Mintos Review (8/2022)
Skanstes 50, LV-1013 Riga
4.75 of 5Mintos
Interest and costs
Flexibility and conditions
Support and service
Average returns between 10% - 12% p.a.
- Most loans are offered with buyback obligations (formerly buyback guarantees).
Largest European P2P platform
- Mintos is the largest European P2P platform and can offer investors a broad range of different P2P loans.
Free of charge for investors
- No disadvantages
We took a closer look and tested the P2P platform Mintos.
If you want to know:
whether Mintos is a reputable platform,
how Mintos mediates loans as a marketplace,
what experiences investors have had with the platform,
how to invest manually or automatically in P2P loans on Mintos,
then you will find all the information you are looking for in this review.
Let's get started.
Table of contents
Introducing Mintos as a P2P platform
Mintos (AS Mintos Marketplace) was founded in Latvia in 2015 by Martins Sulte. Mintos is the largest European platform in terms of loan volume. Mintos is not (yet) supervised by the Latvian Financial Market Authority.
AS Mintos Marketplace at a glance
More than 360,000 registered investors
More than €5 billion worth of loans extended
Lending in several countries, including Denmark, Finland, Poland, Spain and the UK
Most loans are offered with a buyback guarantee (repurchase guarantee)
You can achieve returns of 10% - 12% p.a. and invest from as little as €10
Investors can choose loans individually or invest automatically
A secondary market is available to quickly obtain liquidity
Tax certification is simplified through various functions
Who can invest on Mintos?
Individuals can invest on Mintos if they are at least 18 years old and have a bank account in the EU or a country that has AML/CFT systems currently recognized as equivalent to those in the EU. In addition, Mintos must be able to verify the identity of the person.
UK Note: Currently, UK citizens, residents or taxpayers cannot register as investors (as of February 2021).
Companies can also register as investors if they have a bank account and are registered in the EU or countries that have an AML/CFT system equivalent to the EU.
How P2P loans are offered on Mintos
Mintos works with loan originators for loan intermediation.
The loan originators arrange loans in their target markets, which are then offered to you as investor on Mintos. Each loan originator follows its own business model.
The cooperation with loan originators allows Mintos to offer many different loans.
This also explains how the platform has been able to grow so rapidly over the last 5 years.
Example: Obtaining a loan by a loan originator
Mogo pre-finances the loans. For example, on 11/07/2018 Mogo issued a bond (ISIN: XS1831877755) with a nominal interest rate of 9.5% for a volume of 50 million euros.
The issued loans will then be passed on from Mogo to you as an investor via Mintos.
Ratings on Mintos
Mintos categorizes the loans according to risk scores. Scores from 1 to 10 are assigned. 10 is the best rating with a particularly high creditworthiness, the opposite is true for a score of 1.
Collateralization of loans on Mintos
Different types of loans are offered on Mintos. Short-term loans and consumer loans are typically not collateralized.
Car loans and mortgage loans with a defined financing purpose, on the other hand, are (almost) always collateralized.
Experiences of investors with Mintos
The Mintos platform has brokered the most loans in Europe during the last 5 years.
Investors have had good to very good experiences with the platform. The user interface is clear and easy to use, and investors have been able to achieve double-digit annual returns.
The lack of supervision by a financial regulator remains the subject of frequent debates.
A comparable platform would not be able to broker loans in the U.S., for example, without financial market supervision.
To date, the platform is not supervised by the Latvian or any other European financial regulator, which is incomprehensible due to the size of the platform. Despite the lack of regulation, investors have achieved good returns with the platform and there have been no major disappointments.
However, Mintos says it is working on obtaining an official license from the Latvian Financial Market Authority.
Mediation of loans by loan originators
Mintos has managed to become the largest European P2P platform within 5 years. The platform has managed to do this by collaborating with loan originators for loan brokerage.
The biggest advantage of Mintos for investors is that they can choose from a wide range of loans. You can invest in loans that vary by risk, term, country, loan type, and currency.
Mintos itself does not issue loans. Loans are originated by loan originators and then passed on to investors through Mintos.
How did Mintos perform during the Corona crisis?
Mintos was also hit by the Corona crisis. In some cases, even more severely than other platforms.
Similar to other platforms (and also banks), the number of loans granted decreased sharply. Likewise, there was an increase in defaults, which negatively affected the returns of many investors.
In particular investors, who invested in high-risk loans, suffered strongly by a drop in returns - which could have been expected due to the higher risk.
The platform quickly provided transparency. In a nearly two-hour webinar on YouTube, CEO Martins Sulte gave all interested investors a detailed insight into the current situation and what measures Mintos will take to get through the crisis.
What caused Mintos particular difficulties during the crisis was the large number of loan originators. Since Mintos does not have a stake in the loan originators, Mintos has limited control over them. In this context, some loan originators experienced delays or even stopped lending on Mintos.
