Bondora Review (5/2022)
2.8 of 5Bondora € 5 Bonus
Interest and costs
Flexibility and conditions
Support and service
Average Returns between 6.75 % and up to 12 % p.a.
- Investors can earn a return between 6.75% (Bondora Go and Grow) p.a. and up to 12% p.a.
Bondora is one of the oldest and most established P2P platforms.
Free of charge for investors
No buyback guarantee
- All loans on Bondora are offered without buyback guarantees. This is a disadvantage for investors, as they cannot leave the collection process for delayed loans to the platform.
Weak performance during corona crisis
- During the Corona crisis, an investment limit of €400 was introduced for Bondora Go and Grow. Also, during the Corona crisis, the platform could not keep its promise that investors could withdraw their money from Go and Grow daily. The investment limit is still in place today and, in our opinion, severely restricts investors.
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We tested the peer to peer platform Bondora.
If you want to know:
whether it is worthwhile to sign up as an investor on Bondora,
how Loans are offered on Bondora,
what experiences investors have had with the platform,
how you can invest in P2P loans on Bondora,
then you will love this test.
Let's get started.
Table of contents
Introducing Bondora as a P2P platform
Bondora (Bondora Capital OÜ) was founded in 2009 during the financial crisis by Pärtel Tomberg. The platform is based in Tallinn, Estonia and is supervised by the Estonian Financial Supervision Authority.
Bondora Capital OÜ at a glance
More than 140,000 investors
Approx. 400 million euros in loans issued
Lending in Estonia, Finland and Spain
Investors can only invest fully automatically
Expected returns are between 6.75% p.a. and 12% p.a.
Investments from as little as 1 euro
Secondary market is available
Simplified tax certificate is offered
Who can invest on Bondora?
Individuals living in a country of the European Economic Area can invest on Bondora. Investors from other countries can be admitted by Bondora if they have sufficient assets or income.
At present, it is not possible for companies to invest on Bondora (as of February 2021).
How P2P loans are offered on Bondora
Loans on Bondora are brokered directly by the platform.
Borrowers must apply directly on the website. Loans are granted only to people residing in Estonia, Finland or Spain.
You can take a look at the online application process on Bondora's Estonian page.
When granting a loan, Bondora requires certain information from potential borrowers, including:
Information about liabilities
These are typical details that banks also ask for during the lending process. Once the loan has been granted successfully, it is then offered on the platform.
A special feature of Bondora is that you cannot individually select the loans you want to invest in. You have to invest via fully automated strategies.
Ratings on Bondora
Bondora has established AA, A, B, C, D, E, F and HR ratings to classify the risk of loans. A loan with a rating of AA has the highest creditworthiness and the lowest risk, while the opposite is true for loans with a rating of HR.
Collateralization of loans on Bondora
The platform offers unsecured consumer loans.
Experiences of Investors with Bondora
Bondora was founded during the financial crisis in 2009, which is why a great emphasis was placed on stability from the very beginning. There are few other European platforms that have been on the market as long as Bondora.
Bondora's investment products meet necessary minimum requirements and the main product "Go and Grow" works with a risk buffer. How this works in detail was explained by CEO Pärtel Tomberg on YouTube at the beginning of the Corona crisis.
Direct brokerage of loans on Bondora
What investors also like about Bondora is that the platform does not use loan originators.
Loan originators are non-banks that provide loans. The loans are then offered to investors via platforms. This creates another risk for investors on top of the other known risks of P2P lending. If a loan originator goes bankrupt, all loans that were brokered through that loan originator can be irretrievably lost.
On Bondora, investors do not have to worry about this risk. Likewise, the platform reports regularly and very transparently on the current developments within its loan portfolio.
The platform is monitored by the Estonian Financial Market Authority, which is not the case for all comparable platforms to date. Furthermore, the platform's annual report shows that it operates profitably and sustainably. In addition, it is very easy for investors to invest on Bondora. Investors only have to choose a suitable investment product and the platform takes care of the rest.
Since 2009, many investors have had very positive experiences with Bondora. There is no other way to explain that the platform is still there.
The transparency, the automatic investment products and the robustness during past crises make Bondora a very interesting platform especially for beginners.
How did Bondora perform during the Corona crisis?
At the beginning of the Corona crisis, many investors wanted to exit their P2P loans, which also presented Bondora with major challenges.
