Mintos Review

What Is Mintos?

If you're looking for a comprehensive review of the regulated P2P lending marketplace Mintos, you've come to the right place. In this article, we'll look at what Mintos is, how it works, and whether or not it's worth your time and money.

We'll also explore some pros and cons of using Mintos as an investor. So, let's get started with our Mintos review!

User Requirements

To invest on Mintos, you’ll need to fit with a couple of their requirements, such as:

No EUR bank account? No problem

• 💳 Open a free N26 bank account
• 💳 Get a free Wise card

You can transfer your money in nine different currencies, but we suggest you transfer your funds in EUR to avoid any conversion fees.

Mintos allows you to invest in different currencies. Note, however, that this increases foreign exchange exposure.

On top of that, Mintos can disable the exchange feature on the platform anytime, meaning you won't be able to exchange your investments back to EUR and withdraw them.

The cheapest way to transfer funds to your Mintos account is by SEPA transfer.

If you’re from the UK and want to invest in European P2P lending platforms, have a look at our Fintown review, and PeerBerry review, as Mintos, doesn't accept investors from the UK currently.

Risk & Return

History shows that Mintos is a higher-risk investment than other P2P lending platforms.

While Mintos offers many cashback bonuses, which increase the potential return, remember that 26% of the current portfolio isn't performing as expected.

This decreases the possible return for broadly diversified portfolios significantly.

Let's dive deeper into the risk variables and various products offered to investors on Mintos.

Fractional Bonds Explained

Mintos is the only P2P lending marketplace offering the possibility to invest in fractional bonds for as little as €50. The platform has just started offering investments in fractional bonds, so the currently available bonds are somewhat limited. 

Bonds on Mintos typically come with a longer loan term, fixed yield, and quarterly interest payouts.  All bonds can be sold on the secondary market, which may increase the liquidity of your investments. Every bond comes with a base prospectus where you can learn more about the terms and conditions. 

As Mintos informs its users, when investing in fractional bonds, you don't invest in the bond directly but via a bond-backed security that is issued by a special-purpose vehicle within the Mintos group. 

It's worth noting that investing in fractional bonds comes with similar risks as when investing in loans.

Additionally, if you decide to sell your fractional bond on the secondary market, you might not be able to find a buyer who is willing to pay the initial price. 

Mintos Notes Explained

As a regulated company, Mintos has transitioned from claim rights to Notes (asset-backed securities).

Before Mintos received the investment firm brokerage license, the platform offered investments from just €10 in single loans with a dedicated claim right in the form of a loan assignment.

Now, Mintos is packaging multiple similar loans into Notes.

This pool of loans is defined as a financial instrument with an ISIN (International Securities Identification Number).

The minimum investment amount into one Note has increased to €50, and one Note can include between 6 and 20 loans.

Here is a simplified process of how Notes are issued on Mintos.

In terms of return, nothing has changed from the previous structure. With Notes, you receive the interest paid by borrowers for the underlying loans.

When talking about protection, Mintos is evident that the lending company (loan issuer) may provide a buyback guarantee, meaning the lender will repurchase your investment should the loan be delayed by more than 60 days.

Remember that this is not a reliable protection scheme on Mintos, as many lending companies didn't honor this buyback obligation in the past.

€20,000 Protection Scheme

As a regulated firm in Latvia, the government is providing €20,000 investor protection on investors' uninvested funds on Mintos, meaning if Mintos goes bust and you have uninvested funds, Latvia will reimburse you up to €20,000.

This "scheme" doesn't cover your active investments on the platform, and Mintos pointed out that it should not be interpreted as a "deposit insurance."

Mintos & Taxes

Another change investors are experiencing with Notes is the requirement to withhold taxes on your earnings.

Previously, Mintos didn't withhold taxes on claim rights; this has changed for Notes.

As you receive interest from investments in Notes, Mintos will automatically withhold tax based on the applicable tax rate.

When you report taxes in your country of tax residence, you may usually lower the taxes paid by the withheld amount, so your effective rate will be the same as if you invested in claims. Mintos provides tax reports and income statements in users' dashboards.

This is valid only if your country has a double-tax agreement with Latvia.

If you don't want to deal with this hassle, you can also invest on Mintos as a company for which no taxes are deducted.

If you reside outside the EU or don't provide a tax residence certificate, Mintos will deduct 20% tax from your earnings.

Loan Types

While Mintos promotes various loan types, most loans bundled into Notes on Mintos are short-term, personal, or car loans.

Almost two-thirds of loans on Mintos are short-term loans, otherwise known as micro or payday loans.

Those loans usually have a short-term max. 90 days.

Note that short-term loans are riskier than mortgage-backed loans, as the default rates can be up to 40%, depending on the country and the lending company.

Mintos also lists mortgage, business, and agricultural loans and invoice financing. Those loan types are, however, barely available. If you are looking for investments in secured loans, you might want to read our review of LANDE.

Diversification Options

Mintos’ popularity stems from the variety of loan originators it offers.

