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
Link
Interest rate: 17%
LTV: 62%
Term: 10 months
1st lien mortgage
RIGA, latvia
Wow. 17% interest is the highest interest rate we have seen this year on a secured property loan in Europe. This is also the biggest loan that BulkEstate has had on its platform so far. This looks like an interesting deal. It is secured on real estate in a central location in Riga, Latvia. The borrower plans to do some light renovations and then sell the apartments individually. This is a relatively low risk type of development, and the renovation works will add value to the collateral. The low LTV of only 62%, and first lien ranking of the loan further reduces the risk.
Loan Marijas
Interest rate: 10%
LTV: 19%
Term: 46 months
1st lien mortgage
Provdiv, Bulgaria
Buyback guarantee
This mortgage loan is available on Viventor. It is the first time we have included a Viventor loan in our ‘loans we love’ series. We think this loan in particular is interesting because it offers both a very low LTV of 19%, and a ‘buyback guarantee’ from the lender Lenno. It’s quite unusual for investors to benefit from a buyback guarantee on a secured loan like this. 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 15 months ago and in that time they have made all their monthly payments and paid down the loan principal by more than 20%.
Loan 245238
Interest rate: 15-17%
Unsecured
‘B’ Grade loans
Term: 48-60 months
Lithuania
Finbee is a small P2P investment site based in Lithuania. It has been growing however and have received some good reports from investors. The key thing about Finbee is that unlike many P2P investment sites, the loans come without a buyback guarantee. That tends to mean returns can be higher, but there is more potential risk. That makes it important to diversify, and to expect some loans to go bad. We have obtained from Finbee management some data on historic default rates (90+ days in arrears) by year and by risk grade (available here). To us, the B grade consumer loans look particularly interesting based on this data. They have had consistent default rates of around 2-3%. Interest rates of 15-17% can be found, which looks attractive compared to the default rate history of these loans.
Loan 'Ausra83'
Interest rate: 12.5%
Term: 3 months
Personal loan
Indonesia
Many of our readers have an account with European site Mintos, and we constantly look for loans that offer a good balance between lender quality and return. Kredit Pintar is the most recent lender to join Mintos. It is based in Indonesia, and is strongly profitable. It has also been backed by several leading investors and has a very strong balance sheet currently. It received an initial score of 66 in our Mintos lender ratings. Loans like this can be fund on the primary market currently at a yield of 12.5%, which we think is a good return for the risk. These loans also provide some geographical diversification, as many Mintos lenders are based in Central and Eastern Europe.
Loan 15685230-01
Interest rate: 6.7%
LTV: 63%
Term: 5 Months
First Lien mortgage
London, England
Last month we highlighted a loan from Kuflink as one that we didn’t love. That was a second lien loan with a 75% LTV and over-valued collateral. This loan from Kuflink shows how much better loans can be found on this site if you are patient. For a similar interest rate, this loan is a first lien loan, and has a lower LTV of 63%. The borrower has recently purchased the property (located in London), so the recent valuation of the property is known. The borrower is seeking a change of licence for the property, and this loan will be refinanced once this is received. We like loans like this because they are boring, easy to understand, and the risks are limited.
'The Drive' loan
Interest rate: 9%
LTV: 64%
Term: 7 months
2nd lien mortgage
England
This is a pretty common type of loan that we see on Bridgecrowd. A business owner needed some funds to place into their business. They owned a rented investment property. The property had a very small mortgage (20% LTV), and Bridgecrowd was able to take offer a short term second mortgage on the property. A return of 9%, for an LTV loan of only 64%, with only a small first lien loan ahead, makes this loan attractive in our view. The borrower has also provided a personal guarantee, may have some value (if needed) as the borrower owns other properties, and a business. This loan sold out very quickly but we have included it in our list to show the types of loans that Bridgecrowd offer, which we are fans of. If this type of loan is appealing, you will need to register as an investor and act quickly once new loans are released, as the demand is very high. The one downside of Bridgecrowd is that the minimum investment in each loan is £5,000, so it suits investors with larger sums available to invest.
'Malden Ave' loan
And here is one we DON'T love....
Interest rate: 4.5%
LTV: 92% (?)
Term: 4 years
2nd lien mortgage
Leipzig, Germany
Rendity is a fairly new P2P site that focused on highly leveraged real estate loans secured on properties in Germany and Austria. The quality of the collateral tends to be very high. It’s the low returns, combined with very high leverage that makes it hard for us to recommend. This loan is secured on two properties in Leipzig, Germany. While the LTV stated is 92%, it appears to actually be over 100% once certain costs that were added to the purchase prices are excluded. In other words, investors are being asked to accept almost all the downside risks, with no upside, for a 4.5% yield. That doesn’t sound like a great deal to us.
Wohnhauser loan
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.
Personally I still like Mintos the most.
The returns are aligned with the crowdlending market average (11-12%) and the platform is I believe safer than many others that aren’t profitable, have a small track record or have a junior team.
Another interesting platform but riskier is Crowdestor.
Do you still like the loans from Banknote? You recommended them a couple of months ago when they were yielding around 11%, do you still like them now yielding over 14%? I bought some a couple of days ago yielding 14.3%!