Here you will find all information you need to start successfully on Mintos P2P platform. If you are unsure about investing on Mintos, read the 7+ Reasons to Start Investing on Mintos.
What is Peer to Peer Lending
Peer to peer lending is and idea where people lend money directly to other people, skipping the middle man. For centuries, banks played this role. Several years ago first P2P platforms emerged where individual investors were able to invest in individual loans. Once enough investors will put together the loan amount, loan is provided to the customer.
Mintos takes the whole concept a step further. Mintos aggregates financial institutions (providers of personal loans, short term loans, or car loans for example) and presents loans these companies issued for investment to individual investors. This approach is more closer to securitization of receivables, because the loan is already provided to the customer by the time you invest in it.
Mintos provides retail investors with an easy and transparent way to invest in loans. Several tens of alternative lending companies around the world offer investment through Mintos. Since launching in 2015, Mintos has exponential growth and has become the world’s largest marketplace of its kind.
At the beginning of 2019, there are more than 200,000 loans available for investment on primary market. Additional 200,000 is available on secondary market. You can invest in EUR and several other currencies. Finally, Mintos does not charge any fees whatsoever to investors!
Key Mintos Numbers
These are the key statistics from first week of 2019:
- 58 loan originators,
- 28 countries of loan originators,
- 70 countries of investors,
- EUR 31.8 million of interest paid to investors,
- 101 673 investors on Mintos,
- 7 languages,
- 62 people in the Mintos team,
- EUR 264 million outstanding investment,
- EUR 1.52 billion total investment in loans.
Register on Mintos
As a first step you need to register on Mintos. The smart way to go about that is to follow promotional links that are offered on the web. This way you get additional 1% bonus on your investment. This will give nice additional boost to your interest income.
Use this promotional link to get to Mintos promotion page which currently looks like this:
After you click on “Get started”, you will see the registration form:
In the first part you fill out basic contact information. I strongly suggest to fill out true information. You should handle it as any other investment and make sure that information associated with your money is correct and updated.
In the second part of the form you need to choose password and confirm that you are not robot. At the end, there are two check boxes where you have to consent with User Agreement. Optionally, you can sign up for Mintos news as well, which I highly recommend:
Once done, just click Register and you are done!
Right after you login you will be on the overview page. This chapter explains what you see on this page and what it means.
The account balance is the total sum of funds that you owe. In other words, if you sell all your investments and add funds not invested, this is your account balance. Available funds are money that are not invested yet. This money is sitting on your account and making you no revenues.
Net Annual Return
The net annual return box will summarize your performance so far on Mintos. While overall the numbers are valid, the information value of aggregated numbers is limited:
Net annual return percentage will approximately tell you what is the interest yield you make on Mintos. While it is good indication of the performance I suggest to consider using different metrics which are discussed in the portfolio monitoring section of this ultimate Mintos guide.
Interest is pretty obvious and represent the amount you earned on your investment. This amount is really paid and does not include accrued but unpaid interest. For some investments you might receive late payment fees collected from borrowers, but it is rather rare. Bad debt you should likely not see at all as long as you are investing exclusively in loans with buyback guarantee.
Secondary market transactions represent the sum of premiums you paid to purchase loans on secondary market or premiums you received by selling your loans on secondary market. In the opposite way, it includes discounts you received for purchasing loans on secondary market for less than par value and costs incurred by selling loans for less then par value.
Campaign rewards represent the additional bonuses you might get by joining promotional campaigns that are from time to time run by Mintos.
Total profit is a cash flow view on your positive and negative income streams that do not include the invested amount. The following equation should always work:
Account Balance = Incoming Fund Transfers + Total Profit – Outgoing Fund Transfers
My investments presents high level summary of loans you invested in:
You will see your investments by delinquency status. If you invest in loans with buyback guarantee (and I strongly recommend you do), you will not see any loans that are 60+ days past due date, in default, or are bad debt. For completeness, it is worth explaining difference between default and bad debt. When loan defaults, the full outstanding balance of the loan becomes due. Even when this happens, there is still a chance the loan amount will be recovered. Bad debt represents amounts that will not be recovered from borrowers – this amount is lost forever and will be deducted from your balance.
