How we selected the Peer-2-Peer loans

After some months of investing in Mintos Platform and P2P loans (actually, after a lot of months of investing) I thought about publishing the auto-invest settings.

Currently we have 3 auto-investing strategies, as I totally abandon the idea of manual searching for investments (and more than happy about that, as the time allocated for managing this asset is about 10-15 min per month). The 3 auto strategies are:

  • 1 to 5-year investments
  • Small Term Investments
  • Secondary Market Investments

For all investment strategies we have similar settings (that we will discuss in a short time) and the net annual return is 10.23%. In some months it’s higher, in some is lower, but it has never been under 10%.

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This is the available balance at the current date (sorry for the question mark on the bottom…. I tried to use my phone in a productive way). The total profit is 40.46E in 1 year and almost 2 months since the first investment. This year we deposited the last 500E we needed to reach the 1kE account. With a net annual return of 10% we should have around 1150E (with no further deposits) next year at this time. It will be very interesting to see the progress.

Investment Settings

There are multiple settings that can be configured: from a particular loan originator (like Mogo, etc.) to specific countries (Denmark, etc.) and even Loan Types (Personal, Business, etc.), but the most important (from my point of view) is the Buyback Guarantee option (Yes/No).

Using their words: A buyback guarantee is a guarantee issued by the loan originator to the investor for a particular loan, that confirms the loan originator will repurchase the loan from the investor if that particular loan is delayed by more than 60 days. The buyback guarantee is given at an individual loan level and is marked by a shield. If a loan with a buyback guarantee is delayed by more than 60 days, the loan is automatically bought back by the loan originator from the investor at the nominal value of the outstanding principal, plus accrued interest income.

Using my words: when a loan is late, the loan requester can’t pay the credit, we will get our investment principal plus the interest on the months the credit was paid. So this is the most important setting I will always choose, even if this means a lower interest rate (better safe than sorry).

Now here are some differences.

1 to 5 years investment

For the long term loans I chose the compensation period to be between 12 months and 60 months and selected the available interest rate between 8.3% and 14.9% (rather generic).

Then the loans should be between 20EUR to 50EUR (each investment), with a size of 350E per portfolio (1000E/3 = 350E, yhea, I know, math…)

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The automatically reinvest option, reinvests all the money that is generated from the payments received (principal + interest), of course, the strategy will limit to the portfolio size, but the plan is to adjust the portfolio from time to time. Also, the include loans already invested in is a good option, to complement with the other portfolios or previous manual transactions.

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What I didn’t want to choose is diversification, because from my understanding it forces the portfolio to be split across loan originators in a fixed percent (for example 20% of investments should be accorded to loan originator X.). And maybe we lose better investments because of this.

Regarding loan types, the best options were: Personal Loan, Mortgage Loan, Short-Term Loan, and Car Loan and for countries: Denmark, Finland, and Romania. My choosing was a bit subjective to the current needs I have and feeling the market from Romania. Maybe they are not the best combination but I expected to have 0 problems from Denmark and Finland (as economically developed countries).

Small Term Investments

As previous portfolio settings, buyback guarantee is a must, we don’t care about the generated interest but the duration of the loan should be under 12 months.

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We have the same types of settings like the other portfolio for investment size, reinvestment options etc.

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For this type of portfolio I chose the same options for loan types except Mortgage (as by definitions is a bit longer). Here I acted more freely with the countries we invest in: Denmark, Estonia, Finland, Latvia, Poland, Moldova and Romania.

Secondary Market Investment

What does the Secondary Market suggest? Well all the loans that I want to sell, because I need the cash and want to liquidate as much as I can, as fast as I can, arrive on the secondary market. So it is like a re-selling of your loans. The interesting setting here is that you can add a discount (positive or negative). You either sell your loan cheaper (you spent 50E on the loan and you want only 48E) or expensive (paid 50E and want 52E).

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The other setting is pretty much the same, with only the loan size different. I also selected business loans and invoice financing loans for investment because my rationale was that sometimes businesses are late with the credit rate, but they pay fees for being late. As I don’t need the money now and I am not in a hurry it doesn’t have an impact on me. If things go bad, I have the buyback guarantee to help. Two other countries, I speculated on, are the UK (because of the talks of BREXIT, many will liquidate the business loans as companies tend to start moving) and Spain (more or less based on their GDP that is decreasing and the need of money, so loans will be available). I don’t know if I have the best reason, but it made sense to me.

Maybe some of you are still tinkling about that selling your loan and expecting more than you paid an idea. Well, it also bothered me for some time, but the interest on that loan can be very profitable, the loan requester is always on time, so the loan is very good( In that case you sacrifice 1% of your interest to have a stable income).


Until now the loan portfolios worked very well, only needed input from me is to prioritize them from time to time. We had no problems with loans, even if some of them went to 60+ Days late and the buyback guarantee kicked in.

At the moment from all the assets we have in our portfolio, P2P seems to be the most exacting one. And I really like this platform. As the plan is to grow in all directions I am more than curious to test some others (in the future).

Thank you for reading this!

Disclaimer: I am not a financial consultant, all the information you find here are my decisions, I taken in that moment, on my own analysis. I am open to any type of discussion about money. If you want to replicate my portfolio take into consideration that it is your money.

P.S. Header Image source is from Pixabay artist ar130405

Posted in P2P

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