6 Min. Read

Bondora Review: Is it good? Don't invest before you read this! (11/2022)

Bondora

Bondora

A.H.Tammsaare tee 47, 11316 Talinn

Test result

4.2 of 5

€5 Bondora Bonus Code

Safety

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5.00

Interest & Risks

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3.50

Features

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4.00

Advantages

  • Regulated

  • Experienced platform

  • Invest free of charge

  • Automatic investment function

  • Secondary market

  • App

Disadvantages

  • Comparatively low Ø interest rates

  • No buyback guarantee

How good is Bondora?

If that's what you want to know, then keep reading.

We took a close look at the platform and tell you whether it's worth it.

In this test, we show you:

What is Bondora?

Infographic: how does Bondora work

Bondora is a P2P platform based in Tallinn, Estonia, founded in 2009.

The P2P loans offered on the platform are originated by the platform itself under the same name.

Since its inception, the platform has funded more than €650 million worth of loans and is one of the larger P2P platforms in Europe.

How does Bondora work?

To invest on Bondora, you must first register online and then deposit money via a bank transfer.

With your first deposit via a standard bank transfer, you also confirm the bank account to which withdrawals can be made.

After that, you can start investing right away.

On Bondora you have to invest at least €1, and you also have to keep in mind that you can only invest automatically.

You can choose between three investment programs:

Furthermore, you can invest in two markets on Bondora, the primary market (initial issuance of loans) and the secondary market (loans from other investors).

However, you can only invest in the secondary market if you invest through Bondora Portfolio Pro.

In our opinion, only Bondora Go & Grow is exceptional in these investment programs. Some similar is also offered by iuvo under the name iuvoSave.

What is Bondora Go & Grow?

Simply put, Bondora Go & Grow is just about a simple way to invest in P2P loans where the money is (supposed to be) available daily.

But for that, you have to accept a big discount in interest rates, which in our opinion does not justify using the program.

Features

In the following, we would like to present the most important features of the platform.

Regulation

Bondora is officially supervised by the Estonian Financial Market Authority FSA, but not according to the regulations of the European Directive 97/9/EC.

Despite regulation, the platform does not offer investor protection up to €20,000.

Loans

On average, the loans have an interest rate of 9.00% and loans are offered with a minimum interest rate of 5.00% to a maximum of 13.00%.

A comparison shows that the average interest rates are below average and there are several platforms that offer higher interest rates.

These include Mintos with about 11%, viainvest with about 13% and also Lendermarket with about 14%.

On Bondora, you can only invest in consumer loans from Estonia, Finland and Spain.

Estonian loans have the largest share in the offer with about 50% and the terms range from 3 to 60 months.

To assess the risk of each loan, the platform assigns risk classes (ratings) from HR to AA (low risk).

Manual investing

On Bondora, you cannot individually choose the loans you want to invest in.

This is at least true for the primary market.

The situation is different on the secondary market, where you can choose the loans individually.

Bondora Go & Grow (Unlimited)

Go & Grow vs. Unlimited

Since August 2022 Bondora Go & Grow is only available for existing customers.

All others can use Bondora Go & Grow Unlimited.

This is basically the same, but with a low-interest rate of 4%.

Bondora Go & Grow offers an interest rate of 6.75% and Unlimited only 4% interest with daily availability.

The basic idea of Go & Grow is similar to a mutual fund.

You let the platform do the investing, and how the money is invested is reported quarterly on the blog.

How would we evaluate this?

For investors who actually don't want to deal with their investments, the offering is fine.

However, we rate 6.75% and 4% as far too little for investing money in P2P loans.

And by the way, we do not see the advantage of daily availability, especially since the platform also has a secondary market.

Furthermore, during the Corona crisis, it became clear that the money was not available daily: many investors waited for weeks for their money (but did not lose any money either).

In our opinion, the other two investment programs are preferable to Bondora Go & Grow.

Bondora Portfolio Manager

Bondora Portfolio Manager

With the Portfolio Manager, you can choose between 5 different investment styles, which are differentiated by return and risk:

  • Ultra-Conservative,

  • conservative,

  • balanced,

  • progressive and

  • Opportunistic.

