Mintos Strategy – how to create your strategy

In order to create your own strategy on how to invest in loans on Mintos, you basically have to answer only two questions:

  • What is your investment horizon?
  • What is your risk appetite?

From your answers, the rest will follow. Let’s assume that you can have three choices to answer each of these questions:

  • What is your investment horizon?
    • Short (less than 12 months)
    • Medium (12-24 months)
    • Long (24 months and more)
  • What is your risk appetite?
    • Low – Losing money is not acceptable
    • Medium – I am ok losing some of the money
    • High – I am crazy

In the text below I will assume that rating provided by Mintos for the loan originators is useful and actually correlates with the chance the lender will default. Also, only current EUR loans are being considered, however you can re-apply this to other currency.

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Reporting on Mintos portfolio performance

Are you interested in reporting of performance for your investments on Mintos? You will quickly realize that Mintos makes it quite difficult to understand on what loans you made good profit and where not so much. This is much more painful when you invested higher amount of your money and have few thousands of individual investments running. In such case it is worth spending some more time and analyze the data.

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Does country of the loan matter?

There are many companies on Mintos offering EUR loans with buyback guarantee. The loans are provided in 10 different countries. Should you care about where you are putting your money? See the current statistic for loans on the primary market by country:

CountryLoansInv Amount (EUR)
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Short-Term Loans on Mintos

There are a lot of investment opportunities for short-term loans on Mintos. Right now, the top providers in terms of size are Varks, Kuki, Cashwagon, Simbo, Bino, Dinero, and Tengo. You can get up to 14% on loans whose duration is less than 3 months.

Note: the below is only for loans in EUR that are current and have buyback guarantee.

While the interest you can earn is great, you also need to consider the quality of individual lenders to determine whether it is good idea.

Ready to invest? Use this promo link to get up to 250 EUR on your invested balance!

Varks – Overview

Varks offers short term loans on Mintos. You can get up to 14% interest rate on EUR loans with buyback guarantee. This is on the top of what is currently available on Mintos. Varks offers currently only short-term loans (< 3 months). All loans are provided in Armenia.

Loans offered by Varks
Loans offered by Varks

You cannot get much information from the information available on Mintos. While rating is currently B, the company has only two years of history. The key people have relevant experience, that is the case for CEO, CFO, and COO. If you look at all the other people working at Varks on LinkedIn, you can see that the company has somewhat relevant structure. I am somewhat surprised how few people are there with focus on data analysis and credit risk management. Maybe, the short-term loan business in Armenia is just about charging extremely high APR and live with high credit losses.

Ready to invest? Use this promo link to get up to 250 EUR on your invested balance!

Interest Calculation – Varks

For each loan Mintos will show the interest rate that is applied on the loan amount. Let’s take this loan as an example:

  • Loan amount: EUR 310.63
  • Interest rate: 14% (p.a.)
  • Initial term: 14d. (days)

In the payment schedule we can see that payment total should be 312.32 EUR, consisting of 310.63 EUR principal and 1.69 EUR interest. So how we can calculate the interest rate? It is quite simple:

Interest (EUR) = Loan amount * Interest Rate * (Initial Term / 360)

Therefore we get: 1.69 = 310.63 * 0.14 * (14 / 360)

Why there is 360? As it looks like, Varks (and actually most loan originators on Mintos) is using Actual/360 method to calculate interest. Because of this we assume that each year has exactly 360 days and the interest amount is calculated based on real duration.

Let us know if the calculation is wrong or not clear.

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Mintos Overview

Mintos is the largest P2P platform where EU citizens can invest. As of 1/2019 there are 264,532 loans available on the primary market and 198,290 loans on the secondary market.

Vast majority of loans if offered in EUR. Unless you have some savings in different currencies or know how to deal with FX risks I would recommend to invest into EUR loans only. Your strategy will be easier to maintain, monitor, and your portfolio will be very likely better diversified.

CurrencyLoansFor InvestmentAvg IR

In 2018, investors put 1.5BN EUR in investments on Mintos marketplace:

Mintos - loans funded and total investmens.
Loans funded on Mintos and total Investments. Source: Mintos

Number of investors on Mintos is growing fast as well. On average, more than 5,000 new investors joined every month over last year:

Mintos – new users per month.