Loan Originator Marketplace for 10+ Different Originators in EUR & CZK
Bondster is a marketplace for peer-to-peer lending that offers investments in loans from various loan providers, also called loan originators, which are non-bank financial institutions. Most loans on the platform are secured, e.g. by real estate, property and/or buyback guarantee.
|Business||Loan Originator Lending: Consumer Lending, Business Lending, Mortgage Lending, Real Estate Lending|
|Founder||CEP Invest Private Equity|
|Countries||Bulgaria, Czech Republic, Kazakhstan, Mexico, The Philippines, Poland, Russia, South Africa|
|Reports||2018 (PDF), 2017 (PDF)|
Bondster Pros & Cons
- Annual returns can be as high as 15%
- Many loans are secured by real estate or property
- Many loans are covered by buyback guarantee
- AutoInvest is available and has same filters as manual investing
- Investments in euros are free of charge
- Large number of available loans on the platform
- Direct investment structure
- All alternative investments with potential for high returns come with high risk
- No early exit option through a secondary market
- Buyback guarantee differs depending on specific loan
Characteristics of Loans
- Interest Rates: 4% – 13%
- Loan Durations: 1 – 240 months
- Currencies: Euro & CZK
- Collateral: None or real estate
- Guarantee: Buyback Guarantees
- Minimum Investment: 5 Euro
Loans on Bondster
Bondster is a Czech start-up and one of the fastest growing companies in the field of P2P marketplaces in Europe. Loans on the platform are provided by a great variety of loan originators and are offered both in Euros and in Czech Korunas (note that investing in CZK loans comes with a 1% fee, whereas investing in EUR loans is free of charge).
Investors that sign up to this peer-to-peer platform will be presented with the opportunity of investing in existing loans with a repayment history. The specific loan types that are available might vary, and investors can find mortgage, leases and consumer loans, just to mention a few.
As an investor, you should pay special attention to the fact that not all loans are secured. Therefore, make sure to double check whether a loan is secured or not, before you realize an investment. At least if you wish only to invest in secured loans – which is fully possible, of course.
Buyback Guarantee on Bondster
A buyback guarantee is a kind of an insurance that the investor will benefit from in case of a loan default. In this case, the buyback makes sure that the investor is returned the outstanding principal AND unpaid interest payments. This is a highly efficient way of increasing the security and mitigating the risks associated with investing money in consumer lending or other loan types.
In practice, a buyback occurs when a debtor does not meet his or her obligations. The buyback will automatically be activated after the defined period (normally 30 or 60 days, but it depends on the specific loan). What will happen then, is that the provider (in this case the loan originator) repurchases the outstanding loan and pays the unpaid interest payments to the investor.
Bondster only offers buyback guarantee for some of the unsecured loans. These loans can be recognized by the buyback icon (looks like a shield) in the list of currently available loans.
What Happens If A Loan Originator Or Bondster Goes Bankrupt?
The investment structure on Bondster is direct. This means that investors lend money directly to borrowers and have a claim against the borrower directly. You do lend through partners of the platform (loan originators) who ultimately lend money to the borrower, but the claim is between you as a lender and the end borrower. In comparison, the other investment structure in P2P lending – the indirect investment structure – implies that investors are investing indirectly in the loan without owning the direct claim for the specific borrower, but instead basically lends money to a loan originator.
Whether it is an indirect or direct investment structure influences what will happen to your investments in case of bankruptcy. In their FAQ, Bondster writes the following as an answer to the question “What happens if the provider goes bankrupt?” (and by provider, they refer to loan originator):
We carefully choose our partners, and we are convinced that this situation will not happen. If that were the case, Bondster is fully taking over all the loans that are invested in the Bondster market. It also provides income from debtors and distribution of investors’ share of their Bondster accounts.
Before accepting new loan originators to their platform, Bondster carefully verifies their financial stability as well as scrutinizes their reputation and ethical approach to lending. Additionally, contracts with loan originators and other terms of cooperation are elaborated in a way that ensures maximum protection of the investor.
Assets as Collateral
Some of the investments on Bondster is protected by collateral. This collateral might be assets such as real estate, immovable or movable property, and vehicles. When investing in loans that have assets as collateral, the investor is guaranteed the established value of the collateral, if the debtor becomes unable to pay.
When you have signed in to your profile and click on “INVESTMENTS OFFER” in the top left menu, you are taken to an overview page where you can browse through all loans that are currently available for investment on the platform.
Since there are a lot of loans available on Bondster’s platform, it is recommendable to narrow down the search to only include results that are relevant for you.
As illustrated in the screenshot below, you can filter the list based on some of the following criteria:
- Minimum and maximum interest rates
- Minimum and maximum maturity time of the loan
- Currency (CZK or EUR)
- Loans with or without buyback guarantee
- What country/which countries you want to see loans from
- Loan originator(s) through which you are particular interested to invest
- What loan types you want to see, e.g. mortgage, leasing, secured, business, etc.
- What kind of collateral you want for your investment (if any), e.g. real estate or car
By clicking on the red button “FILTER”, the list will be sorted according to your selected criteria.
From the list of available loans that are filtered based on your preferred selections, you get a thorough overview of all loans that match these specific criteria. If one of the loans catches your eye and you want to know more about it, you simply have to click on it and the most necessary details will unfold below.
