Bondster Review

Bondster Review

Bondster is a P2P investment platform from the Czech Republic which claims to offer investment opportunities for over 17,000 investors. The platform lists loans from third-party loan originators that provide a 60-day buyback guarantee. Despite this security mechanism, most lenders are not fulfilling the buyback guarantee, and Bondster fails to protect investors' interests. Learn more about Bondster in this Bondster review.

Bondster’s New User Requirements

Signing up on Bondster is straightforward. You should fulfill all the requirements if you consider registering on Bondster.

You can either transfer funds in euros or Czech crowns. If you want to invest in euros, you should transfer your money in euros to avoid currency exchange fees.

You can use digital bank accounts from Revolut or N26 to top up your Bondster account should you decide to give Bondster a go.

Keep in mind that you have to verify your identity before making any withdrawal from Bondster.

Bondster will charge a €2 withdrawal fee if you withdraw your positive balance more than three times per month. The first three monthly withdrawals are free of charge.

Risk and Return

Bondster is a P2P marketplace that lists loans from other lending companies.

These lending companies are also called loan originators.

Bondster’s most significant strategic partner is ACEMA, a loan originator from the Czech Republic. ACEMA is an established lender. The owner of ACEMA also owns Bondster.

Furthermore, Bondster is funding loans from known loan originators such as:

• LIME Zaim (RU)
• Rapicredit (Colombia)
• Kviku (RU)
• Right Choice (PH)
• Lime (SA)

All the listed loan originators failed to fulfill the buyback guarantee in time. You can find a brief overview of all 24 lending companies on Bondster’s website.

Bondster is undoubtedly focusing on lenders offering higher interest rates. Risk management is rarely considered. The platform doesn't provide safe investments.

Remember that you will often find yourself investing in emerging markets. We recommend researching the lender before investing in its loan book.

Bondster’s Buyback Guarantee

Most unsecured personal loans on Bondster offer a buyback guarantee provided by the loan originator.

Depending on the loan company, the lender will purchase your investment and the accrued interest back from you within 30 or 60 days of delayed payments.

Buyback guarantee should cover: loan principal (your investment) + interest.

Buyback guarantees of this kind are standard within the P2P lending industry, and you’ll find similar features on platforms like PeerBerry, Robocash, and Esketit.

The difference with Bondster is that the lender can decide not to honor the buyback guarantee, and Bondster won't do anything about it.

Loan Types

Bondster offers a variety of loan types.

If you decide to invest on Bondster, you will invest in consumer and short-term loans.

Bondster offers secured business loans (from ACEMA) and car loans or loans backed by crypto or mortgages.

Keep in mind that secured loans are subject to availability. Use the auto invest feature to determine whether currently available loans match your investment criteria.

Risk Ratings

Bondster's ratings are some of the most critical indicators to help determine the lender's portfolio profitability.

In theory, investing in the highest-rated lenders (A+ to A-) will significantly improve your risk and return ratio.

Look behind the scenes to understand better how Bondster is scoring its lending companies.

As you can see, the scoring process is pervasive. Keep in mind, however, that the situation is changing quickly, and unexpected risks might materialize at any time.This rating metrology does not yield the best results for investors.

Is Bondster Safe?

We suggest you do your due diligence about every P2P platform before investing money. Here is what we’ve found out about Bondster:

Who Leads the Team?

Bondster Marketplace s.r.o. is led by CEO Pavel Klema, who has previously worked in various Czech lending institutions.

Who is the Legal Owner of the Company?

Bondster s.r.o is owned by CEP Invest Private Equity SE. The owner of CEP Invest Private Equity SE is Václav Valeš. According to the Czech business register, one more company is based at the same address - CEP Investments s.r.o.

The CEP Investments s.r.o. is a company expressly set up for private investments by the CEP Invest Private Equity SE. Michal Ondrýsek is the executive officer of CEP Investments s.r.o.

We haven't found anything suspicious when researching information about the founder of Bondster. However, you should know that Bondster is funded by ACEMA (one of their primary lending partners).

Are There Any Suspicious Terms and Conditions?

Bondster’s terms and conditions are 53 pages long, and we went through the contract with a fine-tooth comb to check for anything suspicious.

The result? Nothing major!

The company’s terms seem to be a standardized contract similar to those on other P2P lending platforms.

Clause 7.7 - Risk of Default

One thing to point out (although this is the case with all lending sites) is that Bondster’s terms state that investors risk losing all their investments when using the platform.

Clause 8.9. - Repurchasing Rights

Another exciting part of the contract is requesting the loan company to repurchase your assignment. Having this as part of the contract increases the trust in Bondster’s terms and conditions.

We also looked at Bondster’s assignment agreement and haven’t found any suspicious clauses.

Clause 1.3 - Amendments to T&C

We should also point out that Bondster will inform its users at least 30 days before the platform introduces changes to its terms and conditions.

That's excellent news, as many platforms change their terms and conditions as they wish.

