Mintos Review – My Unbiased Lender Review

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mintos review

Mintos Review

** Mintos review updated December 13th 2016 **

Mintos offers a variety of loan options from guaranteed buy-back personal and business loans to mortgages. Investing in Euros does present some currency risk but the returns are high enough to be intriguing. Read on for my unbiased Mintos review.

My current rate of return: 12.46% (After fees but before tax)
Annual Returns My Risk Rating * Early Exit Provision Fund Min Investment Deposit Bonus
5.5% - 20% D- X €10 1% of Deposit

* This opinion risk factors in loan types, interest returns, platform history, default numbers and my own investing experiences.

The Mintos Review – What You Need to Know:

Major Pros
  • Rates of return up to 20%
  • Guaranteed buy-back loans
  • Some loan partners have skin in the game
  • Wide range of loan options
  • Good loan availability
  • Secondary market for exit
Major Cons
  • High risk
  • Based outside the UK
  • Have to pay to transfer £’s to €’s then pay to wire transfer deposits
  • Non-guaranteed loan defaults can be high
  • Some loans unsecured
  • No provision fund
  • Auto Invest tool inconsistency
  • 1% fee to sell loans on secondary market
Mintos Review: My experiences so far….

Mintos was one of my early peer to peer investing experiments. Out of the two European platforms I invested in, Mintos is my favorite. I only invest in guaranteed buy-back loans paying 12.5% +. I experimented with mortgage loans and found the late payments to be too frequent and didn’t think the extra 2% returns were worth the risks.

My investment in Mintos is relatively small and will remain so for the time being.

What Is A Mintos?

Mintos is a Latvian based peer to peer marketplace that couples borrowers with lenders. Mintos offers many different loan types including car loans, mortgages, invoice financing and small business loans.

How Can I Contact Mintos?

Email: Support(at)mintos(dot)com
UK Tel: 0157-893-0033

When Did Mintos Launch?

2014

Are They Regulated? 

No

How Do I Sign Up?

Click here to sign up (This is a referral link which gives us both a 1% cashback bonus on your deposited amount. This amounted is based on the average daily invested balance over a three month period and is paid in three installments – 30,60 and 90 days. This bonus is paid by Mintos and does not come out of your funds. Programs like this help keep Financial Thing running).

Who Can Open An Account?

Anyone who has a bank account in the EU or who resides in a country that has similar AML / CFT (Anti-Money Laundering and Combating Financial Terrorism) protocols to the EU. Sorry my American friends. Your government regulations prevent you from investing. Things may change after the Brexit so if you are considering opening an account, I would do it soon.

What’s the Signup Process Like?

I was approved once I passed the identification and money laundering checks. The process was easy.

What’s The Minimum Deposit / Investment?

€10

Does Mintos Offer An Innovative Finance ISA?

No

How Much Interest Does Mintos Pay Lenders / Investors?

Annual gross return rates range from 5.5% to 15% depending on the types of loans you purchase.

Is Interest Paid Immediately Or When the Loan Starts?

Interest accrues immediately on purchase.

When Is Interest Paid?

Payments are received at different times throughout the month.

Am I Lending To The Mintos Platform Or To Borrowers?

All loan contracts are between the investors and borrowers.

What Are The Fees?

There is 1% fee on any secondary market loan sale.

What Are The Length Of The Loans?

This depends on the type of loan. Some mortgage loans are as long as 13 years while small business loans are as much as 7.5 years. Car loans can be as long as six years while personal loans can be as short as two weeks. Loans can end at any time due to repayment.

What Security Does Mintos Loan Against?

All mortgages are secured by property. Business loans are usually secured by a mix of property, business assets and /or personal guarantees. Personal loans are usually unsecured.

What Are The Loan Default Rates? 

Default rates change daily so please check them here.

What Are The Main Risks?

Platform failure: Mintos is a riskier platform to invest in because it is based in Latvia. If Mintos goes bust, would lenders funds be recoverable? I’m not sure as it would depend on the third party administrator. On a positive note, Mintos does have a UK office and contact phone number and offices in other European countries. Mintos is attempting to acquire UK FCA regulation but the progress is unknown.

Economic: European economies tend to be more volatile than the UK’s. Many of the loans are given to residents of economically volatile countries such as Spain and Lithuania.

Lowering of Underwriting quality: If Mintos lowers its loan requirements then the quality of loans will decrease resulting in greater default risk.

Currency risk: Investing in Euros means currency fluctuations can adversely affect your account value. On the other hand as seen post Brexit, it can be good to have currency exposure.

Defaults: Investing in non-guaranteed loans increases default risk.

Is There A Provision Fund?

No

What Happens If Mintos Goes Bust?

Mintos has hired a company called FORT to act as an administrator in the event Mintos goes out of business. In theory Fort would collect and distribute loan payments to lenders and distribute them. Who knows if lenders would actually receive their loan repayments.

