Bondster Review

Bondster Review

Bondster is a P2P investment platform from the Czech Republic. The P2P lending site has paid out more than €1.17M in interest to its 9,200 investors since 2017. By investing in loans on Bondster you can earn on average 13% interest per year. Find out how Bondster works and whether it's a good fit for you in our Bondster review.

Bondster in Numbers

Let's have a look at the following metrics for more information on this platform:

What can we see from the table above?

Since Bondster launched its P2P marketplace, the investment platform attracted more than 11,200 investors from all over Europe.

In the last three years, Bondster funded loans worth more than €54M.

While we could find some of the above data on Bondster’s website, other information, including the average portfolio size and any financial reports are nowhere to be found.

This gave us a good reason to reach out to Bondster and test their customer support.

Luckily, Bondster replied to our request within a few hours and the team was very keen to provide us with additional information about their investors’ earnings, average portfolio size as well as their latest financial reports.

Bondster’s New User Requirements

Signing up on Bondster is easy and straight forward. Here are all the requirements that you should fulfill if you think about registering on Bondster.

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

No EUR bank account yet? No problem

• Open a free N26 bank account
• Open a free TransferWise bank account

Bondster’s Risk and Return

Bondster is a P2P marketplace, meaning the platform lists loans from other lending companies.

These lending companies are also called loan originators.

Bondster’s largest partner is ACEMA, a loan originator from Czech Republic. ACEMA is an established lender that also lists its loans on Mintos.

Apart from ACEMA, Bondster is also collaborating with Czech lending companies such as bezbanky.cz, bankometr.cz and Yaris.

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

• stikcredit.bg (also listed on Grupeer, Viventor and Mintos)
• Mikrokasa (also listed on Grupeer)
• Kviku (also listed on Viventor, Iuvo Group and Mintos)

You can find a brief overview of all 23 lending companies on Bondster’s website.

Unfortunately, the financial statements that are published on Bondster are outdated so the overview doesn’t provide as much value.

If you're investing on any other P2P marketplaces, it doesn’t make much sense to start investing on Bondster, as the availability of loans from loan originators that you can’t find elsewhere is low. This means that you will be investing in the same loans on different platforms and that's no good.

Should You Invest in Czech loans?

If your goal is to diversify across loans from Czech Republic you will need to accept a lower interest rate.

Most Czech loans come with an interest between 4% and 9% per year.

Bondster also deducts 1% fee for all of your investments in Czech crowns. The 1% fee, lower interest and currency exchange fees make investing in Czech loans unattractive.

That’s also the reason why you should stick to loans in euros.

Bondster’s Buyback Guarantee

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

Depending on the loan company, your investment, together with the accrued interest, will be purchased back from you within 30 or 60 days of delayed payments.

Buyback guarantee covers: 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 Twino.

The differences usually stem from the number of days until the buyback guarantee is activated or the terms concerning the accrued interest. For example, some of the loan originators on Mintos do not pay accrued interest if a loan is delayed.

But that’s just a small detail.

Is Bondster Safe?

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

Who Leads the Team?

Bondster Marketplace s.r.o. was led by the CEO Jana Mückova since September 2019 to December 2020. Jana has left the company without any official statement.

The new management of Bondster hasn't been announced yet.

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, there is one more company based at the same address - CEP Investments s.r.o.

The CEP Investments s.r.o. is a company specifically 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.

👉 How to Conduct Your Own Due Diligence in 10 Minutes

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 that’s 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 do state that investors risk losing all their investments when using the platform.

Clause 8.9. - Repurchasing Rights

Another interesting part of the contract is that you can request the loan company to repurchase your assignment. Having this as part of the contract increases the trust in Bondster’s services.

We also had a look at Bondster’s assignment agreement and haven’t found any suspicious clauses here.

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 very good news, as many platforms change their terms and conditions as they wish.

Note, however, that Bondster won't notify you via email about those changes.

👉 Is Peer-to-Peer Lending Safe?

What’s Our Opinion About Bondster?

We have been closely monitoring Bondster for almost one year and here is our opinion about this Czech P2P marketplace. Bondster’s support is very responsive when we request any additional information.

The usability of the P2P platform isn’t that good anymore. It can take a while to get familiar with Bondster’s features and the Auto Invest isn’t by far very useful.

The liquidity on Bondster is certainly something to consider. There’s no secondary market and many loans are consumer loans with longer loan periods. To put it simply, you won’t be able to access your money if you happen to need it.

Bondster is not very transparent when it comes to the communication of changes in the management. On a positive note, Bondster has informed the investors about the upcoming changes in terms and conditions. The new terms and conditions will allow Bondster to amend the terms at any time prior letting you know about it.

Usability - How to Invest on Bondster

Before you start investing you should define your investment period - how long do you want to invest?

There are also other factors that you should be thinking about such as the securities and returns.

In order to see the currently available investments that match your criteria, go to “Investment Offer” and click on “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:

You still with us?