Bondora Portfolio Manager balanced

In this context, we noticed that even the investment style "Ultra-Conservative" still offers significantly higher interest rates than Bondora Go & Grow.

For our concrete example, we were shown an average interest rate of 9%, with a minimum of 5% and a maximum of 13% (converted from the possible amounts in %).

Much higher interest rates than Go & Grow (Unlimited)

This is almost twice as high as the interest rate of 4% at Bondora Go & Grow Unlimited.

Bondora Portfolio Pro

Bondora Portfolio Pro

Bondora Portfolio Pro reminds us a lot of the Auto Invest feature, which are also offered on pretty much all other platforms.

You specify which loans you want to invest in with different settings.

The most important ones in our opinion are:

  • Country,

  • rating,

  • Loan term and

  • Maximum investment per borrower.

Bondora Portfolio Pro settings

With Portfolio Pro, you are immediately shown which loans you wish to invest in and which interest rates you can expect.

You can see this clearly in the example.

For example, if you would invest only €5 per loan and exclude the riskiest ratings E to HR, you could achieve interest rates of about 6% to 14%.

Furthermore, it is also shown how much you would invest per month.

Thus, the Portfolio Pro shows the same picture as the Portfolio Manager.

You can achieve much higher interest rates than with Bondora Go & Grow (Unlimited) and you can also manage the risks much more precisely.

Buyback Guarantee

On Bondora all loans are offered without Buyback Guarantee.

This means that delayed loans remain in your portfolio and are not bought back early by the platform.

Secondary Market

On the secondary market, you can offer your loans to other investors or buy their loans from others.

The secondary market is clearly arranged, and you can invest in a loan with just one click.

As already mentioned, you can only choose your loans on the secondary market.

But while otherwise you can only invest automatically, again you can't invest automatically on the secondary market.

We actually find that a bit odd, but you can still use that to your advantage.

Tax report

On Bondora you can easily create the documents for your tax return.

A tax report is offered for each year, which you can download.

App

Bondora Go and Grow App

No app is offered for the platform itself, but there is a native app for iOS and Android for Bondora Go & Grow.

However, the modest reviews on the Google and Apple stores suggest that most users rate the app as less useful.

How much does investing on Bondora cost?

Bondora is almost completely free for investors to use.

Only withdrawals are subject to a fee of €1.

Warning signals (red flags)

Currently, we have not noticed any warning signals at Bondora.

Bondora Bonus

If you want to get a bonus of €5 on Bondora, you just have to register for it via our bonus link.

€5 bonus on Bondora

Frequently asked questions

Below, we address some questions that are often asked about Bondora.

Bondora is officially supervised by the Estonian Financial Market Authority and has successfully funded loans on a considerable scale.

For these two reasons mentioned above, we rate Bondora as safe and also assume a legal business model.

How does Bondora make money?

Bondora earns its money mainly through interest income, commissions and other income from operations.

Since virtually no fees are charged to investors, this is the only source of income.

Who owns Bondora?

The exact ownership structure is not known.

However, we assume that the majority share is held by the founders Pärtel Tomberg, Mihkel Tasa and Martin Rask.

Other shares are held by Supervisory Board members Joao Monteiro, Mati Otsmaa, Phil Austern and by the financial companies Valinor Management LLC from the USA and Global Founders Capital GmbH Co from Germany.

Expert conclusion

Bondora is a safeP2P platform with an official regulation and a financed loan volume of more than 650 million €.

For investors, it is almost free to use, except for the payout fee of €1, which in our opinion can be neglected.

With three investment programs, the platform offers a suitable option for every type of investor to automatically invest in the offered loans. As we have shown, we would prefer the Portfolio Manager and Pro over Go & Grow (Unlimited).

The platform shows the greatest weaknesses in the average interest rates, especially in comparison with other platforms.

Overall, we consider the platform recommendable.

Together with Mintos, we consider Bondora to be one of the established platforms with which investors can build up a basic investment in P2P loans.

And this even though we dislike Bondora Go & Grow at all, which is probably a matter of taste.

€5 bonus on Bondora

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Last updated on 16 October 2022