Bondora offers its investors the "Go and Grow" product, which allows investors to earn a return of 6.75% p.a. and get their money back every day.
However, the product has a flaw. If many investors want out at the same time, not all of them can be paid out immediately. Bondora Go & Grow invests in a loan portfolio that consists of thousands of loans with different maturities and ratings, which is why only limited liquidity is available on a daily basis.
Therefore, during the crisis Bondora was forced to curb payments, but in the end all investors got their money. Nevertheless, some investors felt cheated and railed against the platform, as Bondora had previously advertised daily availability of the invested capital.
After the Corona crisis calmed down again, a countermovement set in and investors were eager to invest in P2P loans on Bondora again.
The platform itself responded by rationing its "Go and Grow" product. Currently, only €400 per investor per month can be invested (as of February 2021). Just as at the beginning of the crisis, when many investors felt cheated, the same investors were appalled that it takes them too long until they can fully invest their money again.
The temporarily reduced supply is explained by the fact that the platform has stopped or sharply reduced lending in Finland and Spain, which is why there are fewer loans available to investors.
In summary, Bondora has done well during the crisis. While some investors were also a bit incensed that they did not get out of their loans immediately (daily) as promised, overall, there were no major disappointments.
Therefore, it can be expected that Bondora will actually benefit from the crisis in the long run, as it has proven its crisis resilience.
Advantages and disadvantages of Bondora
Investing on Bondora is very easy. You can choose from three fully automated investment products.
Bondora takes care of the entire process. If borrowers don't pay their loans, the platform collects the outstanding money.
Investors pay virtually no fees. There is only a low fee of €1 charged on withdrawals.
You can exit your investments very quickly at any time. The product Bondora Go and Grow actively advertises this benefit. If you invest through the other investment products, you can exit quickly through the secondary market.
Very transparent reporting on lending.
You can't choose which loans you want to invest in. You select a product and specify your terms, then it automatically invests.
All loans are unsecured. To be fair, we should mention that this is the norm for short to medium term loans.
If the platform goes bankrupt or loans default in rows, you can lose a high percentage of your money.
The loans are offered without buyback guarantees, but this can also be seen as an advantage, as buyback guarantees can give investors a false sense of security.
Register as an investor with Bondora
Get a bonus from Bondora when you sign up with our exclusive referral code. Find out more here.
1. Register as a user on Bondora
First you visit the website and click on Register ("Join now"). Then enter your e-mail address, first and last name and cell phone number.
The mobile number must be correct. You will receive an SMS with an activation code during the registration process.
2. Activate your e-mail address
You will then receive an email from Bondora to verify your email address and set a password. Click on the green button in the email and follow the instructions.
3. Verify your bank account and yourself
After logging in, you will need to provide some identification information. You need to verify your bank account and yourself. This can be done online and is done in less than 5 minutes.
The verification is completed with a few more personal details.
Deposits and withdrawals at Bondora
All deposits and withdrawals at Bondora are made through a central account. The deposits are thereby assigned to the users via the reference text.
If you want to deposit money, click on the button "Deposit" after you have logged in.
You will be shown how to deposit money to your account by making a bank transfer.
It is important that you specify the purpose of the transfer (reference text) correctly.
It can take up to three days until you see the deposit on your account. If you do not see the money with 4 days, you should contact the Bondora support.
To withdraw your money from Bondora, you must first transfer the desired amount from your investment account to your wallet (account) at Bondora.
To do this, click on your account, for example Bondora Go & Grow and click on "Transfer to wallet". After that, select the amount you want to transfer.
Now click on the "Withdraw money" button in the left menu, select the amount and click on "Confirm".
Invest in P2P loans on Bondora
No other platform allows you to invest in P2P loans as easily as on Bondora.
The platform offers its investors three investment products with different risks and returns.
The most important product of Bondora is undoubtedly Go & Grow.
Bondora Go & Grow
Go & Grow is Bondora's main product. Investors should be able to invest in P2P loans as easily as possible and get their investments back quickly (daily liquidity).
With Bondora you can expect a return of 6.75%.
With Go & Grow, Bondora takes care of the entire investment process. You can't make any adjustments.
You can find more information on this product on our dedicated page, Go & Grow.
Bondora Portfolio Manager
With the Portfolio Manager, you can choose different investment styles. The main difference between the investment styles is the risk-return ratio.
