We've picked the best and worst P2P loans for August 2019

Our pick of the best P2P loans

This post is part of a regular series where we highlight what we think are some of the best P2P loans 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: 10%

LTV: 26%

Term: 43 months

1st lien mortgage

SOFIA, Bulgaria

Buyback guarantee

This mortgage loan is available on Viventor. We think this loan in particular is interesting because it offers both a very low LTV of 26%, and a ‘buyback guarantee’ from the lender Lenno. We continue to think that the Lenno loans are the top picks on Viventor right now. Investors get the benefit of the loan collateral and also a buyback guarantee, which is rare. Lenno received one of the highest scores in our recent Viventor lender ratings. One final positive characteristic of this loan is the payment history of the borrower. The loan was originated 17 months ago and in that time they have made all their monthly payments and paid down the loan principal by more than 20%.

Interest rate: 14%

LTV: 68%

Term: 42 months

CAR LOAN

BUYBACK GUARANTEE

ROMANIA

We think that Mogo loans offer some of the best value on Mintos currently. Interest rates had been as low as 10% not too long ago but now loans like this can be found at 14%. We think that is a very strong yield given that Mogo’s corporate bonds trade at a yield of around 10% at the moment, and the Mintos loans have the additional benefit that they are directly secured on loans that have cars as direct loan collateral (as well as a buyback guarantee). We also like loans that have a strong payment history, and this borrower has already made 15 consecutive monthly payments.

Interest rate: 15%

LTV: 59%

Term: 12 Months

First Lien mortgage

LATVIA

Sometimes we highlight here loans that sold out almost instantly when they went live. We do this to highlight the types of opportunities that are available on certain sites that can offer good opportunities, but require you to be quick to receive an allocation. This is one of those types of loans. The security for the loan is two decent quality properties located in Latvia. Bulkestate always uses well known, reputable valuation firms and usually has conservative LTVs. This is a good example of what can be found on Bulkestate – a high yield of 15%, a conservative LTV at 59%, and a fairly short duration of 12 months. We think that is a pretty strong combination. Bulkestate has also been increasing the availability of loans recently, so it is worth opening an account and waiting for good deals like this to come along.

Interest rate: 11%

LTV: 47%

Term: 18 Months

First Lien mortgage

ESTONIA

This loan from Estateguru is secured on a boutique hotel and restaurant located in a national park near Tallinn, Estonia. Estateguru reports that is has high occupancy and we can see that it has many customer reviews, with overall good ratings on the site Booking.com. We often dislike loans secured on commercial property as they can be difficult to value and assess the potential demand if the collateral is foreclosed. However we are relatively comfortable with assets like this, which we believe are not too difficult to value accurately and where there would be good demand if it were put up for sale. At a 47% LTV, and an 11% interest rate, it represents a good yield for fairly modest risk.

Interest rate: 7%

LTV: 25-40% Tranche

Term: 12 Months

First Lien mortgage, Tranche 2

London, England

We don’t normally like loans that are secured on high value residential real estate. They can be less liquid, and more difficult to value. However, this property (£2.1m valuation) is located in Maidenhead (near Heathrow, London) and the area is going to benefit from a new Crossrail trainline into central London that opens soon. This property also has a river-front location with a boat mooring which makes it very attractive to potential buyers. This loan has been tranched by Kuflink and we think Tranche 2, with an LTV range of 25-40% and an interest rate of 7% is the most interesting one. Kuflink also provides a 5% additional ‘first loss’ protection on this loan, which should make it ‘Brexit-proof’ unless things get very, very bad….

Interest rate: 9.6%

LTV: 55%

Term: 9 months