Mintos
Pros
- Easy, Fast Signup
- Good Liquidity
- Good Returns
- Buyback guarantee on loans
- Excellent Reputation
Cons
- Risk of Defaulters
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