You can choose between:
Therefore, if you want to avoid risks, it might make sense for you to invest via the Portfolio Manager with the "ultra-conservative" or "conservative" setting.
Bondora Portfolio Pro
The Portfolio Pro allows you to make the most adjustments.
For example, you have the option to exclude countries and risk classes (ratings of loans).
With Portfolio Pro, you can also choose between three investment styles:
An interesting advantage of this product is that you also have the possibility to control the maximum investment per borrower.
Secondary market on Bondora
What returns can investor expect on Bondora?
On Bondora you can expect returns between 6.75% p.a. (Go and Grow) and 12% p.a. (Portfolio Manager and Portfolio Pro).
Be aware that the more risk you take, the higher the probability that loans will default.
What costs and fees does Bondora charge investors?
As an investor, you can invest on Bondora for free.
Only for withdrawals Bondora charges you a fee of €1.
Can you automatically invest in P2P loans on Bondora?
On Bondora you can only invest in P2P loans automatically. You can choose between three investment products: Go and Grow, Portfolio Builder and Portfolio Pro.
Can you select individual loans on Bondora?
No, this is not possible on Bondora.
Risk of investing on Bondora
Investing on Bondora is associated with risks. The platform brokers consumer loans that can default.
If you tend to invest in loans with a higher rating, you can reduce the risk of default. However, it is not possible to invest in loans without defaults, they are part of the lending business.
How reputable is Bondora?
Bondora has been on the market since 2009 and has been through two major crises. The company is supervised by the Estonian Financial Market Authority and operates profitably.
Accordingly, Bondora can be considered a reputable platform.
Does Bondora offer a statistics page on the loans?
Yes, Bondora is even one of the P2P platforms that offer a very detailed statistics page.
Is the annual report of Bondora publicly available?
Yes, the annual report of Bondora is publicly available.
What is the default rate on Bondora?
Default rates on Bondora vary greatly between individual ratings. For example, default rates for loans with ratings between A and AA are less than 5% and then gradually increase to 30%.
Historical figures from Bondora have shown that default rates across all loans originated range from 20% to 25% per year.
Is a buyback guarantee offered on Bondora?
Loans on Bondora are offered without a buyback guarantee. However, this does not have to be a disadvantage. Buyback guarantees on loans can give investors a false sense of security.
Are the loans on Bondora protected by deposit insurance?
No, the loans on Bondora are not protected by the deposit insurance such as the FDIC insurance.
Paying taxes on income from P2P lending on Bondora
The platform supports its investors in taxing the income.
Prepare tax report on Bondora
To prepare your tax return, you can generate a tax report under the menu item "Reports".
Bondora will then provide you with a statement of your income (and losses). After that, you only have to enter these figures in your tax return.
Result of our Bondora Review
Overall, we rate Bondora as a good platform that makes it as easy as possible for investors to invest in P2P loans. This is especially beneficial for beginners. Bondora Go and Grow's yield of 6.75% p.a. is below average compared to other platforms. Although investors can try to achieve higher returns with Bondora Portfolio Manager or Bondora Portfolio Pro, Bondora's core product is Go and Grow.
We consider it very positive that the platform is officially regulated, reports in great detail on its statistics page about lending and that the annual report is also publicly available.
However, during the Corona crisis, Bondora's core product, Go and Grow, made it clear to many investors that daily liquidity with P2P loans is practically impossible to sustain. During the Corona crisis, an investment limit of €400 was introduced for Bondora Go & Grow, which is still applied today, severely limiting investors. Furthermore, many investors complain that even today they sometimes have to wait for weeks until they get their investment capital paid out.
Overall, we would therefore only recommend Bondora to new investors with restrictions. As soon as the investment restriction of €400 for Bondora Go and Grow is removed and investors also get their invested capital in the short term, as promised by Bondora, we would recommend Bondora without restrictions.
Despite all the difficulties during the Corona crisis, Bondora can position itself among the best platforms in our P2P loans comparison. In the long run, we assume that the platform will find its way back to its old strength.
Whether you agree with our test about Bondora, you can only find out yourself by trying Bondora as a platform.
If you sign up with our exclusive bonus link, Bondora will credit your account with €5 after your registration.
As soon as you have made your experience with Bondora, we would be happy if you share your opinion with us.