Bondora is one of the oldest Peer to Peer (P2P) lending platforms in Europe. This platform lists self-originated unsecured personal loans from Estonia and has advanced tools to help investors automate their strategy. Bondora advertises the average annual net return to be 9.8%. Is this accurate or just an empty promise? Find out more in our Bondora review.
- 21/12/2020 - Bondora decreased the maximum monthly amount for Go & Grow to €400
- 1/12/2020 - Bondora restarted issuing loans in Finland
- 9/09/2020 - Bondora is limiting your investment amount per month to max. €1,000 (valid for Go & Grow)
Watch our latest video where we test and review Bondora's Go & Grow product.
Bondora in Numbers
In order to get a quick overview of the P2P platform’s performance, take a look at its statistics below:
|Investor's earnings:||+ €42 M|
|Total loan value:||+ €380 M|
|Number of investors:||+ 135,000|
|Loss of investors' money:||-|
|Average portfolio size:||-|
|Latest financial report:|
Watch our comments about Bondora's latest financial report:
Bondora is growing; the company managed to increase the number of funded loans as well as the revenue by more than 50% in the last year.
Bondora is always offering sign-up bonuses and promo-codes to give you an incentive to invest. Currently, every new investor that signs up with our link will receive a €5 bonus.
The best part about this is that you can get the Bondora referral bonus right after your registration.
Many other P2P lending platforms only add the sign-up bonus after investors have added their funds or sometimes they even wait until after they’ve invested in loans.
Additionally, Bondora regularly offers promotions and bonuses for loyal investors. Recently the platform gave out more than €25,000 to active investors that participated in the ‘Invest 2020’ promotion.
Is this Bondora bonus tickling your fancy?
Bondora New User Requirements
If you’re over 18 years old and live in the EU, Switzerland or Norway, you’re eligible to invest on Bondora.
If you happen to reside outside of the supported countries, Bondora needs to verify your application before you get access to their investment platform.
Unlike competitor platforms, Bondora’s sign-up process is very intuitive. Bondora also supports registration with Google and Facebook accounts to increase ease of signing up.
You can use SEPA transfer (bank transfer) to add funds to your Bondora account.
No EUR bank account? No problem
Risk and Returns on Bondora
When investing, it’s important to understand the risk and safety of certain investments, and therefore conclude whether the risk and return ratio is aligned with your financial goals.
When investing on Bondora you’re investing in unsecured personal loans from Estonia, Spain and Finland.
Bondora isn’t only a platform that connects loan originators with investors, it also takes over the loan originator role itself.
This means that Bondora lends money directly to the borrower, thus eradicating the middleman that exists on platforms like Mintos.
Bondora’s direct line of communication with the borrower is particularly useful if payment delays occur or in case of a defaulted loan. As a result, you are essentially lowering your investment risks by investing in this platform. This isn’t the case with Mintos, as the platform primarily tracks the performance of loan originators rather than the performance of individual loans.
If you have invested on other platforms like Twino, PeerBerry or Mintos, you might be familiar with the buyback guarantee. Bondora does not offer this feature. The only way to minimize the risk is to diversify your portfolio as much as you can.
Unlike Twino, Bondora doesn’t repurchase your claims against the borrower after 60 days. If you invest on Bondora you will experience defaulted loans and they will lower your expected returns.
Learn more about TWINO in our TWINO review.
Bondora offers three different products with potentially different returns. We will review them individually in more detail later. The majority of investors use the Bondora Go and Grow product, which can be used as an alternative to a savings account with no protection scheme.
The annual return for Bondora Go and Grow is only 6.75% which is half of the net return that you can currently achieve with platforms such as PeerBerry or EstateGuru.
Is Bondora Safe?
Our reviews about P2P lending platforms don’t only include information about the features and benefits but also about the background of the company’s leaders.
We also read through Terms and Conditions to make sure there aren’t any obvious red flags. The quality of information that we want to provide to our readers is our top priority, and due diligence is certainly a part of it as well.
Who Runs the Company?
Pärtel Tomberg is the current CEO and co-founder of Bondora. He founded the company during his bachelor studies back in 2008. Before he dedicated his full attention to Bondora, Pärtel worked at Quelle AG, which was later on acquired by Halens, where Pärtel was active as a business development manager.
Other co-founders are Mihkel Tasa and Martin Rask.
Rein Ojavere is the CFO of Bondora. He is in charge of all financial matters within the company. Before Rein joined Bondora, he was the head of corporate banking of the DNB bank in Estonia. He was also engaged with the asset management company Northern Star and Hansa Investment Funds. Rein holds an MBA from the University of Tartu.
