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When I found Bondora I felt it could suit my needs
▶︎ Some Bondora reviews were just bad
What to do?
I tried it myself
After 4 years I am happy and profitable, read why…
I’ve just learned from others’ mistakes
Let me review Bondora..
“I want to own a bank”
As a child, they teach you that the house always wins… and statistics confirm this.
As an adult, the house is represented by the banks and we have learned that these, indeed, always win. Then we get angry and we curse about the charges, the untimely investments, the untranslatable accounting and, most importantly, the interests we pay on loans.
Have you ever wondered if YOU should maybe be the bank?
Maybe you did, but it wasn’t possible before. But now (somehow) you can!
Bondora is legally licensed to operate in Estonia by the Estonian Financial Supervision Authority (FSA). The FSA is the main regulating body in Estonia.
Bondora funded 320 Million euros in loans since 2009.
This data make Bondora one of the oldest and biggest P2P lending operators in Europe.
“Bondora is one of those platforms that allows me somehow to “act as a bank” by lending, more or less indirectly, money to private parties to receive interests on their debt.
Here is not only my review on Bondora,
this is my direct experience
I will only tell what I do. I don’t recommend investments, but I can recommend you only to read reviews written by real investors.
Once decided Bondora fits my needs, I went straight to learn how to set it up in a convenient and productive way.
This is how I use Bondora in a way that won’t make me worry much about it in the future.
I haven’t paid any commission, either for depositing money nor for investing it. Bondora signup and use are also free.
Transferring money and interests accrued into my bank account is free, too.
Bondora 2020 update:
Bondora also allows to register free and instantly by using our Google and Facebook accounts.Visit bondora
Where does Bondora keep my money?
The money I transfer is kept by SEB Bank, a Scandinavian bank with a higher rating than many European banks.
Bondora finances are separated from those of others investors, so, at least up to this point, if Bondora had to close, our money should not be directly affected.
What does Bondora do?
Bondora, like other P2Ps, groups together and manages a large series of loans granted to citizens of some European countries (consumer loans). Then, it makes me take part in the loan in an almost virtual way, by allowing me to cash-in the interests that people pay to the financial Bondora that has granted the loans.
In doing so, it transfers to us a bit of the risk that lending involves, and of course, the interests.
Bondora also deals with recovering the debts from slow payers so that I don’t have to take care of that.
Unfortunately, the impact of slow payers isn’t always very clear in the data it publishes, but it is certain that by selecting well, with such high returns, it is difficult to be completely wrong.
The potentially late loans are mostly gathered on the “high risk” ratings, while they are obviously less frequent in the higher ratings (more reliable borrowers).
The average person who complains about #Bondora (there are a few on the web) is typically someone who looked for the maximum return in the past (see photo below) without worrying about the credit risk Click To Tweet
Instead, I have analysed the risk/return factor and I have made the following conclusions.
Before continuing, I now invite you to repay the effort and the research I have put in writing this article: just share this post! It costs you nothing, and it feels great for me! Thank you!
🛠 How to invest with Bondora?
There are three ways available to use Bondora:
- Portfolio Manager (basic and fast setup)
- Portfolio Pro (fine-tune on credit scoring and duration)
- Go & Grow auto-invest 6,75% (hands-free one click investing)
Let’s see how it works!
This is how I have invested with Bondora successfully for 4 years now
By following my super-simple Bondora set-up, I have been able to reduce most of the risks without excessively compressing the returns.
To invest with bondora I had to follow 6 steps:
- Visit the signup page and register (Google/Facebook are allowed)
- Load funds using a credit card or a bank transfer
- Choosing one of the three investing systems (Go & grow is the easiest)
- Activate one or more investing systems
- After 2 weeks make sure no money is left uninvested
- Monitor the platform once every month or even less
To sign up I’ve just used my email address, then I received an email and I filled in the rest. Also Facebook and Google sign-up are available (open this in a new browser window if you wish, but keep reading).
How I loaded my funds on Bondora
Immediately after subscription I have deposited the amount of money that I wanted to invest on Bondora.
Well, not ALL the amount straight away. I wasn’t brave enough at that time.
I’ve picked the option of depositing some cash by Visa (also Mastercard is available now).
How to transfer money and what to expect
Here is exactly what I did next to speed up my investment in loans
Supposing that a credit card has a limit and I want to invest a consistent amount to get a relevant additional income, I will consider making a SEPA bank transfer instead. And this is exactly what I did after few days of investing by credit card and after my very first test was completed.
Honestly? It wasn’t an easy step, because Bondora was rather unknown in my country.
Just to get an idea, investing at 12% yearly interest rate on Bondora the amount of 10.000 euros may generate 1200€ per year approximately.
Should I invest 50’000€ at the same rate I would be able to make approximately 6000€ yearly, which is a respectable additional flow of income in my opinion.
Once again, it is important to avoid high risk loans to achieve it safely.
15% of Bondora investors earn more then 15% or even 20% yearly (Bondora data 2019).
I am fine to settle for a little less and I’m very happy with my conservative settings
The SEPA transfer is a transaction that is normally free of charge in Europe.
Making a wire transfer abroad of a certain amount of money can be scary.
I hesitated a few days before depositing my money there, but finally I did it. It was some years ago. No regrets, so far.
95.000 small/large investors all around the world use Bondora now to obtain returns that don’t exist anywhere else anymore with the same amount of risk. I keep an eye open, but at the moment, I believe there’s no reason to worry.
Some smaller and exotic peer to peer lending companies are out of my radar for safety reasons.
