I would like to tell you about my experience of investing in P2P lending platforms. During my studies in the EU, my fellow students introduced me to the investments in P2P lending platforms. 2019 was the year of the lowest interest rates on deposits in the EU- fluctuated around 0.5-1% per annum, and this has been around for more than 2 years.
While all of them were receiving interest rates 20 times higher than in banks. Everything got to the point that my fellow students, being EU citizens, began to take loans in banks and invest these funds in these microloans. Sounds crazy, but it works for now. I decided to try.
Having invested 8K, in 18 months I received 1258 Euros of income, which amounted to about 10.5% per annum. After moving back to the United States, I discovered new opportunities with Prosper. It was a terrible experience.
On Mintos, I was not limited in the amount of investment, and most importantly, I did not have any time limits, since the vast majority of loans were microloans for a short period (up to 2 months). But in Prosper, you could invest for a period starting from 36 months, and the fee could reach up to 2%, in Mintos it is fixed at 0.85%.
In the end, I was refused because I could not show my gross income over 80.000 $ Plus. Also, there was no secondary market on Prosper where you could quickly and with a premium resell your investment. Fortunately, I still have a European SEPA bank account in Euros and continue to invest in Mintos.
Of course, the system is not perfect:
- You can earn more than 12% (the maximum that can be earned on the platform is 30% per annum), but then you get into loans with a rating of C- and below, and defaults can sometimes reach more than 30%. After all, the risk is all yours.
- 2. When transferring money to a European bank from the United States, after I left the EU, I had slight difficulties.
My payment was frozen by the bank due to suspected money laundering. I had to submit documents on the origin of money through the Bank of America, and explain why, being in the USA and being a US citizen, I transfer money to a European bank, and for what purposes it will be used. It is good that they did not demand to obtain a license for investment activities.
- 3. When converting from Dollars to Euros and from Euros to Dollars, you have to lose up to 4%.
From now on, I intend to increase my investment to 20K dollars, I will continue to invest in Mintos, and also try a new platform that uses crypt and promises interest rates two times higher than the European one. I will try to write monthly reports. If someone has a similar investing experience – let’s share.