Who’s the Company’s Legal Owner?
According to our understanding of the company’s structure, the company’s shareholders are the members of the supervisory board: Joao Monteiro, Mati Otsmaa, Phil Austern, as well as the following two investment firms.
- Valinor Management LLC - a private investment firm from the USA
- Global Founders Capital GmbH Co. - investment firm from Germany
Bondora isn’t sharing the exact amount of shares every shareholder is holding.
Are There Any Suspicious Terms and Conditions?
Bondora’s terms and conditions are pretty straight forward. Let’s have a look at some of the clauses worth mentioning.
Clause 5.7 - No liability for the credit scoring
As you already know, Bondora isn’t just a platform that connects investors with loan originators, it’s the loan originator itself. This means that it also does credit-scoring. In section 5.7, it states that the company or the person in charge is not liable for the validity of the credit scoring.
The credit score is just a metric, and it does not guarantee any returns of your investments. If you decide to invest in loans on Bondora, you do it at your own risk.
Clause 9.3 - What if Bondora defaults?
In section 9.3, Bondora ensures investors that in case of a bankruptcy, it won’t have any effect on the validity of the loan and resale agreements.
This means that in case you are using Bondora’s Go and Grow, you will still be able to request a withdrawal. How this will work in reality is another story.
Clause 11.2 - Amendments to T&Cs
If you are a loyal reader of P2P Empire, you know that some of the companies tend to reserve the right to change their terms and conditions as they wish.
Trustworthy P2P lending platforms always give you time to evaluate the changes before any amendments and that’s the case with Bondora.
Most platforms, Mintos and Debitum Network included, will give you only ten days to accept the changes. Bondora gives you four weeks, which we highly appreciate.
Segregated bank accounts
Bondora’s terms and conditions do not mention anything about how Bondora safeguards your funds. In one of Bondora’s blog posts, we found out that your funds are stored in segregated client accounts with the SEB bank.
All of your funds should be accessible by you at any time. Bondora uses your funds only when you, as an investor, give an order to purchase claim rights against the borrower.
Do Investors Have Access to Individual Loan Agreements?
Here you can find an example of what a loan agreement looks like. You can view individual assignment agreements under Settings → Contracts. Note that you will only find assignment agreements from your investments made via Portfolio Manager or Portfolio Pro.
There are no assignment agreements for loans that you have invested in with the Bondora Go & Grow tool. The reason for this is that you often invest in only a fraction of a claim. Given the claims are so small, it's not useful for investors to display detailed information of the specific claims in your Go & Grow portfolio on your dashboard.
We have not spotted any suspicious clauses during our due diligence check.
There are, however, investors who like to believe that Bondora is using a different write-down policy for their own defaulted assets vs those of investors.
This would suggest that all non-Estonian markets would make a loss for Bondora and its investors. This could be the reason why Bondora has stopped loan originations outside of Estonia.
Potential Red Flags
- Bondora is using different write-down policies for statistics presented in the annual reports vs. those presented to investors
In terms of usability, Bondora does a few things differently to other P2P lending sites. First of all, you can customize the entire dashboard to your own preference.
If you use the Bondora Go and Grow, you’ll find that some of the information that is relevant for investors that prefer to use the Portfolio Manager or Portfolio Pro might not be relevant to you.
You can simply customize how much information you see by clicking on your name in the top right corner and choosing change view.
Insights into Bondora’s Past Performance
Bondora also gives you access to various statistics that you can use to gain more insights about Bondora’s past performance. The statistics might be relevant to you if you invest a lot of money while using the advanced Portfolio Pro or Portfolio Manager. For Go and Grow users, the statistics won’t give much value.
It would be nice if Bondora could improve the structure of their statistics with some additional description as right now it’s not immediately clear what each chart is represents and how they affect your portfolio.
Bondora offers three different investment products. Let’s have a look at the differences between each of them to give you an idea which product is the best fit for you.
Bondora Go & Grow Review
Bondora Go and Grow is the most popular investment product. You can expect a stable return of 6.75% per year, high diversification and fast liquidity.
Bondora’s Go & Grow is the ideal choice for beginners who don’t want to spend time educating themselves about P2P lending and comparing various P2P platforms.
Using this feature is easy and can be done within just one minute.
You basically create a Go and Grow account, choose your investment purpose and define the starting amount, monthly contribution and the loan period.
Before you save the settings, the tool will give you an estimate about the potential returns.
Your money within your Grow and Go account will be diversified across 90,000 loans. There is no better way to diversify your portfolio on Bondora with any other tool than Go & Grow.
If you decide to withdraw your capital, you can do so anytime for a withdrawal fee of €1.