However, Bondster won't notify you via email about those changes.

What’s Our Opinion About Bondster?

We have closely monitored Bondster for over three years and invested our own funds. Here is our opinion about this Czech P2P marketplace.

There are a few positive and a few negative points that we shall point out so you can manage your expectations when investing on Bondster.

We can say that the due diligence process and monitoring are unbiased. The scoring model consists of objective as well as subjective ratings.

During our talks with the risk manager, we learned that lenders operating for over three years are rated higher than recently launched startups.

We have seen the data Bondster has access to, and we can say that it’s much more accurate than what investors see on Bondster’s website.

Unfortunately, the statistics page on Bondster is not updated daily, which shows the lack of transparency the management is following.

We have had a long discussion about this, and the CEO agreed and promised that this is now his priority #1 to add LIVE data and suspended lenders. Hence, investors gain more insights into the current performance of Bondster’s loan listings.

We had this discussion in April 2022, and Bondster hasn't delivered this promise; instead, the performance deteriorated substantially.

There is certainly room for development regarding the platform's usability. It’s not as easy to navigate on Bondster as on other platforms. There is also no mobile version of the website available.

The CEO is very aware of the weaknesses and has shared his plan to improve in this field with us. Again, he failed to deliver on this promise.

Bondster is very flexible with non-paying lenders, increasing the number of delayed loans on the platform. It happens regularly that lenders don't have enough cash balances on Bondster to cover the buyback obligation.

While we have a minor exposure on Bondster, as you can see in our P2P Portfolio.

There are, however, much better options to earn passive income on your investments. We recommend reading our reviews about the top-rated platforms.

Usability

Before investing on any platform, you should define your investment period - how long do you want to invest?

It would be best to consider other factors, such as the securities and returns.

To see the currently available investments that match your criteria, click “Investment Offer” and click “Detailed Filters”.

You can now define your criteria and click on “Filter”.

Bondster offers a wide selection of loans, which is why you can define various variables.

We suggest sticking to the basics.

We defined:

Always check how many loans match your investment criteria. Keep in mind that the availability of certain loans is limited.

You shouldn’t avoid activating your diversification settings, which you can do before saving your settings.

Some investors will suggest investing in everything to diversify your portfolio across all loan originators that currently list loans on Bondster.

Investing in everything shouldn’t be your preferred long-term strategy as you entirely rely on the competence of the platform that will be able to protect your investments.

Investing in more reputable loan originators with better reporting standards is better.

Bondster allows you to invest manually, customize and automate your strategy or use some of the predefined automated strategies.

Automated Strategies

At the beginning of 2022, Bondster introduced automated strategies to help you save time and maximize your returns.

Those automated strategies are good for you if you are only investing on Bondster. If you are active on multiple platforms, you might prefer to use the custom strategy and maximize your returns.

If you are happy with investing on Bondster, you can choose from two investment strategies:

Each strategy has predefined settings that help you fine-tune your portfolio according to particular risk preferences.

You want to minimize the risks and maximize your returns. Choose lenders that operate in regulated markets, provide updated financial information and show good portfolio performance. That's a more suitable strategy than blindly relying on the buyback guarantee.

Liquidity

If your goal is to invest short-term, you won’t be pleased with Bondster.

The platform offers two different exit options for your investments:

• 1. Smart Reserve: The smart reserve is a function that allows you to withdraw your investments at no additional cost. Note that this is only available for certain loans with a low interest of 3.9%. These loans are specially marked with the option.
• 2. Guarantee of Liquidity: Some loans give you the option to exit your investment within a week, month, quarter or year. Sometimes, a fee (typically 1-2%) is connected to early withdrawals.

Bondster also has a secondary market, where you can sell your investments before the end of the loan term. Remember that Bondster will charge you a 0.5% fee if you sell your loans on the secondary market.

The liquidation of your assets on the secondary market can take several weeks, depending on the type of assets you are selling and your offered price. If your loans have matured or are delayed for more than 60 days, you can't sell them on the secondary market anymore.

Bondster’s Customer Support

Bondster's support is terrible. Investors should consider themselves lucky if they receive any answer from Bondster within a week. 

While during our visit to Bondster in spring 2022, the team was more transparent and answered all of our questions, we can't confirm the same in month year.

Bondster Review Summary

Bondster is one of the worst P2P-lending platforms in Europe in year. The platform fails to protect investors' interests and focuses on paid ads instead of attracting new capital. The platform is underdeveloped, and lenders don't honor the buyback guarantee. 

Main takeaways from our Bondster review:

• Unreliable buyback guarantee
• Poor communication
• Underdeveloped platform

Bondster is not even suitable for more opportunistic investors.

As soon as the performance decreases, Bondster stops communicating.

Many lenders don't fulfill the buyback guarantee, significantly increasing your investment risk. As better platforms are on the market, we suggest reviewing other P2P lending platforms instead.