Ready to start building on your passive income? In this Mintos review, you will learn everything there is to know about the platform and how you can build up your passive income through peer-to-peer (P2P) lending.
Do you want to invest in loans and diversify your portfolio? Another great platform to build up passive income with P2P lending is Mintos. There are a lot of opportunities to invest in different loans. This will be a great way for you to jumpstart your investment journey.
In 2020, Mintos had been criticized because some of its loan originators backed out. This was a challenge for the platform, but their loyal customers certainly did not think so. They have attested that their portfolios are doing great. And I am one of them!
In this Mintos review, Let me share with you my experiences with Mintos, its pros and cons, and my results with the platform. Then, give it a thought if this may be a fit for you.
Introduction To Mintos
Mintos is currently one of the most popular P2P lending platforms in Europe. It’s the largest and most advanced platform, and it has excellent returns.
Mintos is the biggest European P2P lending platform with over €6.9 BILLION invested. This money is divided among more than 424,000 investors from 62 countries.
With Mintos only being funded in 2015, you can see how quickly the company has grown. Over the past years, what has contributed to the growth is their transparency, easy use of their platform, and great returns. They offer an average return of 12.42% as of 2021.
I’ve invested over €2500 in Mintos and get 12.24% interest from that. What makes Mintos unique is its buyback guarantee and the wide selection of loan originators, making it the foundation of my P2P portfolio.
I made my first investment with Mintos in April 2019, and I totally fell in love with it.
I want to introduce you to Mintos and step up your passive income game. Currently, I have just over €300 monthly passive income. If you’re going to start building your passive income, this is where to start!
Just as a reminder: generally, in investing, the higher returns you have, the more risk you take. Make sure you know the risks associated with peer-to-peer lending to make a fully informed decision!
What Is Mintos?
Mintos is a P2P lending platform that started in Latvia in 2015. They offer a wide range of loans: personal, business, short-term, car, mortgage, agriculture, pawnbroking, and invoice financing.
At the time of writing, Mintos has more than 215,000loans outstanding in the primary market and 94,000 on the secondary market from 56 loan originators in 29 countries.
Besides that, they have paid over €160 million to investors in interest. Not bad, right?
Below you can see the loans funded, which is a great metric to see the growth of Mintos over time.
Mintos has impressive numbers given that it has only been around for six years. It is the biggest player at the moment, and Mintos will continue to grow for sure!
Since they could grow their platform so much and get a great reputation in the peer-to-peer world, Mintos is a profitable company. They are not only turning over huge amounts of loans given out, but they are pocketing a piece of the pie.
This means that they will be around for longer, given that many companies in the peer-to-peer world are still starting and do not have any profit.
How Mintos Works
Mintos is a marketplace for loans, meaning that several loan originators bring their loans to Mintos and sell it on the marketplace. This means Mintos does not issue their loans, and they do not put their own money in those loans.
Mintos does carry (part of) the risk, as they’re giving a buyback guarantee on some of their loans. That means the loan originator will buy back the loan plus interest when the borrower can’t repay it.
Loan originators pre-fund the loans before selling them on the Mintos marketplace. The part that loan originators are investing in those loans is referred to as ‘skin in the game.’ This is a requirement from Mintos to the loan originators to ensure they issue valid loans.
The loan originators are very important in the Mintos structure. They provide a lot of information per loan originator. They even analyze them and give them a score based on the risk. This enables you to analyze the loan originators and only invest in the ones you feel comfortable with.
Why Is Mintos So Great?
Many loans issued on Mintos provide a buyback guarantee. This means that the loan originator will repurchase the loan from you if it defaults, plus most loan originators pay the interest you missed while the loan was not paid. Missed interest paid is mostly for 60 days because, after 60 days, the buyback guarantee automatically kicks in.
The great thing about Mintos is that it is an easy-to-use platform, the returns are great, and the fees are low. For an investor, there are no costs associated with investing in Mintos.
