Welcome to our comprehensive review of Bondora, a prominent P2P lending platform that focuses on consumer loans. In this review, we will provide an in-depth analysis of Bondora, including its features, investment options, and user experience. Whether you're an experienced investor or new to P2P lending, join us as we explore the various aspects of Bondora and assess its potential for generating attractive returns through lending activities.
What is Bondora?
Bondora is a leading Peer-to-Peer lending platform headquartered in Estonia and recognized as one of the largest platforms in Europe. It specializes in offering self-originated unsecured personal loans primarily from Estonia. Bondora provides advanced tools and features that enable investors to automate their investment strategies effectively. The platform is accessible to a wide range of investors located across Europe. Bondora focuses on facilitating unsecured consumer loans, with loan amounts ranging from EUR 500 to EUR 10,000 and repayment terms varying from three to 60 months.
How does Bondora work?
To begin investing on Bondora, you need to complete the online registration process and deposit funds through a bank transfer. During your first deposit, you will also confirm the bank account to which future withdrawals can be made. Once your account is funded, you can start investing immediately. Please note that the minimum investment amount on Bondora is €1, and it's important to keep in mind that investments can only be made through the automatic investment option.
Previously, Bondora offered three investment programs: Bondora Go & Grow, Bondora Portfolio Manager, and Bondora Portfolio Pro. However, currently, the only available investment option is Bondora Go & Grow.
Types of investments available on Bondora
When you invest on Bondora, you have the opportunity to invest in unsecured personal loans from Estonia, Spain, and Finland. Bondora operates under a unique business model compared to many other P2P lending platforms. Instead of acting solely as a platform connecting loan originators with investors, Bondora also serves as a loan originator itself. This means that Bondora directly lends money to borrowers, eliminating the need for intermediaries. This direct relationship with borrowers can be advantageous in situations such as payment delays or defaulted loans, as Bondora can directly address these issues.
Currently, Bondora has reached its loan issuance limit and is not actively seeking new investors. Due to the high demand for investments exceeding the available loan supply, Bondora has reduced the interest rates to 4% per year. If you open a new Bondora Go & Grow account, your deposits will automatically earn a 4% return.
Investing with Bondora
If you are 18 years of age or older and reside in the EU, Switzerland, or Norway, you meet the eligibility criteria to invest on Bondora. Investing on Bondora is a straightforward process. You can create an account in less than 5 minutes, and once your account is set up, you can easily deposit funds by making a transfer to the designated account provided by Bondora. Once your funds are available, you can choose an investment strategy that suits your preferences and begin investing on the platform.
Bondora Go & Grow
Bondora Go & Grow is an immensely popular investment product offered by Bondora. It provides investors with a stable return of 4% per year, along with benefits such as high diversification and immediate liquidity. This investment option is particularly well-suited for beginners who prefer a hassle-free approach to P2P lending, without the need for extensive education or comparing multiple platforms.
Using Bondora Go & Grow is simple and takes just a minute. You create a Go & Grow account, specify your investment purpose, and define the initial investment amount, monthly contributions, and desired investment duration. The tool will provide an estimate of the potential returns before you finalize the settings. For precise calculations, you can utilize the compound interest calculator.
With Bondora Go & Grow, your funds will be diversified across a vast portfolio of 90,000 loans, offering exceptional diversification benefits. Should you decide to withdraw your invested capital, you have the flexibility to do so at any time, subject to a withdrawal fee of €1. This feature ensures convenient access to your funds whenever you require them.
Bondora buyback guarantee
Bondora does not offer a specific feature to minimize risk. However, one effective way to mitigate risk is by diversifying your portfolio across multiple loans. By investing in a variety of loans with different characteristics, such as borrower profiles, loan grades, and countries, you can spread your risk and reduce the impact of any potential defaults or payment delays. Diversification is a key strategy in P2P lending and can help to stabilize your investment returns over time. Therefore, it is advisable to allocate your investments across a broad range of loans on the Bondora platform to enhance the overall risk management of your portfolio.
Liquidity on Bondora
When investing, it's important to consider that your capital may be allocated to different assets, some of which may have specific lock-up periods. This also applies to P2P lending, where your capital is typically locked for the duration of the investment period. However, if you choose to invest in Bondora Go and Grow, you have the advantage of being able to withdraw your funds instantly, subject to normal market conditions. This feature provides flexibility and liquidity, allowing you to access your invested capital whenever you need it without having to wait for the investment period to end. It's worth noting that instant withdrawals are subject to the availability of liquidity within the platform and may be affected by market conditions.
Bondora secondary Market
Unlike some other P2P lending platforms, Bondora's Go & Grow investment product offers the advantage of instant liquidity without the need for a secondary market. This means that investors can easily liquidate their Go & Grow position and withdraw their capital at any time, without having to wait for buyers on a secondary market. This feature eliminates the potential complexities and delays associated with selling claims against borrowers. Previously, when Bondora offered Portfolio Pro and Manager, the availability of a secondary market was necessary for investors to sell their investments. However, with Go & Grow, investors can enjoy the convenience of immediate access to their funds without relying on a secondary market.
When it comes to usability, Bondora sets itself apart from other P2P lending platforms by offering a highly customizable dashboard. Unlike many other sites, Bondora allows users to personalize their dashboard according to their preferences. By clicking on your name in the top right corner of the screen, you can access the option to change the view and customize how much information is displayed. This level of customization enables investors to have a tailored experience and access the specific data they find most relevant and useful.
Brief summary of Bondora
Bondora is indeed one of the oldest Peer-to-Peer lending platforms in Europe and has a solid track record. However, it's important to note that Bondora's current focus is not on attracting new investors, as they are unable to issue more loans. As a result, the offered interest rate on Bondora is relatively low at 4%, especially when compared to other P2P lending platforms. This lower interest rate may not be appealing for many investors considering the associated risks.
Nevertheless, if you are seeking an alternative investment opportunity that provides high liquidity and the potential for returns of up to 4% per year, Bondora could be a viable option. However, it's worth mentioning that for risk-averse investors, there may be more attractive investment options available within the P2P lending market. It's crucial to carefully evaluate your investment goals and risk tolerance before making a decision.
- Instant liquidity, allowing investors to withdraw their funds quickly.
- Bondora's Go & Grow feature is user-friendly, making it accessible for beginners.
Points to consider:
- The offered interest rate of 4% is relatively low compared to other P2P lending platforms.
- Bondora does not provide a buyback guarantee, meaning there is no assurance that defaulted loans will be repurchased.