Overall, Mintos as a platform has come through the crisis relatively smoothly and business now seems to be returning to normal.
Other platforms that also work with loan originators that they own came through the crisis somewhat better than Mintos (Twino and Viainvest for example).
However, to be fair, we should also mention that the other platforms are much smaller than Mintos, and thus it wasn't surprising that Mintos had to solve several challenges.
Advantages and disadvantages of Mintos
Mintos offers you different investment strategies to invest in P2P loans. You can choose between preset strategies, custom strategies or manually select the individual loans.
You can achieve annual returns of 10% - 12% p.a.
It offers the largest selection of loans among all European P2P platforms.
Investors are not charged any fees or other hidden costs. For you as an investor, Mintos is completely free of charge.
Thanks to the secondary market, you can get out of your investments relatively quickly.
Since Mintos works with loan originators, the bankruptcy of a loan originator can hit you hard. If a loan originator goes bankrupt, it can lead to a total loss of your investments with that loan originator.
Most loans are offered unsecured and secured by a buyback obligation. The value of the buyback obligations depends on the creditworthiness of the loan originator and may suggest a non-existent security.
If Mintos goes bankrupt as a platform, you face the total loss of your investments.
Register as an investor on Mintos
Registering as an investor on Mintos is very simple and completely digital. To register successfully, you only need to complete 3 steps.
1. Register as a user on Mintos
Your registration on Mintos starts by visiting the website. You press the button "Create account" in the upper-right corner, and you will land on the account opening page.
After that, you enter your email address and click on "Continue". In the next step you will be asked to enter your first name, last name and password, followed by your residence details.
2. Verify your email address
You will receive an email from Mintos where you can verify your email address.
Press the "Verify Account" button in the email to verify your email address.
3. Verify yourself and your account
After you have verified your email address, you need to verify yourself (you will be automatically redirected to the correct page). For the verification, you need your identification documents.
Your account will be verified with the first transfer to the account.
Deposits and withdrawals on Mintos
To deposit money to your Mintos account, you need to transfer the desired amount to a central platform account.
After you have logged in, click on "Invest" in the top navigation and then on "Deposit money".
Then you select the currency in which you want to make a deposit, and then you can choose between "Direct transfer" and "Wire transfer".
The direct transfer is carried out via the payment service provider Trustly. The other option "Bank transfer" is a standard bank transfer.
In the default case, you choose bank transfer, and you will be shown what kind of transfer you should make.
You must fill in the payment details of the transfer exactly as indicated. The money will be assigned to your Mintos account based on the payment details of the transfer.
It can take 1-3 days until the money is credited to your account. After the 4th day, you should write an email to the Mintos support, as the money could not be assigned automatically.
Withdrawing money from your Mintos account is very easy.
You click on your current balance at Mintos in the top-right corner (just to the right of the two arrows). Then select "Withdraw money" and you will be redirected to the Withdraw page.
On this page you just enter the amount you want to withdraw and select the destination account.
Invest in P2P loans on Mintos
You can decide how you want to invest on Mintos.
Either you invest through an automatic strategy, which is offered in three risk categories, or you set your own custom, automatic investment strategy.
You can choose from the following predefined automatic investment strategies:
If you do not like any of the strategies, you can define your own strategy. If you generally do not want to invest automatically, you can also select the loans manually.
With the diversified strategy, Mintos invests in as many loans as possible. The diversified strategy has a return of about 12% per year.
The conservative strategy invests in loans from loan originators with the highest credit score (according to Mintos) and the best quality. It invests only in loans with buyback obligations. The conservative strategy offers you an expected return of about 10% per year.
For investors who want to achieve higher returns, Mintos offers a high-yield strategy. The high-yield strategy invests in 60% of the loans on the platform with the highest interest rates. This strategy also invests only in loans with buyback obligation. The expected return of the high-yield strategy is approximately 12.5% per year.
If you dislike the suggested strategies of Mintos, you can also set a custom strategy.
Currently, for example, you will notice that the returns of the standard strategies are very close to each other.
Remember, the higher the risk, the higher the return. Likewise, the lower the risk, the lower the return. There is no exception to this rule.
For example, if you want to get much more return than 10% - 12% p.a., you could set a custom strategy that is much riskier.
If safety is more important to you, you would consequently have the option to invest in loans with lower yields, which are less risky.
Furthermore, you should pay attention to the availability of your money. The longer you are willing to give up your money, the higher the returns.
You can always sell your loans on the secondary market, but you may have to accept haircuts.
Select loans one by one - manual investing
You can choose your loans individually on Mintos.
You need to spread your money as wide as possible when investing in P2P loans. It is not advisable to make large individual loans.
We mention this option only for completeness, as it is on the one hand less pragmatic and also not recommended.
Secondary market on Mintos
Mintos offers you a secondary market where you can sell your loans relatively quickly (with possible discounts). You can also use the secondary market to invest your money quickly and to find cheap loans.