Follow Revenue.Land and you’ll get all my updates real time.
How I started with Bondora
As I said, there are 3 ways to invest.
One is called “Portfolio Manager” and it’s the easiest and most direct way
Another way is called “Portfolio PRO” and it gives me more control
- The most automatic way is the Go & Grow% 6,75% capped interest
Here I am going to show you my “Portfolio Manager” setup
This is to start as soon as possible and to start enjoying the paid interests.
An easier alternative is the Bondora Go & Grow setup.
To know more about the third option, the advanced “portfolio pro” read this.
Let’s now go to the “Dashboard”, the splash screen.
Pressing “start” on the left bottom I will “Activate Portfolio Manager”.
Let’s set the “starting amount” and the “years of investment” and I will automatically see an estimated “expected return” in the green window on the right. On the right, I’ll also find the expected distribution by rating and by country.
If I wish to have more control on this elements I need to move to the “portfolio pro”.
This auto-investment is enough if I don’t feel too confident at the beginning.
What to remember:
- I prefer the “ultra-conservative” setup
- I remember to set the Years to “1”
By clicking “Start” on the bottom right I agreed to terms and started to invest on Bondora.
Now I’ve set up the Portfolio Manager, and I can move to “investments” to see how my position evolves.
I am done.
I am investing with Bondora and it only took me few minutes!
Obviously the higher the return, the likelier the chance of absorbing loans given to less trustable people.
Why do I believe is wise to “stay” at the left of the range? Just to balance risk and profit wisely. Doing so, I am telling the platform to buy for me fractions of “not too risky loans”.
It can be very very tempting to move towards the right side of the range, towards the higher returns. But I won’t go there.
This is because down there I’ll bump into investment whose success is highly linked to the system ability to recover the credit, as they’re high-risk loans, often granted in Finland and Spain.
Some of the high risk/yield loans are paid with delay, some can even default.
The process to recover defaulted loans can be slow. On the other hand, Bondora recently declared that the ability to recover money from who is not paying on time, has greatly improved in the past few years.
Opportunistic expositions offer really high returns but it can also bring losses and can delay a lot the time I need to get back my investment.
I don’t want it.
This is why I stick to the less risky ones and I resist temptation.
I consider that nowadays a 10y German BUND (government bond), doesn’t pay much (less then 1% gross). Very safe, but not profitable these days. That’s why I need to rebalance a tiny part of my investments in a new way, and since I can get 8-14% revenue with P2P lending, that’s going to be enough for me for a test.
🎥 Bondora video setup
The magic of compound interest
As soon as I’ve transferred the “loot” that I want to multiply, I’ve made some calculations. With a 10/15% interest, I’ll be able to double the invested amount of money in few years.
In the chart below, we see the effect of the combined interest, that is to say, how much the capital increases exponentially once I’ve started reinvesting what I’ve earned.
For example: if I invest 20.000€, after one year I will have at least 2000€ more, rather effortlessly.
If then I reinvest again (Bondora will do that for me) the initial sum plus what I have accrued, with some patience and monitoring, the result across the year will be exponential, as the chart shows.
Bondora is a long-term investment.
Swooping returns with Bondora
For a number of reasons, the returns have been slowly decreasing over the past few years. Until a few years ago, an 18% “automatic” average with Bondora was no pipe dream. Now the average is between 9% and 15% with my settings.
It is possible to predict that in the future I could have to deal with lower rates (but still really high and legal). Many of those who invested just 4 years ago say they have already doubled their sum.
With “safer” traditional investments, I’d need decades to get a similar result. Of course risk/reward ratio is different, so I allocated a part of my capital here.
Bondora mistakes 🏴
Temptation if beautiful.
The truth: Bondora extremely high interest rate on some loan classes are really tempting (>40%).
Misguided investors before me didn’t resist and now complain about high-risk loans that are late.
- I’ve studied their portfolio
- Analyzed their complains
- Crossed data with statistics
- Came out with the easy strategy I’ve shown above (alternative to the easy Go & Grow system)
This is an example of a hazardous (portfolio manager) setup for me:
And this is an example of a wrong setup (portfolio pro) for me:
How NOT to use Bondora! ⬆ Setting Bondora portfolio to high risk may not bring to higher returns any soon.
This is precisely where those with no experience and lots of greed, normally fall and risk losing money, too!
These days, 30% is not a return that you can reach without exposing yourself to a high risk. I like to talk about investments here (a moderate to risky investment), not gambling or binary options.
I have learned from others’ mistakes.
This is why I felt the need of being careful and make more productive choices.
If I feel Bondora suits my needs:
I sign up (mail, Facebook, Google)
I safely transfer the sum I’m willing to invest in loans (Visa or bank transfer)
I limit the risks by following my guidelines
I activate Portfolio Manager (or PRO)
I cash in or reinvest the returns
Micro-bonus: When I sign up I can also get a small welcome bonus as soon as I load 10€.
If I want to go up a level and set up a “Portfolio Pro”, I have written something interesting.
Bondora statistically states that 98% of its users have realised positive returns. I am not sure if this is true. What I'am sure about is that to know -how to use it- is making a difference in my results. So far, I'm happy with it. Click To Tweet
If you have found what I wrote to be useful, please say thanks by sharing this article with your followers. I’m sure they’d be happy to read it.
This blog is purely for informational and educational uses (disclaimer). I don’t work for Bondora or any other P2P and I don’t advise anyone to use any of this tools or to make investments of any kind.