In order to start investing you first need to send some money to your investment account on Mintos.
Understanding Mintos Transfer
I will explain how to find supported payment methods for EUR currencies below. In order to start, login on Mintos and click on Deposit / Withdraw / FX:
On the next screen, click on the currency in which you would like to make deposit. Since majority of the investment opportunities is in EUR, I will explain the process for EUR currency:
Preferably, you want to send the money in the same currency as you indicate here, otherwise you are risking return of the payment or bad exchange rate from your bank. Mintos is saying on this: “What will happen if I send currency different from the currency in my bank account?Money will convert automatically according to the currency exchange rate of the respective bank (Mintos does not know that rate), or it will be returned to the sender. “.
Mintos will show you the list of ways you can deposit EUR:
If you have your account in EUR than there is no issue and you can use Trustly to do direct transfer immediately or standard transfer to LHV bank Mintos is using. To get the payment details you can click on the LHV logo. For me it looks like this:
Note that the investor number you will see will be different than I have. You have to provide your investor number (number where there are XXs in the picture) in the payment detail of the transfer so that Mintos can identify the funds correctly.
In case you don’t (I don’t have EUR account either) you are better of by using one of the services that will do the currency conversion for you. I am using TransferWise and have a good experience with this provider.
TransferWise – Send Money to Mintos
I will not cover how to register on TransferWise as that is really easy. Once you are registred and logged-in, click on “Send Money”:
On the next page you can configure how much you would like to send in what currency and what should be the final currency. In this example I would like to send 1,000 GBP and convert it to EUR:
Note that TransferWise will automatically calculate the fees and how much the recipient (in this case Mintos) gets. Unless you are in big hurry, keep the “Low cost transfer” option as the fees will be lower. Click on “Continue”.
Now, you have to properly set Mintos as recipient. Click on “Someone Else”:
You will need to fill out the form with the details on Mintos bank account. This will be the details you can see in your Mintos account when you click on LHV:
Once you are done, click on “Confirm”. The review page will show you all the details for the transaction. You will need to add “Reference for Mintos”. This is you “Payment Details” info from Mintos account. It will be a number followed by “- Investor”:
When you added reference for Mintos, click on “Confirm and continue”. The last step is to actually send the money. TransferWise will show you the list of banks that are available for immediate transfer. If you don’t want to use TransferWise immediately, you can send the money through your branch or via online banking.
After you click on “Continue to payment” you will see list of banks available in your country:
If you select “All other banks” and then “I will pay in branch”, you will see all the transfer details for your payment in GPB to TransferWise. The below is an example, do not use this specific numbers.
Note that you will need to use the reference number when you will be making payment from your bank to TransferWise. This is NOT your investment number from Mintos! This is reference for TransferWise to match incoming payment with your request.
You do not have to send the payment immediately. You can also always change the payment method to something else or cancel the transfer altogether before you make the payment.
Primary Market vs Secondary Market
When you click on loan listings, you will by default end up on the primary market. What it means? On the primary market, there are investments that are offered directly from loan originators through Mintos to you. On the secondary market, you are buying investments someone else bought before you. If you buy an investment, there might be several reasons why you might want to sell it:
- you need money now
- there is a better investment opportunity, e.g. higher interest rates on primary market
- you want to improve diversification of your portfolio by selling investments where you are over-exposed
I highly recommend to stay on the primary market until you gain experience. While investing on secondary market can be profitable, it is rarely significantly better than primary market. Also note, that on the secondary market investments can be sold at discount/premium, further complicating things.
On the left side you will find many filters you can use to find the loans you want to invest in. The filters on the left include: currency, loan type, country, loan originator, buyback guarantee, borrower apr, status, investment structure, amortization method, issue date, listing date, amount available for investment, initial ltv, ltv, loan ID, my investments. On the top you can also see sliders for interest rate and term. Let’s discuss individual filters separately.
As of early 2019, 86% of loans are offered in EUR. EUR investments are offered by 43 loan originators. The second most common currency is RUB with 7% share, followed by KZT with 2% share. From this it is quite obvious that investing in EUR will give the biggest potential for both diversification. You can achieve good returns with other currencies as well, but at the cost of limited investments selection and almost impossible diversification.
