My opinion on Bondora
If the interest rate can be very high, the resulting default rate is correlated; as such, the final performance is deceiving.
A huge volume of loans is available on Bondora.
Many statistics are available, but they’re not really useful.
There’s no buyback guarantee.
The website is overall pleasant to use.
1 month – 1 year
More than 1 year
NO buyback guarantee available
Secondary market available
Bondora's pros and cons
Who can invest
Anyone over the age of 18 living in the European Union, Switzerland or Norway and businesses registered in the EU or from any other country approved by Bondora. If you are an investor from Australia, Brazil, Canada, Hong Kong, India, Japan, South Korea, Mexico, Singapore, South Africa or The United States of America then we need to verify that you are an “accredited investor”. As part of the verification process we ask you to send us different information and documents.
Overview of Bondora
Bondora is an Estonian P2P lending company. They provide unsecured loans with a simpler approach than most competitors. Three investing mechanisms are available :
- Portfolio Manager, where you only have to choose a profile from “Ultra-conservative” from “Opportunistic”
- Portfolio Pro, which is basically the save as the auto-invest at Bondora’s competitors
- Go & Grow, a very simple product targeting a 6.75% annual return. I will review this one separately later.
Most P2P lending sites allow you to specify at least a risk level and a desired interest rate and often have a granularity by country. Unlike those, Bondara only lets you choose an investment profile, and gives you an estimation of the expected return.
This estimation should really be taken with a pinch of salt; I have yet to read a review of Bondora where the expected returns were met.
This feature is actually an auto-invest. It allows you to configure the desired country, borrower’s rating, loan duration and maximal investment by broker. Given these parameters, it estimates the returns and matching loans volume.
Browsing the website is straightforward and it’s easy to find what you need.
There are many reports available, including a handy cashflow planning. Here’s a sample of what you’ll find on the statistics screen :
You also have the opportunity to create reports like the list of your investments, account statement, tax report… and export them as Excel files. That’s very handy for those who want to compute statistics themselves !
Actual performance of my Bondora portfolio
Initially, the expected performance of my portfolio was above 16%. In reality, it’s currently below 12% and sinking a bit more every month. Bondora’s advise is that investors should keep on investing, as recoveries are supposed to improve the performance later. I’m totally unconvinced by this response, and started cutting the size of my portfolio.
If only Bondora spent as much time improving the returns as they spend working on their marketing, all their investors would be rich. But for now, all we have is promises of great expected returns. I’d advise investors not to listen to their marketing tricks, and to invest through a company that actually focuses on investors.