I already published an article listing my favorite platforms a few months ago. However, things change quickly in the peer-to-peer lending area, so here’s the updated version !
I decided to drop Omaraha from the list. While it my still be possible to get great returns there, the low volume of available loans and complexity of the website make it hard for me to recommend it anymore. It’s a pity as I really loved this platform (I still have around half of my portfolio invested there), but I don’t really see much opportunity in the near future.
Mintos is still here but basically in probation. Indeed, there have been recent changes for their originator Mogo, which used to provide a large part of Mintos loans; they bought back many loans with high interest rates, and greatly reduced the interest rates on new loans. As a result, most currently available loans only yield 11.5% at most (with a buyback guarantee), much lower than the previous 14%. We’ll see if this is just temporary of if the situation lasts.
Overall, this incites me to move more of my funds out of peer-to-peer websites and into real-estate and business crowd-lending. While most of these loans don’t come with a buyback guarantee (apart from Grupeer’s), their expected returns are great.
P2P lending platforms
Loans to individual are still the largest part of my portfolio. While these loans usually yield less than business or real-estate loans, they’re generally considered safer (most of them come with a buyback guarantee [?]).
RoboCash didn’t make it to the previous edition; however, with the recent changes at Mintos, I think it deserves to be there.
They used to have liquidity troubles in the past, but now the loans volume has greatly increased. They just added a new originator from Kazakhstan, which should improve the situation even more. Most of their loans are payday loans, offering a 14% yearly interest rate for a one-month duration; however, they also offer loans with duration up to one year, yielding slightly more (14.5%).
The platform’s only drawback is the interface; it’s not as intuitive as its competitors, and the translations could be improved.
Mintos is probably the leading P2P platform, thanks to their huge variety of originators. They allow to invest in basically any kind of loan and duration you could think of, in many currencies.
For a while, investing through Mintos was a no-brainer. Their secured loans offered great returns and there were huge amounts available. However, the recent changes at their leading originator Mogo may bring to interests rate down from now on.
Real-estate and business crowdfunding platforms
These projects usually involve much larger amounts than P2P loans, and the loan duration is usually longer. With the exception of Grupeer, they don’t come with a buyback guarantee; however, they’re usually secured by some kind of collateral, which provides some security should the borrower default (see my article about possible outcomes).
This increased risk compared to a buyback guarantee is usually compensated by higher expected returns; for example, most of Envestio’s projects offer a 18% annual return.
Grupeer was my favorite platform a few months ago, and remains my top choice.
I previously included them in the P2P lending section, but they actually provide only business and real-estate loans. However, all of their loans currently come with a buyback guarantee. Combined with 14% or 15% interest rates, this makes them excellent investment opportunities.
Although CrowdEstate platform is somehow victim of its success, it obviously remains an excellent choice for real-estate and business crowdfunding.
This platform is the undisputed leader in its field, trusted by nearly 20 000 investors. They list many successfully exited projects, and recently expanded into Italy. Paradoxically, the platform’s main drawback is its success. It’s unfortunately getting hard to invest large sums there, because of their large investors base. The recent introduction of a secondary market only made things worse by encouraging speculation.
I’m truly impressed by Envestio‘s projects; although they don’t have the seniority of CrowdEstate, I think they deserve to be listed here.
What’s not to love about Envestio ? Their projects are very diversified, and offer great returns – more than 20% for some loans -; the financed amounts are large enough to be able to invest large sums. As an added bonus, although there’s no secondary market, it’s possible to sell your investments back to Envestio – for a fee, of course -.