What returns can be achieved on Mintos?
At the moment (January 2021), you can earn returns between 6% and 22% p.a. on Mintos. On average, the returns are 10% - 12% per year.
What costs and fees does Mintos charge investors?
Mintos does not charge you as an investor any costs or other fees. The costs for the platform are borne by the borrowers (and loan originators).
Can you automatically invest in P2P loans on Mintos?
Yes, you can either invest in investment strategies set by Mintos or create your own custom investment strategy.
Can you select individual loans on Mintos?
Yes, you can select each loan you want to invest in individually on Mintos.
We would advise against this, especially as a beginner, as you should spread your money over as many loans as possible. The best way to achieve this goal is through an automatic investment strategy.
Risk of investing on Mintos
P2P lending as an asset class is risky. Any loan offered by Mintos can potentially default.
You can try to limit the risk of default by preferring loans with higher ratings (assessment of a loan's creditworthiness).
How reputable is Mintos?
Mintos should be considered a reputable platform that has grown rapidly since 2015.
Even though there were a few hick ups during the Corona crisis, the platform managed to hold its ground.
In our opinion, Mintos will benefit greatly once it is supervised by a financial regulator. This point is especially important to many professional investors.
Are there detailed statistics about the loans on Mintos?
Yes, Mintos offers a statistics page where investors can view detailed information about P2P loans.
Do investors have access to Mintos' annual report?
Yes, Mintos publishes its annual report online on its website.
What are the default rates on Mintos?
Mintos regularly informs its investors about the current figures on the platform.
According to Mintos' figures, default rates across all loans are below 1%.
These numbers are actually far too low when you look at comparable P2P platforms. The U.S. P2P platform Lending Club, for example, reported historical default rates of 5% - 7%.
With buyback obligations, loan originators agree to take back the loans after a period of time should difficulties arise.
The low default rates on Mintos can only be explained by the buyback obligations. Last year, more than 90% of loans on Mintos were made with buyback obligations.
Are the loans on Mintos protected by the deposit insurance?
No, the loans on Mintos are not protected by the deposit insurance such as the FDIC insurance.
How does the Mintos buyback obligation (buyback guarantee) work?
Most loans are offered with a buyback obligation. Once a borrower fails to make payments for more than 60 days, the loan originator is obligated to pay you back the principal invested and accrued interest.
According to Mintos, this buyback process can take a while depending on the loan originator.
Loans that have a buyback obligation are indicated with a shield icon.
How safe are the buyback obligations?
Based on the historical default rates, it is easy to see that Mintos and also the investors benefit from the buyback obligations.
With buyback obligation, the loan provider buys back the loans after 60 days and also pays out the lost interest.
But, the problems are ultimately just outsourced to the loan originator. If a loan originator lends too aggressively, it can go broke.
The loans made by that loan originator can then all become worthless at once. This would mean the total loss of your money, which you have invested through this loan originator.
Unfortunately, this has already happened in the past. For example, many investors were hit hard by the bankruptcy of the loan provider Aforti Finance. That is why you should never invest on Mintos only in loans from one loan provider.
Mintos itself takes this aspect into account by offering automatic strategies where you only invest a maximum of 15% of your money with one loan originator.
Paying taxes on income earned by P2P lending on Mintos
You can easily get the information for your tax return on Mintos.
Prepare your tax return on Mintos
After logging in, click on the round button with the user icon at the top, then select Tax Statement.
In the next step you only need to specify the country and period for which you need a tax certificate. Mintos will email you the information for your tax certificate.
Result of our Mintos Review
In our opinion, Mintos has rightly become the larger European P2P platform. No other platform offers investors such a wide range of P2P loans as Mintos. We also rate the average returns of 10% p.a. to 12% p.a. as attractive, and depending on the risk appetite, even returns above 20% p.a. are possible.
Although Mintos is not yet officially regulated, the platform intends to be supervised by the Lithuanian Financial Market Authority in the near future. We consider this development to be correct and think that official regulation will make the platform attractive for new investors who have been lacking official regulation so far.
We are also positive about the fact that Mintos reports in detail on the statistics page about the loans on the platform. The current annual report is also publicly available and gives investors sufficient information to assess whether the platform is financially sound.
With the automatic investment feature and preset strategies, it is made easy for investors to invest in the P2P loans on Mintos. Investors who want to implement their strategy can still find enough loans to invest in even with relatively strict settings.
Weighing up all aspects, we think Mintos is undoubtedly a recommendable platform. In our P2P platforms comparison, Mintos ranks 1st together with viainvest.
Whether you are satisfied with a P2P platform eventually and agree with our test result, you can only find out yourself. The best thing to do is to sign up now as an investor on Mintos.
As soon as you have gathered your first experiences with the platform, we would be happy if you share your experiences with us.
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Last updated on 23 June 2022