Let’s hope Mintos stays in business because a platform failure would be terrible for the peer to peer lending industry.

WHAT I LIKE ABOUT MINTOS:

Guaranteed Buy-Backs

In my opinion, the biggest benefit of investing through Mintos is the guaranteed default buy-backs offered by some loan partners. If the borrower fails to pay after 60 days, the guarantor loan partner repays all past due capital and interest. This buy back decreases risks to lenders and is the sole reason I invest through Mintos. I probably wouldn’t invest through Mintos if the buybacks were eliminated.

I’ve always received the buyback funds on time whenever my loans have gone over 60 days past due.

Returns

It is possible to get returns in the 20% range if you are willing to take high risks. I only buy guaranteed loans that pay 12.5%+ returns.

Skin In The Game

Some loan partners invest their own money into their loans. This amount varies by loan partner but ranges from 5-15% (see here for the summary). It’s nice to know the loan partners are taking on some of the loan risk alongside lenders!

The Secondary Market

An active secondary market means it’s easy to purchase loans to quickly build up your portfolio. Secondary market as loans are often marked up with premiums so be careful when you buy (see yellow highlights below):
mintos review

Since the high paying guaranteed car loans were removed from the primary market, I starting using the secondary market to buy these loans.

Loans Amortize

This means you receive capital and interest payments monthly. When loan balances reduce over time, so does the risk.

Website

Mintos’s website is very easy to use and features an intuitive design that is easy on the eyes.

Here is the dashboard:

mintos reviewSimply laid out with all the important information. Well done Mintos!

WHAT I DISLIKE ABOUT MINTOS:
Based Outside The UK

Another layer of risk is added because Mintos is based in Estonia. First let me state that I think Mintos is a legitimate company and I have been happily investing with them for a while. The problem is, if Mintos goes bust, money recovery could be difficult as you will be placing your trust into an European third party administrator for loan collections. Mintos does have offices in other European countries including the UK, but they aren’t regulated in the UK.

This is why my relatively small Mintos investment has stayed small. Mintos has discussed becoming FCA regulated. If this happens, I would consider upping my investment because I like Mintos’s business model.

Non-Guaranteed Loans Are Risky

At the beginning of my Mintos investing, I tried investing in some high return rate non-guaranteed loans such as mortgages. Multiple late payments made me uncomfortable so I sold them on the secondary market. I believe it makes much more sense to accept 1.5% less on a guarantee buy-back loan. I have no idea how effective Mintos’s defaulted real estate recovery process is.

Secondary Market 1% Sale Fee

For selling, the secondary market comes at a price of 1% of the total amount sold. As secondary market fees go, Mintos has one of the highest. While not a deal breaker, the 1% fee will affect your annual returns so the secondary market should be used sparingly.

You also have the option to add premiums to your secondary market loan offerings but expect much slower selling times.

No Provision Fund

In most cases, provision funds are good for lenders as they theoretically offer an extra safety net in case of loan defaults. Mintos doesn’t offer a provision fund therefore lending risk is increased.

Euro Based

All investing in Mintos is in the Euro currency. This means you have the added inconvenience and expense of currency exchanging and wire transferring. Thankfully Transferwise has made this process much easier and cheaper than using standard banks. (Use my link to receive a fee free transfer of up to £500.)

Auto Invest

The Auto Invest tool feature allows you to set criteria in which repayments and interest are automatically reinvested into new loans. In theory this is a great feature but I’ve found the tool to be inconsistent. There have been times when I have logged into my account only to find money sitting idly by.


My Strategy

I stick purely to guaranteed buy back loans currently paying 12.5%+. I’ve tried diversifying into mortgages to increase returns but I experienced frequent late payments. For me a couple of extra interest points aren’t worth the extra risk. There are also other types of loans such as business loans. If Mintos continues to offer loan buy-back guarantees, I will continue to reinvest.

The Mintos Review Conclusion

Mintos has been a great experience so far. I love their guaranteed buy back loans and will continue to reinvest solely in these. Other loan types paying higher interest returns are available but for me, the extra risk isn’t worthwhile. There is some currency risk involved since you are investing in Euros so your risk appetite should determine how much you invest.


Click here to sign up (This is a referral link which gives us both a 1% cashback bonus on your deposited amount. This amounted is based on the average daily invested balance over a three month period and is paid in three installments – 30,60 and 90 days. Programs like this help keep Financial Thing up and running). Don’t forget to use the awesome Transferwise to exchange from Pounds to Euros. It’s fast and much cheaper than the banks. (Use my link to receive a fee free transfer of up to £500.)

If you enjoyed my Mintos review and want to learn more about peer to peer lending, click here and receive my complimentary Top 5 Peer to Peer Lending Sites Report.

This unbiased Mintos review is for information purposes only and should not be considered investment advice. Opinions expressed in this Mintos review are based upon my investing experiences. All information was deemed to be correct at the time of writing. Peer to peer lending contains risks so never invest more than you can afford to lose.