While there is a lot of loan types listed, only four have more than 1% share on total number of loans. These are: Short term loan (51%), personal loan (41%), car loan (5%), and invoice financing (1%). If you are new to the financial world, you might wonder what these loans are:
- short term loan: loans with duration from 7 days to approximately 2 months; these loans are typical by charging high APR to consumers
- personal loans: unsecured personal loans with term from 3 to 80 months
- car loans: loans secured with vehicle – if borrower does not pay the loan, the loan originator can repossess the car and sell it in order to cover the unpaid part of the loan. LTV (loan-to-value) is important here as it shows the level of security the loan originator has should the borrower default. As an example, if the car value is 10,000 EUR and the loan is 7,000 EUR, LTV will be 70%.
You can choose from 25 different countries where investments are currently offered in. The preferences will depend on your investment profile, one of the approaches is to check for the credit rating of countries you want/don’t want to invest in on Wikipedia or similar website.
Loan originator is a company that provides their loans on Mintos marketplace for investment.
Mintos rating represents the evaluation of loan originator. The methodology is defined by Mintos. You can read more details on the methodology on Mintos website, the below are the grades sorted from Best to Worst:
Buyback guarantee is one of the most important filters. It has only two options: yes and no. If you check “yes”, you will see only loans with buyback guarantee. This means, that you will get back all your principal and accrued interest even when the borrower defaults. The buyback guarantee triggers when the loan is 60 days past due latest. Many loan originators will however re-buy the investment back sooner.
Are you asking how this is possible? You can read very good explanation in the blog post on Mintos. The short answer is that loan originators offering buyback guarantee can still make profit by increasing the margin on interest rate they charge to the customers. This increase paid by customers who repay loans successfully needs to cover bad debt and accrued interest for customers who default.
Personally, I would not invest in loans without buyback guarantee? Why? I don’t think that given number of loan originators, countries, and limited data provided by Mintos you can make good call on the risk of the customer. It might work when you focus on manual investment and single loan type. With automated investing and hundreds or thousands of invested loans, I don’t think that going without buyback guarantee is an option.
This is the interest rate charged by loan originator to the borrower.
Status of the loan is important. Generally I recommend to invest only into loans that are current. This is because there is a difference in how companies charge interest for loans that are past due. While some companies will calculate interest also for the period of time the loan is past due, others will not. In such cases, it can happen that you will invest in a loan for 30 days, but will not get any interest. The statuses are as follows:
- Current – no installment was due yet or all installments paid
- Grace Period – varying number of days (defined by each originator specifically) that accounts for system delays, holidays; this is also sometimes called technical delinquency as the borrower might have paid and we are waiting for the funds.
- 1-15 Days Late
- 16-30 Days Late
- 31-60 Days Late
- 60+ Days Late – if you invest in loans with buyback guarantee, you should not see such loans. Buyback guarantee triggers at 60 days latest and the only loans with 60+ days late will be those without buyback guarantee or loans where the loan originator defaulted and is not able to honor the buyback guarantee (yes, this has happened already with one loan originator)
There are two types of investment structures that are used, direct and indirect.. The direct structure means you are buying a claim against the borrower directly. The indirect structure means that you obtain exposure to a loan by investing in a loan issued by a Mintos group company to the respective loan originator, where repayments depend on the borrower’s payments.
Date when the loan was opened, provided to the customer.
Date when loan was listed on Mintos. Note that this can be at later date than issue date.
Amount Available for Investment
Amount that is left for investors. This is different than loan amount as other investors could already invest in the loan.
Initial LTV, LTV
LTV stands for loan-to-value. As an example, if the car value is 10,000 EUR and the loan is 7,000 EUR, LTV will be 70%. In context of Mintos it makes sense only for secured loans (car loans, mortgages, and some business loans). Initial LTV is loan-to-value calculated when loan was issued. LTV is current loan-to-value ratio. This ratio is different from the initial LTV because of too reasons. As loan is repaid, loan-to-value decreases. On the other hand, the collateral (e.g. car) loses value over time making the loan-to-value higher. As a result, LTV can be both higher and lower compared to initial LTV.
