When it comes to P2P lending platforms in Europe, you have more options than ever. Thinking about using the Bondora platform for P2P lending? Wondering if it’s right for you? Take a look at our Bondora review now, and find out.
What is Bondora? A brief company overview
Bondora is based in Tallinn, Estonia. It was first founded in 2007, which makes it one of the oldest P2P lending platforms in operation today. It accepts investors from a huge number of regions, including the UK, all European Union countries, Hong Kong, India, China and more. Since it was founded, it has attracted a total of more than 72,061 investors. It has financed more than €245 million in loans. It has paid out more than €30 million in interest to investors.
It offers loans to customers in Finland, Spain, and Estonia. Overall, it’s a highly reputable company. Also, it offers support for a wide variety of languages on its website. It’s easy to use no matter where you are in the world. It’s a good option if you live outside of Europe and want to invest in European loans.
Bondora returns: Pick your preferred risk (and returns!)
Bondora has high returns for most of its loans since it focuses on unsecured consumer loans. This means that you can get loan returns of between 9.56%-17.56%. The average reported return rate on loans at Bondora is 10.70%. This is much higher than most other P2P platforms.
Naturally, though, this does mean there is a bit more risk. Bondora has a higher default rate than most P2P lending platforms. However, you can pick and choose your risk profile. You can do this yourself with the Bondora Portfolio Manager or Portfolio Pro. Or, you can just choose the “Go & Grow” investment account if you would prefer a more hands-off approach.
Overall, you can get very high returns with Bondora. Be careful, though. The higher your returns, the higher your risk. It has no buyback guarantee, so this could lead to a loss of your investment principal.
Loan diversification at Bondora: Choose from diverse consumer loans
Primarily, Bondora focuses on consumer loans, which it offers in Finland, Spain, and Estonia. There is a wide diversity in its loan terms. It lends anywhere from €500 to €10,000 at once. Loan repayment terms vary from short-term 3-month loans to 60 months.
Bondora is completely regulated and is a licensed credit provider, under the Estonian Financial Supervision Authority. It does not work with any other third-party loan providers. It issues all loans itself.
However, loan diversification does fall a bit short, here. It would be nice if Bondora also offered some secure property loans, for example. The emphasis on unsecured consumer credit means that it’s hard to build a balanced, diverse portfolio – or hedge against defaults. For this reason, we would not recommend exclusively using the Bondora P2P platform. It should be part of a broader investment strategy.
Bondora features: Automatic investing, secondary market & more
When it comes to features, Bondora does not disappoint. It has three automatic investing tools. Go & Grow automatically invests your money into a low-risk, high-liquidity fund consisting of multiple loans. For more fine-tuned control, the Portfolio Manager lets you choose your risk profile. Or, you can use Portfolio Pro, which offers you the opportunity to create custom portfolios and risk profiles.
Bondora also has a secondary market which makes it easy to buy and sell your investments. This can be helpful if you need to withdraw some cash from the platform. You can get started with just €1, making it easy for you to begin investing.
However, there is no buyback guarantee. None of your loans are protected from default. If you get unlucky, there is certainly a chance your portfolio could decrease in value. You can hedge against this by choosing a lower-risk investment style, however.
It’s also really easy to deposit money, and Bondora supports many different methods of depositing cash. You can use TransferWise, SEPA, Trustly, or VISA/MasterCard. This makes it easy for you to deposit your money and start investing.
Finally, Bondora has great analytics features that help you track the performance of your money. You can even export this data in an Excel spreadsheet if you’d like to crunch some numbers yourself.
Bondora user experience: Investing is quick and easy
The experience of using Bondora is incredibly easy. You can transfer money into your account quickly, and investing is as simple as setting up your risk profile, clicking a few buttons, and funding your investment.
We enjoyed using Bondora. It’s incredibly straightforward but has plenty of information and data about the loans it offers, presented in a simple, easy-to-understand way. It’s also super-easy to tweak your portfolio and buy and sell loans on the secondary market.
Overall, we have absolutely no complaints. The website always functioned as it should, loaded quickly, and provided us with simple, error-free user experience. Even a new investor should have no problem at all understanding the Bondora P2P lending platform and how it works.
The risks of using Bondora: Should you invest in this platform?
Using the Bondora P2P platform is riskier than some other top P2P lending platforms. This is because it offers unsecured consumer loans, and it has no buyback guarantee. If you have multiple loans that enter default, there is a strong chance your portfolio could lose value.
Still, the same could be said of any other P2P lending platform, even those with “safe” secured property loans. Losses are always a danger when you invest anywhere.
If you are interested in a high-risk, high-reward investment strategy, Bondora may be right for you. But if you prefer safer investments and don’t mind lower returns, it may not be the best option.