Loans we love (and some we hate) – our pick of loans for October 2018

Our pick of the best P2P loans currently available

 We list below what we think are some of the best P2P loans currently available in the UK and Europe. These loans may sell out very quickly. Even if they do, it is likely that similar opportunities are available on each platform.

Our goal is to help highlight the types of opportunities that are available on various platforms, and which types of loans offer the best balance of risk and reward.

Description

Why we like it

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Interest rate: 16%
LTV: 70%
Term: 12 months
1st lien Mortgage
Latvia

Bulkestate is one of the smaller European P2P sites but it regularly offers loans that have high interest rates and are secured on quality collateral assets such as this one. Bulkestate loans tend to sell out quite quickly, so it is worth joining their platform and waiting for the best new loans to go live. This particular loan has not launched yet, and they have not provided all of the information about the loan yet. However we do know that it is secured on a high specification new property, located in a premium resort location (Jurmala, which is 30 minutes from Riga, Latvia).  While the LTV is relatively high at 70%, an interest rate of 16%, and the high quality of the collateral places this high on our list of interesting opportunities right now.

bulkestate logo

Loan "Sun Terraces"

Interest rate: 10% 
LTV: 25%
Term: 71 months
1st lien Mortgage (Fully amortising)
Lithuania

Most loans on the Mintos platform currently have interest rates in the 9-10% range. The quality of the loans available however, can vary a lot. We are fans of loans such as these from Hipocredit. It is secured by a 52 sqm flat in a fairly new development in Kretinga, Lithuania. The LTV is only 25% and the loan will fully amortise over the next 71 months. We think it’s important to review payment history before buying loans without a buyback guarantee (if it is available). In this case, the borrower has successfully made all 12 monthly payments since the loan was originated. A strong payment history, low LTV and an interest rate of 10% makes this worth considering.

Mintos logo

Loan 1817326-01

Interest rate: 11%
Term: 1 months
Unsecured with buyback guarantees
Czech Republic and Poland

As mentioned above, we have noticed recently that all of the lenders on the Mintos platform with strong ratings now have interest rates of 10% or less. That makes competing platforms, such as Peerberry worth considering. Peerberry is an excellent site that has been growing the number of lenders on its platform during the year. We recently interviewed their CEO, Ausra Ciupliene. We are particular fans of the 11% loans that can be found on Peerberry from the Aventus Group subsidiaries in Poland and Czech Republic. The Aventus Group is an established, profitable lending group that also owns the Peerberry platform. We think that the Poland and Czech Republic markets to be much lower risk than many of the Mintos lenders are operating in. 

PeerBerry logo
Interest rate: 10.2%
LTV: 67%
Term: 12 months
2nd lien mortgage
England

We continue to think that Bridgecrowd loans offer some of the best risk adjusted returns anywhere in P2P at the moment. They have a minimum investment of £5,000 for each loan, but for investors who are lucky enough to have larger amounts to invest, Bridgecrowd is currently the place to be in our view. That being said, it’s still pays to be selective about which loans to invest in. We favour loans secured against residential housing with medium to lower values, as the market for high value properties in the UK is currently very slow. The collateral of this loan is based in Cambridgeshire. We like the low LTV of 67% and also that the borrower owns multiple properties, which in our view reduces the likelihood of a loss from any default. Loans like this sell out within hours (sometimes just minutes) of being listed on Bridgecrowd, and that’s because they offer excellent returns versus risk.

Bridgecrowd logo

'Maydea' loan

Interest rate: 6.1%
LTV: 18.4% 
Term: 13 months
1st lien mortgage
England
 

This loan from Kuflink is great for people who are looking for a very safe investment, but want to still earn a reasonable level of interest. It is secured against a 27 room hotel in Northern England. A quick check online shows that it has fairly good reviews and appears to be a busy hotel. We tend to not get too excited about loans secured by commercial real estate, but with an LTV this low, and an asset that seems to be performing well, we think this can be put in the category of invest and ‘sleep easy’. Note: Kuflink are also currently offering quite a generous £100 bonus for new investors who use our special link (see our bonuses page for details)

Kuflink logo

'Brampton Road' loan

Interest rate: 7.0%
LTV: 50.7% 
Term: 12 months
1st lien mortgage
England
 

This is a fairly simple loan to analyse. A couple with a good credit rating have purchased a house. Their plan is to renovate it, and then rent out the house. There is also land adjoining which can be rented to horse owners. While we currently prefer loans secured by properties with lower values, we think the LTV of only 50.7%, and the fact that renovations are going to be performed, means that this is a relatively low risk investment. The 7% yield is a reasonable return for this risk level. 

Loan #826

And here is what we DON'T love right now....

Interest rate: 10% 
Term: 19 days
Personal loan
Macedonia
 

Mintos regularly adds new lenders to its platform. Some score well in our Mintos lender ratings, but others such as Macedonian lender Tigo.mk are perfect examples of the types of lenders we think investors should steer well away from. While management seem capable of producing a decent powerpoint presentation, it glosses over important things such as being a startup with almost no lending history, a tiny amount of equity, losses in the P&L and so on. Professional investors nearly always receive free equity options for providing funding to new lending businesses. In this case, Mintos investors have none of this type of upside, but all the downside if the business is not successful. The 219% borrower APR shows this is high risk lending, but neither Mintos, or its investors have any way of knowing yet whether Tigo can successfully manage these risks.

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Loan 5864621-02

If you are interested in any of the loans above, please make sure to read all the information provided by each investment site and make sure that they are suitable for you. While we aim to highlight interesting opportunities, you must perform your own assessment of the risks and decide whether these, or similar loans offered on each site are suitable for your investment objectives.

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