Mintos and other p2p lenders

[crimsonghost747]

For years I've been intrigued by these p2p lending platforms. However I've always been way too skeptical, mainly because they have always been full of payday loans and similar, and we all know the financial status of most people using those. People with horrible finances loaning money at ridiculous interest rates in order to fund their spending habits... sounds way too dangerous. And I'm pretty much against the whole idea of ripping people off with atrocious interest rates.

But I just opened an account with Mintos. This one feels different. Why?
First of all, people don't put their own loans up here. It's companies that have already handed out loans that sell you a portion (they are obliged to keep a portion for themselves) of the loan.  The majority of these loans come with a buyback guarantee, which means the company in question will buy back the full loan from you if there are no payments within 60 days. And the majority of the loans are backed with a decent collateral.

Currently I'm invested in a few auto loans from the baltic countries. Loans that have been paid in full without delay for the moment, with under 12 months remaining until maturity, all with the vehicle as collateral (with the value far exceeding the amount of debt outstanding). I'm picky about the ones I choose. Average interest rate for me: 9%

I'm steering away from the "personal loans" and sticking to auto because of the collateral. There are even some real estate deals (mainly home renovation loans with the real estate as collateral) but those come with a significantly lower interest rate.

Of course these are high risk investments. I would never put significant money into these, this is more of a thing I'm doing out of boredom. I'm interested in seeing where this goes. So far, so good.

Anyone have any experience with these?

[fenders53]

Not familiar with what you are doing but willing to learn..

[Kerim]

Every now and again I look into these things, and usually I conclude that they are interesting, but that I'd never be comfortable putting enough of my assets in to make it worthwhile.

[crimsonghost747]

(11-27-2018, 03:09 PM)Kerim Wrote: Every now and again I look into these things, and usually I conclude that they are interesting, but that I'd never be comfortable putting enough of my assets in to make it worthwhile.

Actually it's the last part that I've also been wondering about. I'm definitely not putting meaningful amounts money into this. I've concluded that 1000e is the maximum I'm comfortable putting there right now and at 9% interest rate that means 90e per year, minus taxes. 

That amount is hardly going to change anything for me. Even if I keep reinvesting it'll be years and years and years before I get to an amount that will actually matter. Then again, 90 is definitely better than nothing. Hell, I can get a "free" good bottle of whiskey every year! WOHOO!

I guess this is more of a hobby than an actual way to make money. Though I don't mind if I do manage to make a profit, no matter how small.

[Kerim]

Yeah, in some ways, DG investing is like watching paint dry. When I get bored, I'll put a tiny -- TINY -- amount of money into call options. Yes, it is compete gambling, but it gets the blood racing briefly!

[fenders53]

(11-28-2018, 09:05 AM)Kerim Wrote: Yeah, in some ways, DG investing is like watching paint dry. When I get bored, I'll put a tiny -- TINY -- amount of money into call options. Yes, it is compete gambling, but it gets the blood racing briefly!

I enjoy that a lot too but I lose too often.  So now I regularly sell options and tell myself I am either an insurance salesman, or teaching gamblers a lesson.  I'm not sure exactly what role I am playing when I win. 

And DGI investing is definitely a lot like watching paint dry.

[crimsonghost747]

Thought I'd give you guys a little update. It has been 3 months now since I opened the account.
Finished loans: 17
Current loans: 41 (4 of these are currently late)
Current average yield: 9.31% with an average duration of a little over 8 months.
Losses: ZERO.
Over 90% is in auto loans, less than 10% is in short term personal loans. This allocation may change a little as I'm trying to push my average yield to 10%.

Overall, it's been a breeze. As you can imagine quite a bit of the loans are later and or not getting paid at all, if it's late by some days it's fine. In every single case where the money hasn't showed up, the lending institution has renegotiated the loan terms with the customer, this results in the lending institution buying back the whole loan from you. I've never had to wait even 30 days, though the official time when the buyback kicks in is 60 days of no payment.

So far, so good. I've started to mess around with the auto-invest feature to make it more of an automatic process for the short term loan portion of my portfolio.

edit: apparently there is a referral program too. I won't post the link here as it's not the point of this thread but if someone is interested you can always PM me.

[fenders53]

I own a few stocks that are basically loan shark companies to very small companies. Not the same for sure but my method of playing this sector. Crazy high dividends and stocks increase in value too when the market is not scared like right now. It's a tiny amount of my port though. About the riskiest plays in my port currently.

[rayray]

Never....I have no issues watching paint dry.

[crimsonghost747]

Time for another update, so it's been what, around 7 months now?

Historical annual return is just below 10%. Expected annual return somewhere around 12% by my own calculations. In case you're wondering about the difference, the interest rates on most car loans have increased in the past months. Also I've taken on some payday loans too, just to keep the money circulating faster and of course for the slightly higher interest.

Still looking at 0 loans that have defaulted.

I'm significantly increasing my investments in the coming months. Yeah it's risky but the returns are too good to pass up.