How do you select the best loan originators when investing through Mintos? I asked myself the same question, so I made a list for you to help you select the loan originators you want to invest in.
Last update: July 5, 2019
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What did I look at?
Since I started investing on Mintos, I have been reading a lot about the platform and tried to figure out what the best investment strategy is. Which loan originators do I have to avoid and which ones are good and solid?
To answer this question, I looked at a couple of different things:
- The ratings of Mintos loan originators from ExploreP2P
- The ratings of Mintos loan originators from Mintos itself
- Does the loan originator offer a buyback guarantee on it’s loans
- Does the loan originator pay interest on late loans
- Loan originators with a grace period of max 10 days
- The statistics on Mintos, how many % of the loans is paid on time (current)?
Explore P2P ratings
ExploreP2P has rated all Mintos loan originators according to different things, like their financial reports. I think it’s a good list to use.
I decided to go for the loan originators with a score of 50 and above, which gives us a list of 28 loan originators.
Mintos has 10 different ratings, from A+ to D. Since I don’t like to invest in loan originators with too much risk, I only include loan originators with a low to moderate risk. (Explanation about the Mintos ratings can be found here).
Two of the loan originators have a rating below B-:
This leaves us with 26 loan originators.
I don’t invest in loans without a buyback guarantee. The risk is lower with this guarantee, as all loans that are 60 days late, will be bought back by the loan originator and I will get my money plus accrued interest instead of losing my money. You can read more about this in my Mintos review or my ultimate guide to peer-to-peer lending.
1pm plc doesn’t offer loans with a buyback guarantee, so they are off the list and we’re down to 25.
Interest on late loans & Penalty income
Since I want to receive interest on my late loans, I exclude loan originators that don’t pay interest income on delayed payments (IIDP in short):
- EBV Finance
- Cream Finance (only Latvia)
EBV’s loan are always 100% paid on time, that’s why I will keep EBV on the list.
Credit to P2P Millionare for telling me about EBV. He said: “It is because EBV collects VAT rebates from governments and governments tend to be reliable payers.” I didn’t know that yet. So, EBV will remain on the list and we still have 23 loan originators left.
Lots of people like Mogo and they (and Acema) do have a penalty income. So it’s up to you if you want to invest in them or not.
The grace period
Since the grace period doesn’t count as being late, you don’t get any interest over this period (unless a loan goes from grace period to late, then all days do count as late). I don’t want to invest in loan originators that have a grace period of more than 10 days:
This means we are down to 21 loan originators.
The statistics from Mintos show what percentage of each loan originator’s outstanding loans are paid on time (current). I think this is an important score, because if a lot of the payments are late, something might be wrong.
Does the loan originator perform a good background check on his client to make sure he can actually pay the loan back? Can the loan originator keep up with the buyback guarantee if a high percentage of the loans are paid late or never paid at all?
Combining everything, we have 21 loan originators left. These are the loan originators I feel comfortable with investing in. To give you an overview, I added all of the loan originators with an ExploreP2P rating of at least 50 in a table and added the other variables I looked at.
The red loan originators are off my list due to one or more of my criteria. In the end it’s up to you of course which loan originators you want to invest in.
|1pm plc||81||A||No||No||0||5.3 %|
|ID Finance||81||B+/B-||Yes||Yes||0 - 3||89.4 %
|Credit Star||79||B||Yes||Yes||0 - 3||79.2 %
|Banknote||77||A-||Yes & No||Yes||3||77.2 %
|Iute Credit||77||B+||Yes||Yes||7||77.9 %
|Mogo||71||A||Yes/No||No||0 - 4||66.3 %
|Placet Group||71||A-/B+||Yes||Yes||0 - 2||67.6 %|
|Cream Finance||67||B||Yes||LV: No|
Rest: 0 - 3
|Kredit Pintar||66||B+||Yes||Yes||0||93.4 %
|LF Tech||66||B-||Yes||Yes||0||64.8 %|
|Capital Service||65||B-||Yes||Yes||3||76.5 %|
|Lime Zaim||65||B||Yes||Yes||0||58.8 %|
|EBV Finance||63||A-||Yes||No||0||100 %|
|BB Finance||62||A-||Yes||Yes||3||75.2 %|
|Acema||61||A-||Yes & No||No||3||84.8 %|
|IFN Finance||60||B||Yes & No||Yes||3||26.1 %|
|Aforti||50||C+||Yes & No||No||1||69.3 %|
Last update: July 5, 2019
Hopefully you can use this list to your advantage. I will try to keep this list up to date. If you see anything that is incorrect or missing, please leave a comment below and I will update the list accordingly.
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