Since there are so many loan originators and types on Mintos, it is easy to diversify your investments on just one platform. You can start investing with as little as €10 to try out the platform and see what you’re comfortable with.
When you sign up using this link, you’ll get 0.5% cashback for the first 3 months on the platform.
Features Of Mintos
Mintos is a great platform for you to earn passive income. Here are some of the main features that can help you as an investor.
A big risk with investing in P2P lending is that the borrower cannot pay the money back. How does the buyback guarantee work? Does it protect you from this risk?
The buyback guarantee means that the loan originator repurchases the loan from you as soon as the payment is delayed by more than 60 days. They will pay you the principal amount that is outstanding at that point in time, plus interest income that you have yet to receive. This means you will still get the return you were expecting to receive.
This is a good protector when investing in P2P lending, but it does not protect you against all risks.
Does it actually work? In the 2.5 years that I’ve been investing in the platform, the buyback guarantee kicked in on €1405.31 of my loans. So the loan originators actually buy back loans from the platform.
Mintos Auto-Invest Tactics
With Mintos, you can use the auto-invest function to set up different auto-invest strategies. When you set up your criteria, Mintos will fill your orders automatically when they meet these criteria.
I’m a lazy person – or how I like to call it: efficient.
I prefer to set and forget it without ever having to think about it again. This is why I only invest in Mintos using their auto-invest functionality. It enables me to invest in loans meeting my criteria automatically.
When you’re using the auto-invest function on Mintos, you can prioritize your various auto-invest strategies.
What does that mean?
Mintos will execute as many orders from your highest prioritized auto-invest strategy because moving on. I use this prioritization to invest in high-interest loans before I move on to lower interest loans.
My auto-invest strategy for the primary marketplace look like this:
As you can see, the highest priority strategies have higher-interest loans. I also allow a larger investment in a single loan for those.
There is one red strategy name. That was one strategy I used when I was not really familiar with the settings. I am always trying and seeing how it works out. Well, I stopped that investment strategy shortly after.
Why? Because I selected loans without a buyback guarantee, because I didn’t set a maximum term (I have a mortgage of 220 months in my current portfolio, yay), and I set my interest rate way too low.
One good thing to be aware of, once you bought the loans, you can only sell them through the secondary marketplace. You can’t cancel your order.
Let me walk you through my settings:
- Loan originators: I made a selection of the most reliable loan originators
- Rating: all loan originators above B- in risk rating
- Loan types: all
- Country: all
- Buyback guarantee: YES
Side note: if there are new loan originators, loan types, or countries, you have to enable them once they’re added manually. I go through my investment strategies at the end of every month to enable them.
- Interest rate: my intervals start from 14% up to 20.5%. For each investment strategy, I decrease by 1%, so my next plan would have an interval of 13% up to 20.5%
- Remaining loan term: 1 month to 24 months
- Reinvesting: Yes
- Include loans already invested in: No
- Diversify across loan originators: Yes
- Portfolio size: Depends, I set mine to 333€ per strategy to start with
- Investment in one loan: €10- €15
Once you press ‘save’ and ‘activate’, it will start to fulfill your orders. Make sure you put a cap to your portfolio size, so you can check if you set them up correctly. That’s what really saved me when I had the wrong setup.
Once you make an order, there are no cancellations. You can only try to sell your loans in the secondary marketplace.
Read more about my actual auto-invest settings to maximize your return on the platform.
The Mintos Secondary Marketplace
The Mintos secondary marketplace is where people can buy and sell loans, where offers can be quite attractive. It has a lot of loans available, and you can sell your loans any time you want. This means a lot of liquidity for you as an investor.
Mintos is making the secondary marketplace as easy and accessible as possible. You can enable an auto-invest strategy to invest in loans from the secondary market.
I’m starting to experiment with this, trying to invest in loans with a yield to maturity (YTM) of over 15% to boost my overall interest income.