Theoretically, you can invest in over 70 loan originators from 33 countries. 

In reality, the supply of loans from different loan originators varies. There are currently just a few established loan originators that you should consider investing in.

Note that on Mintos, the number of loans rather than the quality helps you minimize your risks.

Many bigger financial groups operate multiple lending companies in various developing countries.

Remember that there is a direct correlation between the lending companies and that if one lender with a group defaults, it significantly increases the risks for other lending companies within the same group. 

Many financial groups on Mintos offer the "group guarantee," which should cover the obligation from a defaulting lender.

However, this is not the case, as we saw previously with the suspension of Varks in Armenia and the fall of the Finko Group. 

As an educated investor, you should remember that several lending partners have the same shareholders as Mintos.

The P2P marketplace funds many payday loan providers owned by the same shareholders. This conflict of interest may harm your investments on Mintos.

More than 50% of "funds in recovery" are from lenders connected to Mintos' shareholders.

Buyback Obligation

Another feature worth mentioning is their buyback obligation. If you invest in loans with a buyback guarantee, your investments will be repurchased by the lending company after it's delayed for more than 60 days.

This seems just a promise as lending companies don't honor this buyback obligation (previously called buyback guarantee).

Note, however, that lending companies might exploit this in their favor. Instead of activating the buyback obligation, the lending company can extend the loan term up to 6 months.

Suppose the lending company decides to extend the loan. In that case, they don't need to activate the buyback obligation, meaning your investment term can be extended by several months, which harms your liquidity.

This sneaky strategy is also being followed on Lendermarket and partially on VIAINVEST.

Mintos Loan Originators

One of the users' favorite features on Mintos is the loan originator section.

Few P2P lending platforms give you as many details about their loan originators as Mintos. You can learn about the following:

You can analyze every loan originator or exclude countries, automatically eliminating loan originators operating in high-risk locations.

Mintos Risk Score

Mintos Risk Score is the platform's rating for individual loan originators. The rating is scoring criteria related to:

While the risk scores may guide you when defining your portfolio on Mintos, we would not suggest relying on them, as they can change quickly without many investors realizing it. 

In terms of returns, you can anticipate earning around 9% interest per year during normal market conditions.

The net return for 2020 was at 2% for "well-diversified" portfolios as many risks materialized, so keep in mind that the return rate might vary.

The return of your portfolio is highly dependent on the current interest for the available loans and the performance of the loan book.

Investors can earn significantly more stable returns on other platforms. Are you wondering how Mintos compares to Esketit? Check out our comparison Esketit vs Mintos.

Mintos Recoveries

Mintos regularly shares updates on their recoveries' current developments.

There is currently (December 2023) €144 M in recovery. Mintos managed to lower this amount by €80 M in year, if we also include the amount of funds with the status "pending payment". 

When investing on Mintos, you should familiarize yourself with the typical recovery process.

If you decide to invest on Mintos you should expect that some of your funds will eventually get stuck in "pending payments" or "in recovery", which limits your liquidity, increases the risk, and lowers your return.

Is Mintos Safe?

That's what we're going to address in this section.

Let's have a look at the safety of your investments on Mintos.

Who Runs the Company?

Mintos is run by its Co-founder and CEO Martins Sulte. Martins has been leading the company since its inception back in 2015. He also worked as a six-year financial analyst at the SEB investment bank.

Martins Valters co-founded the platform. He is currently Mintos's COO.

Both gentlemen gathered valuable experiences at Ernst & Young before launching their platform.

Watch our P2P talk with the CEO and co-founder of Mintos to get insights about the current developments of the platform and lessons learned from 2020.

Who is the Company’s Legal Owner?

Four angel investors and company shareholders fund Mintos.

Here is the list of the principal shareholders of Mintos:

• Maris Keiss (co-founder of 4finance and Mogo)
• Aigars Kesenfelds (co-founder of 4finance and Eleving Group former Mogo and owner of several loan originators)
• Kristaps Ozos (co-founder of 4finance and Eleving Group former Mogo
• Alberts Pole (co-founder of 4finance and Eleving Group former Mogo
• Martins Sulte - CEO Mintos (decision maker)
• Martins Valters - CFO / COO
• Employees through stock options

Note that Mogo was renamed to "Eleving Group" in mid-2021.

👉 Conduct Your Due Diligence

Are There Any Suspicious Terms and Conditions?

Mintos is changing its T&C according to what fits the company. Breaches of old T&C are ignored, and the new terms are being updated.

• T&C before the launch of Notes
• Latest T&C after the launch of Notes

The terms and conditions will mostly favor the company and protect its interest. As an investor, you accept that Mintos is not responsible for any losses you might suffer.

Old T&C Clause 6.8 - Amendments

Previously, Mintos could amend the terms and conditions of an assignment agreement without your approval.

Those amendments should not have affected already concluded agreements and should not put the user in a disadvantageous position compared to the earlier agreement version.

According to our understanding of the terms, Mintos didn't honor this clause as the P2P marketplace introduced loan extensions for already concluded agreements that put the users in a disadvantageous position.

