Total Funded:

€369,148,769

Average Return:

10.4%*

Bondora

Bondora is a marketplace for peer-to-peer consumer lending that allows users to invest in loans granted through the Bondora Group to borrowers in Estonia, Finland and Spain. All loans are unsecured consumer loans. It is possible to automate investments and the loans can be traded on a secondary market. For simplicity and easy lending the platform offers a product called ‘Go & Grow’ which allows users to receive up to 6.75% from Bondora’s portfolio of over 100,000 loans while still being able to withdraw the investment quicker than if selling individual loans on the secondary market.

Last updated: May 1. 2020

Business:Consumer Lending
Founded:2008
Founders:Martin Rask, Mihkel Tasa & Partel Tomberg
Origin:Estonia
Ownership:Private
Countries:Estonia, Finland & Spain
Investors:+119,000
Reports:2018 (PDF), 2017 (PDF), 2016 (PDF), 2015 (PDF)

 

Office location in Tallinn

Table of Contents

Bondora Pros & Cons

Pros

Cons

Characteristics of Loans

Interest Rates

5.71% – 19.92%

Loan Durations

1 day – 60 months

Currency

Euro

No Buy-back Guarantee

Minimum Investment ⇙

0

Direct Investment Structure

Loans on Bondora

Bondora displays an in-depth overview of the loans in six different columns:

  • Summary: Principal, interest rate, date of issue and expected last payment date.
  • Borrower: Age, country, current employment started, education and home ownership.
  • Income and expenses: Monthly income, mortgage loan (if any), loan liabilities without mortgage (if any), other liabilities and liabilities after refinancing.
  • Registered payment problems (if any).
  • Collection process (if any).
  • Loan schedule (amortization table with repayments): Date for expected payment, amount, principal, interest and late charge payments (if any).

If investing into single loans at Bondora is not preferred by most lenders, the platform has developed a product called ‘Go & Grow’. Go & Grow is a one-click investing option that gives the lender the option to lend to Bondora’s portfolio of loans instead of directly to the borrowers. The Go & Grow portfolio have a maximum return possible of 6.75 %. If the portfolio performs better than that, the platform will set aside cash for bad times to better secure a steady return to investors choosing the Go & Grow option. Below is an image of the setup of the ‘ & Grow product and how you could use it. As an investor in the ‘Go & Grow’ product you do not have to transfer a monthly amount or specify how many years you want to invest. It is possible to put as little or as much wanted into it whenever you please. The plan for the Go & Grow illustrated below is simply a proposal on how you could structure it and what you can expect from it. It is possible to withdraw the invested amount whenever pleased by paying a fee of € 1.

Buy-back Guarantee on Bondora

Loans on Bondora do not come with a buyback guarantee and if investing into single loan notes there will be defaults. This is something many highlight about Bondora. For this reason, many investors have chosen to move into the ‘Go & Grow’ instead of having a portfolio of single loans and trying to control the diversification themselves.

What Happens if Bondora Platform Goes Bankrupt or a Borrower Defaults?

There are two different types of investment structures in P2P investing:

  • The direct structure means you are buying a claim against the borrower directly. 
  • The indirect structure means you obtain exposure to a loan by investing in a loan issued by a platform company to the loan originator.

Bondora is a unique peer-to-peer lending platform in the way that it offers two different products with different risk profiles. The primary market is using the direct investment structure, which means that investors are lending directly to the borrower and if he/she goes bankrupt you lose the invested money if there is no collateral to claim at the borrower. The Go & Grow portfolio is using the indirect investment structure, which means that you are basically lending money to Bondora, and they then lend it to borrowers. The risk in this type of structure is different, because if Bondora goes bankrupt investors will lose the money invested in ‘Go & Grow’. This means that if investors invest in the primary or secondary market the risk is at the borrower; if investors invest in the ‘Go & Grow’ portfolio the risk is at the platform.

Platform Features

Manual Investing

Manual investing on the platform is simple and straightforward with the ability to filter a LARGE range of settings. The ones displayed below are just a few of them, but you can find anything from country, interest and Bondora rating to repaid interests/late charges to principal paid. The borrowers do not have different assets secured as it is simple consumer lending. The amount of loans is not huge, but it is possible to diversify between ratings and countries with a minimum investment of € 1 euro. All available loans are in Euro.

Automatic investing

The Portfolio Pro Manager offers the option to automatically invest on the Bondora marketplace with simple settings such as country, rating, loan duration, maximum investment per borrower and other filters with investments down to a minimum of € 1.

Bondora Secondary Market

The platform have a secondary market, but since the introduction of the ‘Go & Grow’ product it is not used that much anymore. The secondary market do not have any fee to the seller or buyer but offers an opportunity to exit the investment early if you are lending manually, auto investing or using the Portfolio Pro to invest directly into loans at Bondora.

Bondora Go & Grow Review - Risks and Advantages

Go & Grow is an investment product offered by Bondora that allows investors to easily lend money to a very diversified portfolio of Bondora issued loans at a return of up to 6.75% per year. Lenders are able to see the returns accumulate daily on the account and have the ability to request a withdrawal for liquidation as soon as possible which means, that the investors can access their funds instantly under normal market conditions.