In this overview, you will find additional information that will help you decide whether it is a good investment opportunity for you or not. Among other things, you can see, of course, what the loan amount is and how much of this amount is available for investment.
You can also see other details, such as:
- What the loan type is
- Who the loan originator is
- What the interest rate is
- Whether it comes with buyback guarantee and, if yes, how many days
- What the payment frequency is
- What the loan status is
- When it was issued
- When it is payable
- What the remaining maturity is
When you have decided on what loan to invest in, click on the “INVEST” button on the right side of the screen and indicate how much money you would like to invest in this specific loan. After completing the contract documentation and entering your password, your investment is completed.
Bondster’s platform offers an automatic investing tool that will allow users to invest in selected loans based on predefined parameters (to see these parameters, please have a look at the section above called “Manual Investing”).
The AutoInvest tool is a real time saver, since investments are automatically made in accordance with your defined requirements – when funds are free for investing, that is.
You set up the AutoInvest feature under “INVESTMENTS OFFER”. After having selected the desired criteria for your automatic investing, click on “CREATE AUTOINVEST”.
Bondster does not offer a secondary market on which investors can sell and buy already existing loans. However, the possibility of selling a loan back to the loan originator does exist, thus making it possible to make an early exit of a loan and still receive the value of the principal as well as accrued interests. On some loans at the marketplace you will be able to find a minimum term and price for exiting, ranging from 12 months and 1% to without limitation and 0%.
Nice to Know for Investors
Registration Process on Bondster
Both individuals and legal entities are allowed to register on Bondster’s platform, and Bondster only requires that investors have a bank account that is established at a bank within the European Union.
If you can live up to that, go ahead registering on Bondster! The process is very simple and intuitive, and it doesn’t take up more than five minutes of your time.
Here is af step-by-step guide for how to register as a user on Bondster:
1. Click on the red “Register” button on the front page
2. Fill out your personal information in the presented formula
3. Check your mail – you should have received an email with a registration confirmation and payment details
4. Complete the registration successfully by sending the first payment from an account registered in your name
Deposit & Withdrawal Process
Once your registration is completed successfully, you will need to deposit funds to your account in order to start investing. By clicking on the “DEPOSIT FUNDS” button under your “Account summary”, you will find all the necessary information.
All you have to do is enter a bank order in your internet banking account. Payment details can be found in your account (as illustrated in the screenshot below) and have also been to send to you in the email you received upon registration.
Keep in mind that payments from banks normally take at least 1 business day if it is realized within the same country and 2-4 days in case of international transfers.
You can withdraw money from your investor account whenever you want (of course, it requires that you have funds on your Bondster account) and transfer them back to your personal bank account.
Please note that the withdrawal transaction requires that you present a copy of an identification document, e.g. passport or driving license, and that you prove ownership of the account, e.g. by uploading a bank account contract, an account statement, or other.
Funding Methods for Bondster
- Bank Transfer
- Transfer Wise
- Currency Fair
Reporting Features on Bondster
One of the things that Bondster does really well is that they offer a very easy and more or less complete online management of your investor account. In your “Account summary”, you get an informative overview of your current investment account. For instance, you can easily see your available funds and total investments.
In addition, Bondster’s reporting features list the expected returns of your investments and loan status. It also allows you to list your current and past investments and request account statements.
Investors are legally obliged to tax revenue. You can find the documentation for processing the tax return in your profile in the Transaction Summary. Just download the listing for the selected period. However there could be local legal act for taxes in different countries.
Bondster FAQ: “Is my investment return taxed?”
Bondster can be contacted either by phone (+420 283 061 555) or email ([email protected]) or by using the contact form on their website, and they will get back to you as soon as possible.
Who can invest on Bondster?
Any citizens of any country as well as legal entities can invest. The prerequisite is a bank account, which is one of the important aspects for authentication and compliance with the AML (Czech Act No. 253/2008 Coll., On the Legalization of Crime and Terrorist Financing). The bank account must be established at a bank within the European Union. In other cases, Bondster user needs to proof his identity and the origin of the founds according to Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
Bondster FAQ: “Who can register for Bondster as an investor?”
Is Bondster Regulated?
Bondster is not authorized to operate the platform or regulated by any financial authority.
|Total investments||€44,2 million|
|Total investor earnings||€1,5 million|
|Average interest rate EUR loans||13,26%|
|Average interest rate CZK loans||7,79%|
|Number of investors||9.461|
|Number of loan originators||19|
|Short-term personal loans||30,31%|
|Other type of loans||1,52%|
|Latest financial report||2018 (PDF)|
At P2PMarketData we are dedicated to providing unbiased reviews of peer-to-peer lending, real estate crowdfunding and crypto lending platforms. Among other, in our mission to bring more transparency to the market we closely monitor and track over 70 platforms funding volumes.
When reviewing an alternative investment platform, we consider a variety of factors such as:
- Number of investors
- Minimum investment requirement
- Historical annual returns
- Diversification opportunities
- Reinvestment opportunities
- Educational and informational offerings
- Platform fees
- Total capital invested
- Features (such as secondary market and automatic investing)
- General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
- Management team
We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).