Loan ID as provided by Mintos.
You have the option to either exclude or include loans where you already invested in. It is generally good practice to exclude your existing investments. If you don’t do so, you might over-expose yourself to some loans.
Buying Loans Manually
After you login, go to “Loan Listings” page:
On the loan listings page you will see all loans that are currently available for investment:
Let’s explain the basic components of this page.
Interest Rate Filter (1)
You can filter interest rate from lowest possible value up to maximum that is above 20%. I suggest to work with minimum only. If someone is willing to give you 20%+ you should definitely consider it.
Term Filter (2)
Term represents the duration of the loan in months. It goes all the way up to 72+ months. You will need to choose your maximum term based on your risk appetite and strategy, there is not significantly higher interest for longer terms. Therefore, I suggest that you keep this at 48 months by default. I personally don’t invest into loans longer than 24 months.
Additional Filters (3)
In section with additional filters you can tweak your selection precisely. At a minimum you will likely want to set the following:
- Currency: I suggest investing in EUR as offers in other currencies are limited
- Buyback guarantee: Choose “Yes”, see in the “Basic Terms” chapter for buyback guarantee is.
- Status: Unless you are experienced choose only loans that are Current
- Mintos Rating: Never invest in loans where loan originator has rating of D. I am personally trying to avoid C/C- as well with the exception of short term loans.
List of Loans for Download (4)
You can download the current selection as an excel file if you prefer to analyze the data in tool of your choice. From time to time I keep all the filters empty and download all loans on primary market so that I can see whether I should adjust my strategy.
Header for Individual Loans (5)
Note that all the headers are clickable and you can sort your list by each of the attributes in ascending or descending way.
Number of Filtered Loans (6)
Here you can see how many loans are currently matching your selection criteria.
Loan Details (7)
Basic attributes for loans that are matching your selection criteria. If you click on the loan ID you will get to the detail page for that particular loan.
Investment in Individual Loan (8)
If you click on the “Invest” button for individual loan, you will see the following:
The default value will be 25 EUR and you can change it to anything that is between 10 EUR and amount that is available for investment (given you have sufficient funds). Once you hit the blue approval icon, the investment will move to your approval queue. At the top of the page you will see this:
Either you can click immediately on “Review and Approve” or you can keep browsing the loans. Once ready, you can always go to the review queue by clicking on the bag icon top right.
When you visit the review page, you will see investments you added. There is an option to change investment into individual loans as well as removing individual or all investments.
Once you are happy with your choices, click “Confirm” and the investment is done.
Invest in All Selected Loans (9)
The button “Invest in All” allows you to invest in all loans that are visible on current page. You are not investing in all loans that are matching your criteria, just in those that are shown on the first page of results. Once you click on the button you will be able to set amount for investment in each loan:
Then the process is the same as for investment in single loan.
My Filters (10)
My Filters is a place where you can save your own filters. After you set your filters, click on the “My Filters” link and you will see this:
Click on “Save New”, enter name for your filter and hit enter or click on the checkbox. Now your filter is saved. When you click on “My Filters” next time you will see your filter listed here:
You can click on the filter link (in picture above the filter is named Test) and the selection criteria will be automatically applied. Eventually, you can remove the filter by clicking on the small “x” icon which is right to the filter name.
Selected Filters (11)
This will show all the filters you currently applied, providing nice overview of your selection. You can remove each particular filter condition by clicking on the small “x” icon visible on the right of each filter.
Create Auto Invest Strategy (12)
If you are happy with your filters but you don’t want to invest manually, you can create auto invest strategy right from this screen. Click on the “Create Auto Invest portfolio” and you will get to the auto invest strategy editor. To understand Auto Invest strategies, go to chapter Auto Invest in this ultimate guide to Mintos.
How to Create Auto Invest on Mintos
This step by step guide will explain how to create your first auto invest strategy on Mintos.
First, navigate to the auto invest page on Mintos:
On the auto invest page you will see strategies you created. Also, there is a button to create new strategy. Click on it to create one:
On the next page you can decide between pre-defined Mintos strategies and custom strategy. Click on “Custom Strategy”:
This will bring you to main editor of strategy:
First, you need to select the currency. I have only one which is pre-selected and so I invest in EUR. Next, choose between strategy for primary and secondary market. I recommend starting with primary one as secondary market has some specifics.