As seen in the collapse of the alternative investment market under Covid-19 withdrawals from Go & Grow can be slower than usual as partial payouts was taking in use, as there is a mechanism to protect investor returns limiting the daily possible withdrawal from the fund. This product is ideal for people looking for lower risk than if they were to build their own portfolio of Bondora issued loans while having easy access to the money and automation of the investments.

Go & Grow Risks

  • Return: That the net return falls below 6.75% because of failure in the Bondora credit analysis and model.
  • Liquidity: That the amount of continuous cash buffer is not large enough to provide quick withdrawal. Partial payouts is key to protecting investors return and will be used in case a lot of people want to withdraw at the same time.

Go & Grow Advantages

  • A daily net return of up to 6.75% p.a.
  • Fast access to the money invested
  • High Diversification – lower risk compared individual loan portfolios.
  • Small minimum investment of 1€.
  • Easy and simple investing – it is a one-click solution.
  • Tax-efficient investing – for some investors tax is first payable at cash-out.
  • Goal creation with regular updates on progress.
  • Ability to save up money with friends and family by sharing a Go & Grow account.

Nice to Know for Investors

Registration Process

Registering at Bondora is very simple and easy. Creating an account as an individual requires just name, email and phone number. After creating an account Bondora will send an email with instructions on how to register. The platform complies with KYC (Know Your Customer) and you need to provide an identification document to be able to withdraw from the platform. Note that you can create an account and invest, but you will have to complete the KYC before withdrawing.

Deposit & Withdrawal Process

Depositing funds to your investor account is done in three steps:

  1. Transfer money to the Bondora account from your personal account with bank transfer or one of the below-mentioned funding methods.
  2. Your funds will be available for investment within the day of confirmed arrival (usually 1-3 banking days).
  3. After the funds are received and added to the account, you will receive an e-mail confirmation.

Withdrawing funds is very simple if you are already KYC validated. You just click the “withdraw funds”, enter the desired amount and wait the 1 to 3 business days. There is no minimum withdrawal restrictions and no additional fees or commission for withdrawing the funds – except maybe from your own bank. Remember, depending on their fee structure, your own bank might charge fees for handling the transaction or exchanging currency.

Funding Method

Bank Transfer

Reporting

Bondora features an incredibly detailed statistic page and you have the option to customize the page to contain your preferred information. On everything from loan rating to loan purpose, you will be able to see a graph of the diversification in your portfolio. However, this only applies to the primary and secondary market and does not include what loans the Go & Grow portfolio is invested in.

Bondora Tax

Bondora do not address how tax is paid on the platform and even claim that the Go & Grow portfolio is only taxed when you withdraw from the platform. This is most likely not true for most people, since you normally pay tax on income in the country in which you reside – whether the income is realized or not.

Support

For any questions, Bondora refers to their comprehensive FAQ section. However, if you do not find what you are looking for, you can contact Bondora on email (investor@bondora.com). It is also possible to reach Bondora by calling them on +44 156 863 0006. They answer the phone in normal business hours. During weekends, support is closed.

Phone

  • +44 156 863 0006

Opening hours

  • Workdays: 09.00-17.00 (GMT+1)
  • Weekends: Closed

Bondora Competitors

Who Can Invest?

Everyone above the age of 18 living in the EU, Switzerland or Norway and businesses registered in the EU or in a country approved by Bondora can invest on their platform. Other investors need to verified as an “accredited investor”.

Is Bondora Regulated?

Bondora is regulated by the Estonian Financial Supervision Authority (FSA) and was granted a Credit Provider license. Furthermore the operations are regulated by various consumer protection, financial services and other state authorities in various jurisdictions.  

Bondora Cashback Bonus - Get 5 Euro Upon Registration

Bondora offers a 5 Euro bonus on your first investment. The requirements are simple, use this link to Register at Bondora and you will see the bonus right away – to keep the bonus you must fund your account and invest at least 1€ within 30 days of creating your account.

Is Bondora Safe?

Bondora is one of the oldest peer-to-peer lending platforms in the world and the oldest in Europe outside of the United Kingdom where it all started in 2005 and this adds some credibility to the platform compared to newly started platforms – also the Bondora Group is profitable. But Bondora do not offer a buyback guarantee and this can be a problem without the right approach with a good understanding of diversification and the underlying assets. To counter this Go & Grow was created to offer a simple solution in which Bondora manages the portfolio and makes it simple for investors to tap into the return of having a well diversified portfolio at the platform.

In the beginning of this platform there was a lot of complains about their highest risk loans that had a high default rate and for high risk investors this meant some losses, but if you are into more advanced lending than the Go & Grow one click solution, Portfolio Pro can be used but should still be approached with care, a look for the safest loans and diversification as a high priority.

Disclosure

Please note that this overview may contain affiliate links. It means that a commission is earned if you decide to invest after using the link – of course without additional costs to you. The information on this site does not constitute investment advice and is solely to give you a simple and easy overview of the platform. Always conduct your own due diligence and consult your financial advisor before making any investment decisions.

* Historical return is not a guarantee of future return. The average net return number is directly from Bondora’s website bondora.com

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