"Anytime" isn't always valid. During the "bank run" in spring 2020, investors had to wait two months to receive their money from Bondora's Go and Grow. So take Bondora's claims with a grain of salt.
The Go & Grow account is ideal for investors who want to use P2P lending as an "alternative" to savings accounts. You can set up monthly payments to your Bondora account and then you don’t have to worry about anything else. The Go & Grow tool will invest your added funds without any further actions from your site.
Please note that Bondora's Go & Grow product is not an alternative when it comes to the safety and liquidity of your funds on a savings account. The risk with Go & Grow is naturally higher.
You can invest up to €400 per month with Bondora's Go & Grow. This investment limit was introduced in September 2020.
Here is a sneak peek into our Bondora Go & Grow portfolio.
Portfolio Manager Feature
Bondora’s Portfolio Manager is their next best product. The main difference between this tool and Go and Grow is the liquidity and returns.
While with Go & Grow you can withdraw money instantly (during normal market conditions), with the Portfolio Manager you need to list them on the secondary market first and wait until someone purchases them for your desired price.
Also, the returns with Bondora’s Portfolio Manager can be higher (or lower) but also more volatile than those with Go and Grow.
So, how does it work?
With Bondora’s Portfolio Manager you can define your investment strategy as with Go and Grow. To get started, simply set up your starting investment amount, monthly contribution and investment period.
Apart from that, you can choose one of five different investment strategies based on your risk profile. Choose between a more conservative approach with lower risk and lower returns or a more opportunistic approach with high risk and higher potential returns.
Bondora is also going to show you a graph of how your investment is distributed across loan types (with ratings) as well as countries.
You can also use the Portfolio Manager to invest in loans on the secondary market if that’s something you are looking for.
Portfolio Pro Feature
Portfolio Pro gives you control over your diversification options. You can choose between three strategies or define all of the aspects such as a minimum investmentment amount, loan period and rating, interest rate, country and portfolio limit.
Bondora will show you the number of loans that match your criteria together with the expected return range and portfolio distribution.
While the Portfolio Manager and Portfolio Pro seem to yield higher returns than Go and Grow, you should remember that these tools don’t offer a buyback guarantee or any other protection that you can rely on.
This means that the expected return that Bondora is displaying for your automated investment strategy can fluctuate depending on the loans that are available at the time. In order to achieve your estimated returns, you should invest at least €50,000 so your investment is properly diversified.
Note that the expected return isn't guaranteed and that your return depends on how well Bondora manages to recover your investments.
How Fast Can You Withdraw Your Money?
When investing you’re always moving money into different assets. Some of the assets might lock your capital for a certain amount of time. The same applies for P2P lending.
Your capital is locked at the very least for the duration of the investment period.
Is there a way to access your capital and withdraw your money earlier? Yes.
Investors using Bondora Go and Grow can withdraw money instantly (during normal market conditions).
During our Bondora Go & Grow liquidity test in the beginning of September 2020, we managed to withdraw our entire €1,000 portfolio within just one minute.
If you happen to use the Portfolio Manager or Portfolio Pro, you can sell your investments on the secondary market.
A secondary market is a place where investors sell their claims against the borrowers. Most of the investors selling on the secondary market are doing so because they want to withdraw their capital and invest elsewhere, or because they think the borrower will not be able to repay the loan.
Investing on the secondary market is connected to higher risk. Investors trade opportunities for discounted prices. As there’s no real protection for your investments, we wouldn’t advise anyone invests on the secondary market.
If you decide to sell your investments on the secondary market, you will probably need to offer them for a lower price in order to make them more attractive to the buyer. Reducing the price, however, will lower your returns.
The secondary market is, however, an option if a platform suffers from cash drag and you want to invest your money within that platform. The best case for this would be investing on Twino.
Bondora’s Customer Support
Every investor should make sure that the platforms they invest on have a solid support center. Bondora has over 130,000 investors. With such a large number of people relying on the platform, it’s especially important that their customer service is up to scratch.
Bondora’s FAQs Section
So, what’s Bondora’s support system like? The platform has automated the support wherever possible. Frequently asked questions are grouped together into categories and answered within a dedicated support section on Bondora’s website.
Communicating with the Bondora Team
If you can’t find the answers to your questions on the support section, you can get in touch with Bondora by emailing them at firstname.lastname@example.org or by calling them on +44 1568 6300 06.
While a few months ago Bondora didn't respond to our support requests, our latest test of their support team turned out to be a much better experience.
Bondora's support got back to us within a few minutes. All of our questions regarding assignment agreements have been resolved. We will monitor the quality of Bondora's support and will update our Bondora review accordingly.