It’s hard to imagine that any regulator would allow those practices in a regulated market.

We stopped monitoring Mintos' clauses as it no longer provides any substance for investors.

Past "updates" of terms and conditions show that clauses can be amended to fit the company's needs at any time, even if it puts the investors in a disadvantaged position.

If you are thinking about investing on Mintos, we suggest reading the current version of the terms and conditions before you invest.

Usability of Mintos

P2P lending sites tend to get very complex as new features are being developed, and you want to invest in an easy-to-use platform, right?

Mintos has plenty of features that will help you to automate your investments, such as the Mintos Auto Invest ;or Mintos Investment Strategies.

Let's have a look at some of Mintos' features.

Mintos Strategies (former Invest & Access)

The new Mintos Strategies comes with three different options. The core strategy, conservative strategy, and a high-yield strategy.

If we had to "recommend" a strategy, the "conservative strategy" would make the most sense, as Mintos is considering the portfolio quality of the lending company, which is by far the most crucial factor that has a direct impact on the performance of your portfolio.

The Mintos Strategies are made for investors looking for a quick way to invest with the potential to exit quickly. 

Most strategies come with a tradeoff - you cannot fully control your portfolio's diversification.

This disadvantage can be solved with a custom strategy - which most experienced investors use on Mintos.

Mintos Custom Strategy

You can use the custom strategy to either:

Automated or Manual custom strategy shall be used only by experienced investors. There is no point in using those strategies if you are just starting with P2P lending.

Mintos Auto Invest - Automated Custom Strategy

The Mintos Auto Invest's functionality relies on the current market conditions. You shouldn’t just set it up once but monitor the supply and demand for investment opportunities and adjust your settings regularly.

Setting up your Mintos Auto Invest is a more advanced topic, so we have created a dedicated guide where you will learn all there is to create your own Mintos Auto Invest strategy.

The automated custom strategy on Mintos allows you to take complete control over the diversification of your portfolio, which is beneficial if you invest large sums of money.

Mintos allows you to define the following criteria:

As you can tell, the Custom Automated Strategy comes with many options.

After "fine-tuning" your settings, don't forget to click on "show matching results" to see how many loans match your criteria.

Accept the terms and save your settings if you are happy with the selection.

Remember that the loan availability on Mintos fluctuates and that if your settings are too strict, you can suffer from cash drag (uninvested funds) as your settings won't match any available loans.

Liquidity

How fast you can withdraw your money depends on the market conditions and the tools you use.

Selling on the Secondary Market

If you invest on Mintos manually or have invested in long-term loans via Mintos Custom Automated Strategy, you can sell your investments on the secondary market.

This is recommended if you want to withdraw your funds before the end of the loan period.

Mintos has reintroduced a 0.85% fee for investors who want to sell their investments on the secondary market.

Although we don’t typically trade on the secondary market, it’s a benefit to help your liquidity on Mintos if you find buyers.

The liquidity of your portfolio on Mintos is relatively high if the lender you have invested is not suspended.

Mintos is also processing all withdrawal requests within two business days. 

Cash out with the Mintos Strategies

If you use one of the three automated strategies, you can withdraw your money anytime if enough investors use the same strategy.

Note that this is highly dependent on the market situation.

If none of the investors have this strategy enabled, you won't be able to cash out, as no one will buy your investments.

Remember that you can still sell them on the secondary market.

Keep in mind, that if a lending company is suspended, you won't be able to sell your stake if you have invested in its loan book.

Are you wondering how Mintos compares to PeerBerry? Check out our latest comparison Mintos vs PeerBerry.

Mintos Alternatives

While Mintos is one of Europe's largest players in the P2P lending industry, it doesn't mean it's the best fit for you. The pending payment and millions of users' funds in recovery are why more and more investors tend to look for suitable Mintos alternatives that perform better.

Esketit

Esketit is one of the best alternatives for Mintos if you want an efficient platform that delivers on its promises. You don't need to deal with pending payments, lost funds, or money in "recovery".

On Esketit you invest and earn yield every month. Esketit's Strategies enable you to diversify your portfolio and save time while earning passive income. Learn how to earn between 12% and 13% interest on Esketit in our Esketit review.

Income Marketplace

The Income Marketplace may be a good option if you enjoy using one platform to diversify your investments.

This platform enables you to invest in various lenders from various countries. That way you don't need to expose yourself to just one lender in one region, which may increase your risk.

Income Marketplace offers investments that pay up to 15% interest. Additionally, your money is protected by a buyback guarantee. Specific lenders even pledge their portfolio as collateral, increasing your investments' safety. Learn more about this platform in our Income Marketplace review.

Fintown

If you are looking for something different than Mintos, where you don't invest in payday loans in emerging markets, Fintown might be the right fit. This newly launched platform pays out 10% and 12% interest generated from rental properties in the city center of Prague.

So, instead of funding payday loans, you are funding rental units that generate rental income. Learn more about how it works in our Fintown review.