Today, I would like to discuss about a platform that I find really interesting, known as “Mintos” (Click here to discover the website). Indeed, as explained in our article “A bit of personal finance”, it is important to dedicate a portion of your money to the creation of “passive” income. The Mintos platform is able to generate such incomes; to leave your money work for you even when you sleep and that’s the point. Added to that, this platform allow you to leverage the power of compound interest (as explained in the article “The beauty of compound interests”).
The Mintos website is a “peer-to-peer lending” platform.
For information : the peer-to-peer lending corresponds to the activity of lending money to private individuals or companies through the internet and avoid to use banks which allows more attractive rates. However, the risks associated with such investments are more significant as they are not supported by government guarantee.
As a general introduction, Mintos is a company located in Latvia which has been launched in 2015 and is in charge of linking loan originators with investors. The main mission of the company is to ensure a free and efficient movement of the capital. On Mintos, it is possible to invest on different types of loan out of different loan originators. The most interesting part is that it is free to invest on Mintos, there is no costs. It is possible to invest in different currencies and start small. Besides, the platform announces a net annual return of 11.73% for the investors.
Experience and opinion
Configuration of Mintos
As far as I’m concerned, I started to invest on Mintos a couple of month ago. I started by injecting 10 EUR on my account to ensure that the money was effectively transferred to my account. Since then, I regularly inject money on the website still keeping in mind that this money is at risk.
First of all, the main interest of Mintos is the “Auto invest” function which allow the investors to let the website automatically manage their money based on a couple of criteria established beforehand. Indeed, in order to configure that automatic portfolio, you have a couple of filters :
- The loan originators that you wish to work with
- Their risk grades
- The type of loan (Car credit, mortgage credit, etc.)
- The countries from which the loan are contracted
- Buyback guarantee
With regard to the “Buyback guarantee”, it is also an advantage of Mintos which allows that in the case of default from the borrowers (after 60 days late), the loan originator reimburse the loan to the investors with interests ! My advice would be to only select the loans with this guarantee which would greatly reduce the risk.
Then, you can set up some additional parameters :
- Range of rates that you are ready to accept.
- Desired duration of the loans
- Amount to be invested by loan
- Whether the amounts repaid should be reinvested (I highly recommend you to accept this in order to take advantage of the compound interest)
- The desired diversification
You could also select yourself the loans that you wish to invest in. However this approach will be more time consuming. As far as I am concerned, I highly preferred an automatic process.
On the whole, I did not find any issue in the usage of Mintos. I sometimes noticed that the reimbursement and interests received was not directly reinvested but this was linked to a configuration issue (for example, when there is no more loan meeting the criteria left). The amount of overdue is significant but do not bring any additional concern thanks to the buyback guarantee. I personally got an annual net return of 10,23%.
I am fully satisfied with this website and will keep on investing a portion of my revenues which will keep on growing without additional work needed. The rates are not that important but, compared with the saving rated offered by the banks, it is quite interesting to use that solution.