Bondora Review 2024: is Bondora a Safe Platform?

As you might know, I like to diversify my Peer-to-Peer lending investments over several platforms, mainly in Europe. Between all those platforms, the first one I ever invested on was Bondora.

In this article, I will review the Bondora platform, on which I invested over 4 years ago. I will tell you more about the platform, what is the current state of the available loans there, and finally, I will tell you about my portfolio on this platform & how it is performing after all those years of investing.

What is Bondora?

Bondora is a Peer-to-Peer lending platform based in Estonia, and one of the largest platform in Europe. According to their website, they processed more than 250 million worth of loans since they opened in 2009. That's an impressive track record for a Peer-to-Peer lending company with more than 11 years of successful operation. The platform is accessible to most investors based in Europe, and they are currently serving loans in Estonia, Finland and Spain.

Like many other platforms in Europe, they have no fees for investors on the primary market. The only fees you would have to pay is when you invest in the secondary market (buying shares in loans other people already invested in), but that’s not something I did at the moment.

I actually had the opportunity to visit Bondora at their offices in Tallinn and it was awesome! Here is a picture from the visit:

What Returns Can I Expect From Bondora?

The returns on Bondora completely depend on which of their predefined plans you will use on their platform. Currently, there are three of them:

  • Go & Grow, which is the plan that they recommend for investors that want to keep their money safe and be able to withdraw money at any time. Currently, this yields around 6.75%.
  • Portfolio manager, which is their default plan and has variable returns depending on what strategy you are using. Currently, this plan has a yield between 10 and 18% depending on the selected strategy.
  • Portfolio pro, which is for more advanced users that want to select exactly in which loans they invest in. The returns on this one completely depend on which loans you are investing in, which range from 6% to around 20%. 

I've personally used the portfolio manager at the start, before switching over to portfolio pro with a quite conservative approach (more on that at the end of the article). Currently, my returns are just above 13% with this strategy.

Is It Safe to Invest on Bondora?

The most important question before investing on any Peer-to-Peer lending platform is: will it be safe to invest on this platform? To answer this, I always look at three different points: the platform itself, the company behind the platform, and finally the people running the company.

The Bondora Platform

Compared to other platforms, loans on Bondora don't come with a buyback guarantee. This is actually not a problem if you have the correct approach. I know that many users of Bondora complained during the past years that they had bad returns or even lost money with the platform. However, when I actually looked at the details of their investments, I saw that they invested in many high-returns (but therefore also high-risk) loans on the platform, and many of those defaulted, which resulted in bad results for those persons.

That's why I recommend a very conservative approach to Bondora. I recommend to either choose Go & Grow if you want complete peace of mind or portfolio manager with the most conservative setting. If you are at a more advanced level, you can also try portfolio pro, but here again, I recommend only investing in the safest loans on the platform (rated A or B).

As for all platforms, also diversify as much as possible on the platforms by investing in as many loans as possible. This will further reduce the level of risk on your portfolio.

Bondora & Regulations

As a financial services company, Bondora is regulated by the Estonian Financial Supervisory Authority (EFSA). The EFSA is responsible for overseeing and regulating the financial sector in Estonia, including financial market participants such as Bondora. 

Bondora is also required to comply with all relevant European Union (EU) regulations, including the EU's General Data Protection Regulation (GDPR) and the Second Payment Services Directive (PSD2). In addition to regulatory oversight from the EFSA and EU, Bondora is also a member of the Estonian Association of Credit Providers, which is a self-regulatory organization for the Estonian credit industry.

The Team Running Bondora

The company is led by CEO and co-founder Pärtel Tomberg, who has over 15 years of experience in the financial industry.

During my visit at the company offices, I also met a lot of really motivated people with a strong focus on helping the customers and make them succeed in their investments on the platform. Overall, I can definitely say the company is in really good hands.

How to Start Investing on Bondora

It is very easy to invest in Bondora. After creating your account (done in less than 5 minutes), you will be able to deposit money simply by making a transfer to the account provided by Bondora. For me, the money arrived in 2 days.

Then, you will be able to choose a strategy to invest in Bondora. Here, as I have already mentioned before, you have 3 possibilities to invest.

The first possibility is to use Go & Grow. This will give you a lower return than the other possibilities (around 7% when I wrote this article), but the yield is fixed and you will be guaranteed to receive that rate.

With Go & Grow, you will also be able to withdraw your money at any time, which is also useful if you want your investment to be liquid and not blocked on the platform.

Then you have the portfolio manager. Here, you will be able to choose different options depending on the level of risk you are willing to accept, then Bondora will automatically invest for you.

Finally, you can also invest via Portfolio Pro, which is the most advanced option on Bondora. With this option, you will be able to define exactly all the parameters you want to select the loans in which you want to invest.

It was this last option that I personally chose to invest in Bondora, as I like to have full control over my self-investing functions. As you can see, I opted for short loans (less than a year), and in the two best loan categories on the platform.

My Current Results with Bondora

Now let's talk about my own portfolio on Bondora, and the performance after more than 6 years of investing in the platform. The main difference from when I started investing in Bondora is that I switched from normal portfolio manager to Portfolio pro.

As the number of loan defaults increased on the platform, especially with higher interest loans, I decided to switch to a very conservative approach by only investing in the best loans (which is my approach now on all platforms). As a result, my annual returns have stabilised around 10%, which I am very happy with.