I start with small amounts of investment through this auto-invest strategy to try it out and see what happens.
You can also manually invest in the secondary market, just as you can invest in the primary market. If you select the loans matching your preferences, you can click ‘Invest’ and have them.
If you’re filtering on loans with a discount on the secondary marketplace, you can get your rate of return even higher.
Mintos Loan Originator Risk Rating
Mintos has its risk rating system, which offers transparency about the risks you are facing with each loan originator. It’s a great tool to manage your risk using your risk rating.
Mintos determines the risk based on:
- 40% loan portfolio performance
- 25% loan servicer efficiency
- 25% buyback strength
- 10% cooperation structure
They review these ratings every year unless there is a need for an earlier check or update.
The risk rating system of Mintos is a unique feature, as they are one of the few P2P platforms in Europe offering this service. I love this because it gives you a quick insight into the risk of certain loan originators. You can deselect the ones that are too high- or low-risk for you.
It’s easy, you don’t have to put in all your own time, and you can select the risk you want. Just how I like it!
They have low risk (8 to 10), moderate risk (5 to 7), higher risk (1 to 4). Besides that, they also have Suspended (S) Defaulted (D).
Suspended indicates that all activities on the Mintos platform are stopped until the issue with the loan originator is resolved.
For the defaulted companies, their activity is permanently stopped on the Mintos primary and secondary marketplace.
I only invest in loan originators ranked between 7 and 10, which gives me low to moderate risk.
Mintos Invest & Access
In 2019 Mintos introduced Invest & Access to their platform. It is a new way of investing that is working and the current auto-invest function of their platform.
Mintos Invest & Access invests automatically for you, considering diversification among loan originators and loan terms. This function lets you quickly buy new loans or sell your loans once you want to cash out.
If you want to go more into that, there is a whole separate post where I describe everything related to Mintos Invest & Access.
Risks When Investing In Mintos
Investing always comes with a risk, regardless of which asset category you’re investing in. I currently have around 5-10% of my net worth invested in P2P lending, and that’s about as much as I want to invest.
I don’t want to put all of my eggs into one basket – one day, the basket drops, and all my eggs are broken. I’m investing in different income-producing assets to build my very own money-making machine.
Here are the biggest risks when investing with Mintos:
- Loan originator goes bankrupt: in this case, you risk losing your investments at this loan originator. Of course, Mintos tries to get as much money back as possible, but no guarantees. This can be managed by checking the loan originators really well before investing with them.
- Cash drag: this means that not all your money is invested. Because Mintos provides such great liquidity for their website, I have not been a problem until now. You can buy thousands of investments in 5 minutes and sell all of them 5 minutes later with no problem.
The problem can still arise when there are more P2P platforms than loan originators. At the moment, we’re good because Mintos is the biggest platform in P2P lending in Europe with great liquidity.
- Financial crises: in this case, we don’t really know what will happen. Mintos has weathered the recent crisis in early 2020 very well. There were no significant delays in my portfolio. Of course, this isn’t a guarantee for the future.
- The borrower can’t repay the loan: in this case, the money-back guarantee covers the loan. I invest only in loans that have a buyback guarantee, so that risk can be eliminated easily.
Of course, these are all sound reasons, but I’m not trying to scare you away.
I wouldn’t put my own money in P2P lending if I didn’t believe the rewards outweigh the risk. I just want to make you aware of the risks that you will potentially be taking.
Aside from that, I believe that if you can’t miss the money, you shouldn’t invest it.
Quick Summary: Pros And Cons Of Mintos
If you have read until here, or you just jumped in, chances are you want a quick overview of the pros and cons of investing with Mintos.
Pros Of Mintos
- Buyback guarantee on most loans, protecting you from borrower bankruptcy (you can select buyback guarantee when selecting loans).
- Amazing platform with many options, like auto investing, primary market, secondary market, and currency exchange.
- Great average returns of 12.42%
- Big variety of loans, countries, loan originators, and currencies – making it easy to diversify.