If you are someone that is just starting out with P2P lending and you’re having a hard time to answer all of your questions, Bondora's blog as well as their FAQ section is a good resource that will expand your knowledge around Bondora's products.
If you want to learn more about P2P lending, head over to our P2P lending academy to expand your know-how within the P2P lending space.
Bondora vs. Mintos
Bondora is often compared to Mintos as both platforms offer very similar features. What many investors don’t know, however, is that the companies follow a fundamentally different business model. You might remember this from the beginning of this review.
Here is a table that will help you understand the key differences between the two platforms:
|Number of investors:||+ 135,000||+ 320,000|
|Min. investment amount:||€1||€10|
|Protection scheme:||None||Buyback Guarantee (60 days + interest for some of the loans)|
|Features:||Go and Grow, Portfolio Manager, Portfolio Pro||Invest and Access, Mintos Investment Strategies, Auto Invest|
|Countries you can invest in:||1||33|
|Number of loan originators:||1||68|
So, Which Platform is ‘Better’?
Even though you can compare certain features head to head, you won’t be able to tell right away which platform is better for your investment needs.
The number of investors is one metric that gives you an idea about the popularity of the platform, however, this stat doesn’t give you any information about the platform’s quality.
Comparing the Minimum Investment Amount
The minimum investment amount is valid for any manual investments as well as automated investments that were done with the Portfolio Manager, Portfolio Pro, Mintos Investment Strategies or Auto Invest. If you choose to invest with Go and Grow or Invest and Access, your minimum investment can be as low as €1.
When compared with platforms like EstateGuru or Crowdestate, where the minimum investment in one project is €50 or €100, the only conclusion you can draw is that you achieve solid diversification with less capital.
When it comes to the protection of your investment, it’s fair to say that Mintos would be a "safer" choice for most investors because of "their" buyback guarantee. But as you know by now, Mintos' buyback guarantee doesn't mean anything.
Average interest is something that shouldn’t be your main comparison criteria either, as this is a historical metric. The more important metric is the interest of loans that are currently listed on the platform as well as the current default rate on Bondora.
Comparison of Features
When looking at investment tools, both platforms offer more or less the same features. When you look at the earnings from tools that promise high liquidity (Go and Grow vs. Mintos Invest and Access), Mintos manages to deliver higher annual returns (unless the lender gets suspended and your money will be locked).
Comparing Availability of Current Loans
If we could give you one takeaway from this small platform comparison, it would be to look at the current availability of loans.
We can't give a clear answer to the question which platform is better as both have their pros and cons.
Please refer to our P2P lending reviews to see which P2P lending platforms are recommended.
Find out why Bondora is a suitable Mintos alternative in our latest video:
Bondora Review Summary
While our experience with our Bondora Go & Grow has been positive so far, some investors don’t agree with the predicted interest rate for the rest of Bondora’s products, which for some even resulted in a loss. You should be very cautious when investing in unsecured loans on Bondora.
Main takeaways from our Bondora review:
- Transparent and open communication
- Confusing statistics
- Automated investment strategies
- Simple products such as the Bondora's Go & Grow
If you’re looking for an alternative investment opportunity with high liquidity and returns of as high as 6.75% per year, Bondora’s Go & Grow might be a good option for you. Be aware, however, that investing in P2P loans always comes with a risk.
Ready to grow your money?
Bondora Go and Grow vs. Mintos Invest and Access - which is better?
Both tools offer similar features, however, Mintos’s Invest and Access tool provides more safety due to the buyback guarantee as well as higher average returns as Bondora’s Go and Grow. Read our Mintos vs. Bondora section for more details.
Does Bondora offer a buyback guarantee?
Bondora does not offer a buyback guarantee on their loans. The only way to increase the protection is to diversify your portfolio. Find out more about this in the Risk and Returns section of this Bondora review.
Can I automate my investments on Bondora?
Yes, Bondora offers various tools that help you automate your investment strategy based on your financial goals and risk profile. If liquidity is an important factor for you, you can use the Go and Grow feature to create passive income with instant access to your capital.
What’s the average interest rate on Bondora?
The annual average interest is around 33%. But do note that it’s common for loans to default. The average net return on Bondora is currently at 9.6% per year. This is a historical metric and might not reflect the current offers on Bondora.
|Company:||Bondora Capital OÜ|
|Address:||A.H.Tammsaare tee 47, Tallinn 11316, Estonia|
|Phone:||+44 1568 6300 06|
|Opening Hours:||Weekdays from 9AM to 5PM|
|Social Media:||, , ,|