Then, you can select combination of multiple filters for your investments:
- Loan Originator
- Loan Type
- Buyback Guranatee
I always start with buyback guarantee. Save yourself some pain and always start by selection “Yes” for this option. Click on the small arrow next to “Buyback Guarantee” and un-check “No”. You will end up with:
The other filter I recommend using is the rating. Especially when you are just starting out, filter out loan originators that have below average rating, B-, C+, C, D. There will still be plenty investments left:
Auto Invest – Lender Details
If you want (and you don’t have to) you can adjust configuration for individual lenders as well. By clicking on the small arrow on the right side of each lender’s name, you will see additional configuration. Example below:
You can filter for remaining principal, loan status, investment structure. Also available are amortization method, issue date, listing date and borrower APR. I personally found little use for these. Note that loan status is pre-selected for “Current” automatically. Very likely you don’t want to invest in past due loans. It can be profitable, but only in specific cases.
Interest Rate and Term Selection
Below the list of originators, you will have the possibility to choose range of interest rates and terms you want to invest in:
The exact configuration depends on your investment strategy, however you should follow at least few guidelines:
- always restrict the maximum term – you will not get any higher interest when you invest in loans for 84 months
- do not restrict interest rate and set only minimum; if someone is willing to pay 20% (unlikely), then go for it
General Information About Portfolio
The last section of auto invest configuration looks like this:
General information about your portfolio
First, provide some descriptive name. In portfolio size, enter to maximum amount that can be invested in this strategy. This is investment outstanding amount so new investments can be added as old will be repaid. Do not start with 100% of your available funds if you are doing this for the first time!
Investment in one loan has lower and upper bound. The minimum you can set is 10 EUR and I recommend setting 10 EUR as maximum as well. On the right side you have three choices to make:
- reinvest – go for yes as this will allow your money to work continuously
- include loans already invested in – choose no so that you can maximize the number of loans you are invested in
- diversify across loan originators – I personally choose no, but here you need to make your own decision; not however that diversification does not work across multiple auto invest strategies. You always need to control for diversification on the entire portfolio level, not per strategy.
After you check acceptance of the terms and conditions you are good to hit “Save and Activate”. This will make your strategy active immediately. You can also only save the strategy (and not activate it) by clicking on the “Save” button.
Edit and Sort Auto Invest Strategies
On your auto invest page you will see list of strategies you created:
If you hover over the number in priority column, you can move the strategy up or down. If needed, you can stop the strategy (deactivate it) by clicking on “Stop” link. The strategy will then not invest in any new loans. The “Edit” link will bring you to the same strategy editor discussed above. Finally, the “Delete” button will permanently remove the strategy from the list. Note, that investments in that strategy will not bee removed or sold. Everything that was invested in through deleted auto invest strategy will still remain in your portfolio.
Set the limit of minimum funds in the account
On the page with list of auto invest strategies you also have the option to set the minimum amount of funds that you would like to keep available in the account:
This comes handy when you invest manually as well as using auto invest. From time to time I will use this feature to test new lenders. I will handpick the loans that are representative of my future intended auto invest strategy. Once I see the first result I will set the limit again to 0 and create automated strategy.
What not to do
Do NOT Use Mintos Investment Strategies
Do NOT use the pre-defined Mintos investment strategies. While these strategies might be a little bit more diversified across more lenders, it will generally provide your with lower interest gains. Mintos offers wide spread of interest rates (even for EUR loans with buyback guarantee). The pre-defined auto-invest strategies will use also loans with lower interests. Do you really want to invest in a loan for 7% when there is another available with 12% interest rate from lender with comparable risk?
I honestly don’t see a reason why you would ever want to use any of these strategies. Manual investment or simple auto invest strategy will be better fo you.
What to do
There is a lot of configuration options for auto invest. As a result, it is quite easy to make a mistake. Until you will learn all the details, test your strategies. Use small amount of funds available as limit and let the strategy run for few days. You will quickly see whether you get really the investments you wanted.
