Bondora Review

Bondora is the oldest P2P lending platform. Founded in 2009, and based in Estonia, Bondora focuses on unsecured consumer lending throughout Finland, Spain and Estonia. They have a long track record of 11 years and have over 81,000 investors who invested over €281Mill and earned €32Mill. Returns are in the range of 9% – 17% making it an appealing platform to invest small in multiple loans.

Just like Mintos and Grupeer, Bondora offer short term business and consumer loans. FYI, since all loans are unsecured this is a high risk investment platform but, with a long history of track record they do offer lots of stability. Because they enable investors to invest as little as €1 this is the perfect platform for small investors and beginners.

I started on Bondora in May 2017 and have been adding to my investments ever since. Returns have been stable and at a top of 17% which is one of my top performing platforms. They are very transparent with their loan process and publish all data that can be seen here.

Getting Started

  • €0 fees for opening account
  • €0 fees for investing
  • €1 as a minimum investment
  • Avg interest rates of 9%-17%
  • EUR investments through revolut or transferwise

Money Security

As mentioned already Bondora does not offer secured loans and therefore do not have a buyback guarantees unlike other platforms. I’ve scoured their terms and FAQ page to gather everything about the security of our money so that you wont be throwing your money in the blind.

When depositing money, the cash is held in a segregated user account in SEB Bank, one of the largest banking groups in Scandinavia. (more about their credit ratings here). The money transferred to Bondora may only be used pursuant to Terms of Use and for performing the obligations of the loan agreements. Therefore the respective money does not belong to the bankruptcy assets of Bondora and a claim for payment cannot be made for the money in enforcement proceedings, and it shall likewise not be reflected in the balance sheet of Bondora.

Default loans

In case of a death of the borrower with a loan outstanding, Bondora works with the executor of the borrower’s estate to secure repayment of the loan.  If however the death is close to the near term date of the loan, no payments will be collected, as the time required for probate of the estate may extend beyond the initial and final maturity dates of the Credit Asset. So in other words, in case of insufficient funds the loan will be written off.

In case of a loan falls default there is a 3-way recovery process.

  1. In-house recovery collection (1-74 days overdue)
  2. Default and court (75+ days overdue)
  3. Bailiff (200+ days overdue)

The bailiff is an official from the local court. The case is handed over to a local bailiff after the court makes a favorable decision and the subsequent speed of recovery depends on the income and assets of the borrower. Bondora receives a quarterly update on the status of the collection.

You can read more about their recovery process here;

Auto-Invest Feature

Unlike other platforms, Bondora can be quite overwhelming with plenty of options and strategies. The only way to invest is through their ‘Auto-Invest Feature’ which are the Portfolio Manager or Portfolio Pro. These are two very similar tools that will automatically match your investment with borrowers. Different to Grupeer, there is no manual selection of loans through Bondora. Depending on your level of risk and experience you can opt for either option. Keep in mind that the auto-invest tool only works with the Primary market. Manually you can invest in the secondary market.

Portfolio Manager

The Portfolio Manager is allows investors to automate the investment process based on the level of risk you are willing to take. Investors has the option to choose between ultra-conservative, balanced and up to opportunistic level. Based on the risk level, the proposed amount to be invested, and the proposed number of years of investment, Bondora provide an expected distribution of loans and an expected return for the time period selected.

Bondora Portfolio Manager

Bondora Portfolio Manager

Portfolio Pro

Portfolio Pro allows investors to have more control over the level of diversification in their investments. It provides more options and flexibility than the Portfolio Manager. Portfolio Pro allows investors to create different strategies and run these as separate portfolios according to your own rules. This is more for the advanced user who is comfortable with the platform and knows more about the risks in P2P.

Bondora Portfolio Pro

Bondora Portfolio Pro

Secondary Market

You can buy second hand loans too. For alot of reasons, investors use the Bondora Secondary Market to exchange (buy/sell) their loans amongst themselves, which they previously acquired through the Portfolio Manager, Portfolio Pro. If you want to sell loans from your portfolio or buy them from others, the Secondary Market is the place to go.

If you’re thinking of investing manually via the Secondary Market instead of using the portfolio pro or portfolio manager, be aware that this is a high-risk strategy that often results in a lower net return (and even losses).

Interest Payments

It is very hard to predict the % returns. Due to high activity in short term loans and small amounts it is very hard to forecast your interest payments. Every loan do have a payment schedule, but its quite common for borrowers to pay after the due date. My current net return is of 15.71%, making it one of the highest paid platform im invested in.

Bondora Grow & Go

The Grow & Go by bondora is the latest great feature for any investor who is looking for low risk investments and is not willing to commit his investment for long term. Go & Grow is an automated investment tool, which allows investors to add money to an account paying 6.75% p.a. Investors are able to track returns on a daily basis, and investments can be liquidated at any time. I have been adding money lately to this fund type as at some point soon I will need to liquidate my money.

My Personal Experience

So far it has been great. Its my longest time on a p2p platform and I have full trust in them. My biggest downs are that they offer unsecured loans, have a very overwhelming UI and are not very transparent. Its also hard to forecast the returns. But on the upsides its the perfect platform for beginners, they offer great diversification especially for low risk investments with their Grow & Go and have been promising with alot of updates about to come.

FYI; I did come across investors who actually lost money through the platform, I dont know what their strategy was but the platform do experience alot of overdue payments, and defaults due to their unsecure loans.

Bondora Dashboard

Bondora Dashboard

Signup Bonus & Cashback Offer

Earn a simple €5 when just opening an account. After that a 5% cashback bonus paid on the net investments within the first 30 days.

Open Free Account

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