Great.

Now let’s have a look at the lending companies (loan providers) that offer loans that match our criteria.

As we write our Bondster review, only two loan providers offer loans that are aligned with our investment strategy.

• Tezlombard
• Kviku

If you’re already investing in loans from Kviku on Mintos or Viventor, you can exclude them on Bondster.

This leaves us with loans from Tezlombard.

Tezlombard operates 25 pawn shops in Kazahstan. The company employs 50 people and serves 60,000 borrowers. The company gives out payday loans with a period of 30 days. Tezlombard was profitable in 2018. We don’t have any information about their latest performance. It appears like the company isn’t investing much of their own capital into their loans either.

Is it the best loan originator out there? Definitely not.

If your goal is, however, to invest in EUR and earn more than 10% interest per year, there aren’t as many options available on Bondster at the moment of this Bondster review.

If you want more diversification or..

if you don’t care where you invest your money into, simply create an Auto Invest portfolio without any predefined settings. What you shouldn’t avoid is to activate your diversification settings which you can do before saving your settings.

That way your portfolio is at least distributed across all loan originators that currently list loans on Bondster.

This shouldn’t be your preferred long-term strategy as you fully rely on the competence of the platform that it will be able to protect your investments.

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

We certainly hope that Bondster will improve the reporting regarding the performance of their loan originators.

Our opinion about Bondster

Bondster has a lot of room for improvement when it comes to the usability of the platform as well as the presentation about their loan originators.

Annual reports for 2019 should be available for all of their partners at this point - which isn’t the case.

While the P2P marketplace is also available in English and German, the translation can be confusing and it can take you longer to navigate through your account.

In addition to the above mentioned improvements, Bondster also isn't the most transparent platform. Changes in management are not being communicated.

How Fast Can You Withdraw Money From Bondster?

If your goal is to invest short-term you won’t be happy 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 any time with 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. There is sometimes a fee (typically 1-2%) connected to early withdrawals.

You should know that the majority of loans do not offer you the option to liquidate your investments before the end of the loan term.

As there’s also no secondary market where you could sell your investments, the chances that you’ll be able to access your money before the loan is repaid are small.

Unless you get in touch with Bondster and try to sell your investments back to the loan originator. This option is available, however, you should be ready to pay a fee of 10% - 15%.

At the end of the day, it all comes down to your investment term. Bondster is more suitable for you if your goal is to invest long-term.

The best platform where you can cash out your investments fast is PeerBerry. This platform is suitable if you're a short-term investor.

Bondster’s Customer Support

Bondster’s customer support is very responsive. During our test, we requested Bondster's financial reports and the support got back to us with the income statements and balance sheets right away.

Many platforms, like Crowdestor or Fast Invest, don’t disclose this information, even when specifically requested.

You can get in touch with the support via their contact form where you can let them know whether you’d prefer to jump on a call with them or have them answer your requests via email.

Before reaching out to their support, we suggest having a look at Bondster’s FAQ section, as most of your questions have been already answered.

Bondster vs. Zonky

If you’re familiar with P2P lending, you might have heard about the P2P lending site Zonky. Zonky is the most popular P2P platform in Czech Republic, and many investors have asked us for a comparison of Bondster and Zonky.

We prepared the following table that should give you an overview of the differences between those two platforms.

Different Business Models

It’s not easy to compare these two platforms as they both fundamentally follow a different business model.

Bondster allows you to invest in euros as well as Czech crowns, while Zonky’s focus is to cater to investors from Czech Republic and Slovakia only. Their website isn’t even available in English.

Different Loan Originators

Zonky was the first P2P lending platform in the Czech Republic to list self-originated loans. Bondster, on the other hand, mainly works with loan originators from Russia, Poland, Czech Republic, and Bulgaria.

Zonky charges fees of up to 5%, compared to Bondster’s max. 2% fee which investors pay in case they want to withdraw their money before the end of their loan term. If you deduct the income tax on Bondster, your return will be still above 10%, which is over double Zonky’s return of below 5%.

Bondster also offers more guarantees than Zonky, where you can invest in unsecured personal loans with no buyback option.

Bondster Review Summary

Bondster is an alternative to other Baltic P2P lending marketplaces when it comes to decreasing the platform risk. Bondster allows you to invest in loans from €5 which will improve your diversification. Our annual yield on Bondster equals 12.41%. It's recommended to conduct your own due diligence of lenders on Bondster.

Main takeaways from our Bondster review:

• Lack of transparency
• Terms and Conditions are fair and comprehensive
• You can automate your investment strategies
• Your investments are backed by a buyback guarantee

While many P2P marketplaces struggle to provide high availability of loans during the current market conditions, Bondster still manages to keep your money invested. The P2P lending site paid out more than €2.2M in interest so far. The lack of communication is, however, something you should also consider when making your investment decisions on a particular P2P lending site.

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