Mintos Review: Passive income from p2p lending

Mintos is a European p2p lending platform. P2p lenders use the Mintos platform to offer their loans to lending investors. Mintos is present in Europe, South America and Asia. They offer lending in different types of loans such as mortgages, pawnbroking, personal loans, car loans and others. Each loan has a different interest rate and duration. Some loans are backed by an asset and others with a buyback guarantee, this gives some investor protection.

Interests Rates up to 14%

Mintos offers high-interest rates compared to traditional bank accounts. These loans have a higher interest rate than bank accounts because the capital is at risk. In a bank account the capital has very little risk and is generally insured by the government, Minto’s loans do not have any kind of government insurance or guarantee.

While Minto’s interest rates ranged around 10% for an important period, they are not slowly trending down to the disappointment of many long-standing Mintos investors.

Interest from loans held on the platform provides a source of passive income. Learn more about the 12 advantages of p2p lending.

BuyBack Guarantee

Some loan originators offer insurance in the form of a buyback guarantee. This is a form of insurance that binds the loan originator to pay back the capital and interest if a loan is unpaid (usually after 60 days of non-payment). f the loan originator fails or defaults then there is no one to pay for the guarantee Take this guarantee with a pinch of salt.

Quality of Loan originators

Mintos is a platform, and there are a lot of different loan originators, they come with different levels of risks. Mintos gives them a rank, which helps investors determine their risk-reward ratio.

A Mintos Loan originator, EuroCent,  has defaulted on its Mintos ‘buyback guarantee.’

Research into the quality of loan originators is difficult because Mintos does not provide consistent and up to date data on each of their loan providers. In addition, this data comes in different formats due to different accounting practices and currencies, this makes it very difficult to compare the solvency of each of these loan originators.

The loan originators failure to disclose important, timely information is the biggest risk to lenders, and Mintos as the platform owner may want to consider what information should be mandatory available to all investors.

Using the fine print against the investor

Loan originators have the right to buy back loans they have issued on the platform. Investor agrees that the loans they have bought can be bought back by the loan originators. What Hippocredit (a company owned by Mintos) and Mogo did, is that they issued relatively low-interest rate bonds and then used this capital to buy back the loans they issued on Mintos.

The problem here is that these originators buy back the best performing loans the ones that never missed a payment. Investors who bought these loans were used as guinea pigs,  the data that was created at their expense was then used against them by the loan providers!

Automated investing

The great thing about Mintos is that the passive income stream can be compounded. Once interest is paid the proceeds, this can be automatically reinvested into another loan. The minimum amount of loan investment is 10 Euros. Loans can be bought manually or automatically. The auto investor filter can be set to buy specific loans either on the primary or the secondary market.

The filters include almost all the loan variables including. LTV (loan to value), loan originator, country,  buyback guarantee and many more

There are two ways to invest automatically one is by the custom auto investor the other is with a set of predetermined investor strategies.

Custom strategy preset strategies

  • Short term
  • Diversified
  • Secured Loan strategy

Learn More:

Primary Market and Secondary Market

Loans on the primary market are sold by the loan originators to investors. Loans on the secondary market are being sold between investors. The auto investor can be set to pick loans form either of the markets. The secondary market allows investors an early exit from an investment. Depending on that particular loan, the loan can be sold either at a profit or loss.

Risks

Any loan investment has limited upside when compared to equity investment. Meaning, the maximum capital returned is the capital lent. Equity investments have both the potential for passive income and capital gains.

It seems Mintos can be more transparent with information about their loan originators, this opaqueness in information is also due to a lack of regulatory oversight regarding these relatively new p2p platforms.

Also, some loan originators have been buying back their best loans back. These can cripple a balanced portfolio, leaving it only with bad loans threatening the passive income streams planned by the investor.

Cash drag happens when cash is idle in an account this limits the amount of passive income generated.

There are many more risks to be aware of when investing in p2p lending, please do your own research. There are certain steps that can be taken to reduce risks to your p2p passive income.

Alternatives to Mintos

  • Peerberry – Consumer and property loans in several EU Countries
  • Bondora – Offering a 6.75% interest with their “Go&Grow”  or selecting loans manually.
  • Robocash – Offers loans in Kazakhstan and Spain with interest rates around 13%
  • Estateguru  – Property backed loans in Estonia interest range around 10%
  • European Crowdfunding
  • ViaInvest

Mintos Passive Income

On Mintos the passive income investor can choose either

  • To cash out the interest generated
  • Re-invest the interest in other Mintos loans.
  • Re- invest the interest in other investment.

The auto investor has a setting that will allow you to keep a cash balance in the account; this can be used to automate the passive income function.

Mintos is not entirely passive, because new loan originators are being added, the economic outlook of countries is changing, and new investment opportunities are being created.

Conclusion

Mintos is an excellent tool for passive income and an interesting part of a diversification strategy. With Mintos, it is easy to diversify outside the stock market and within the p2p lending space. It has been around 2015.

Not investment advice. Not financial advice. Consult your financial advisor. Not a recommendation to buy, sell or hold. The staff of this site may own these digital asset/s mentioned on this page. Investing is risky and you may lose all your capital. See full disclaimer.

Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice for you.

Author: Jim Reynolds
Jim Reynolds. Is passionate about finance, passive income and cryptocurrencies. He writes about his passions on NodesOfValue.com. He has worked in the tech and financial industry for a few decades. He holds a masters in business admin and a bachelors in IT. All his writings are not investment advice.

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