- Credit rating list of all loan originators, with information about the financials.
- Growing quickly and consistently, offering new functionalities and more loan originators.
- The secondary market where you can sell your loans within minutes.
Cons Of Mintos:
- Once you have a loan that you no longer want, it can be hard to sell without a loss. Depending on how many loans are offered in the secondary market, you may need to have good terms in order to sell.
- You have to manually adjust auto-invest strategies when new countries or loan originators become available.
The advantages far outweigh the disadvantages for me. But I am not giving you any financial advice here, so please do your own research and make sure that Mintos fits your current situation.
Diversifying your investments with different platforms can be a good decision since the peer-to-peer lending market is relatively new and there is little regulation.
Currently, Mintos is the biggest and one of the best platforms in Europe, but other platforms are competing with Mintos and delivering results. It would be worth looking into other platforms to diversify your investments.
My current favorite platforms are:
- Fundrise. You only need $10 to set up your portfolio. Check the full Fundrise review for more details.
- EstateGuru. (7.78% average return) Read our full EstateGuru review for more crowdfunding information.
My Results With Mintos
I currently have 161 loan investments that will yield me a net annual return of 12.24%. This is a rate I’m more than happy with, compared to what other investment options are currently making. I could make higher returns, but this is the maximum risk-return trade-off for me at this moment.
The risks with peer-to-peer lending are much higher than putting this money into a bank account, but the return also considers this additional risk.
My loans are pretty well diversified among interest rates, loan terms, and loan originators. I’m diversifying so that I’m not putting all of my eggs into one basket.
As you can see, my current loans have a weighted average interest rate of 12.24%.
These are great returns considering that they are all backed up by a buyback guarantee, and they’re issued with the biggest Peer-to-Peer platform in Europe!
Frequently Asked Questions – Mintos Review
Now that you know the facts about Mintos let’s answer some of the frequently asked questions that will help you invest in Mintos. Maybe this will help you decide easier if this is the right decision for you.
Is Mintos Safe To Invest?
Mintos is safe and legit as this is one of the biggest P2P platforms in Europe. It even has a buyback guarantee feature. Mintos is not guaranteeing high returns in your portfolio, and as we all know, investments have their risks. But Mintos is assuring its clients that their platforms are safe and funds are secure.
Is Mintos Free Of Charge?
Yes, Mintos is free. They don’t collect fees for opening an account, depositing, and withdrawing. This is great since it helps you maximize your profits and lessens your losses!
Fees do only apply in currency conversion and selling on the Secondary Market.
Who Can Invest In Mintos?
There are certain requirements for you to open an account in Mintos.
- Individual investors must be 18 years old.
- Have a bank account in the European Union.
- After filling up the form, Mintos will verify your identity.
How Much Can You Earn When You Invest In Mintos?
Mintos has an average annual return of above 12%. This is one of the best opportunities to diversify and enhance your portfolio in the whole P2P lending industry. And this is beneficial for both new and old investors alike. You may check this average annual return rate from time to time to see the updated current interest rate.
Conclusion For Mintos Review
This article may have taken longer than usual to read, but there is just so much to tell about Mintos.
As you might have noticed during the article, I’m very happy with my experiences and investments with Mintos so far.
The platform is great to use, the returns are far better than other ways of investment, and there are many diversification options.
There is still room for improvement on the Mintos platform, but I feel comfortable with the risk-return ratio at Mintos. Personally, I keep around 10% of my net worth invested in P2P lending platforms to balance my risk and get the great returns they currently pay. This is not financial advice, as you still need to do your own research if this platform suits you and your financial plans.
Mintos is a big part of my P2P portfolio, and I do not plan on changing that in the near future. Mintos performs great up until now, and I am very satisfied with the returns so far.
All in all, I highly recommend Mintos as a peer-to-peer lending platform, and if you’ve not tried Mintos, you can do so here:
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Have you tried Mintos? How do you like it?