Invest Minimum Amounts (Almost Always)
There is really not any reason to invest more than the minimum. This is currently 10 EUR. Minimum investments will allow to invest more loans, decrease variability of returns and learn more from finished investments.
I generally not suggest to invest more than the minimum in any single loan. There are three reasons:
- With lower investment, you will have more loans which allows you to diversify better
- With more loans invested in, you will learn more. It is not possible to re-create all historical data from what is provided by Mintos. If you built your own history, you will be able to see whether there are any gaps in your investment portfolio.
- There is variability in what you think you will get and what you get. Despite the fact that Mintos says 10% you can end up earning 9% or 4%. This is largely driven by buyback strategies each lender has and difficult to influence by different strategy. With more loans, the average performance will be however closer to the stated interest rate.
There is an exception to this. At times, Mintos does not have very great selection of loans with higher interest rates. As an example, it might be that there is only 100EUR worth of loans with 13% interest. In such case, I ignore this minimum investment rule and prefer to maximize my interest revenue.
Sort strategies wisely – although Mintos does not share how it allocates investments to individual investors, we know that Mintos evaluates strategies with higher priorities first.
Only when no loans are available or limit of the strategy is achieved, next auto invest strategy is comes into considerations. As an example,take two lenders with the same risk and same terms of loans. You would like to have the one with higher interest rate in the auto invest strategy with higher priority.
Check Auto Invest Strategies Weekly
I recommend that you check your auto invest strategy at least once every week. There are several things you need to look for. Are new loans still being booked? It might be the case that you utilized the full limit of your strategy. Do you want to increase it?
Maybe the interest rate or terms offered on Mintos changed and your strategy is not getting any new loans. In that case you may want to adjust the strategy or create new one.
Is the return you are getting what you expected? The buyback strategies of lenders can effect the real interest you get. I highly recommend that you analyze finished loans to understand whether you are really making what Mintos promised. You can see statistics for my portfolio here.
Are there better options? Sometimes, Mintos marketplace will offer higher interest rates for the same term of from lenders with lower risk. In this case you want to adjust your auto invest strategy so that you are still making maximum possible with reasonable risk.
Auto Invest Q&A
Will Auto Invest use more money than I have available?
Never! Any auto invest strategy will only use the funds you have available. You don’t have to worry about investing more than you want
Can I delete strategy safely?
Deletion of strategy will not trigger anything. No investments will be sold, no movement of any funds. The only thing you will loose is the possibility to see what current investments are from which auto investment strategy.
Is Auto Invest Dangerous?
The only dangerous thing is incorrect configuration. If you double check your configuration and follow guide in this article, auto invest is safe. Note however, that investments made through auto invest are not reversible.
In order to fully understand investing on Mintos, it is very helpful to understand how exactly interest rate is calculated. I will first explain how it works for short-term loans with single payment before going to loans with multiple installments
Interest Rate on Short Term Loans
Short term loans are easier to start with as there is only single payment. To calculate interest amount on a loan, you need to know three things: loan amount, interest rate, and term. Let’s take the below as an example:
- Loan amount: EUR 200
- Interest rate: 14%
- Initial term: 14d. (days)
Interest rate calculation is then simple and follows this formula:
Interest (EUR) = Loan amount * Interest Rate * (Initial Term / 360)
For our case the Interest (EUR) = 200 * 14% * (14 / 360). While the first part of loan amount times interest rate seems obvious, many are confused about the second part. First, since the loan is provided for 14 days only, we will not get 14% from 200 EUR, but only part that corresponds to the term. That is why we need to adjust the interest amount for only portion of the year. Well, why it is then 14/360 and not 14/365 to adjust for calendar year? Many financial institutions, including lenders on Mintos are using fixed 360 days instead of using true number of calendar days in year. This is merely a convention that simplifies the calculations a little.
How to Get Help on Mintos
Whenever you go to Mintos site you will see the small floating “Help” button on the bottom right side of every page:
When you click on it, you will be able to write a message to Mintos support:
You can also attach files to the message if you want. Once you hit send, you will receive a confirmation email. Typically, Mintos will get back to you within few days.