As you might know, I diversified my Peer-to-Peer lending investments over several platforms, mainly across Europe at the moment. Between all those platforms, the first one I ever invested on is the Bondora platform, which is still one of the biggest positions in my P2P lending portfolio.
In this article, I will review the Bondora platform, on which I invested about one year 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 one year of investing.
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:
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.
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.
Let me now tell me a bit more about the interface of the platform, and also about what kind of loans are available at the moment. Since I invested in my very first P2P lending loan on this platform a bit more than one year ago, the interface changed a lot.
At the heart of the interface is the dashboard, on which you can also find the portfolio manager:
Bondora has the easiest portfolio manager interface I know, as they have three clear choices of the portfolio manager. It is a pity that they removed their ‘custom’ portfolio manager in 2015, which allowed to define your own filters for your investments. However, as I do not want to manage my investments day after day anymore, I am now using their portfolio manager in the most conservative mode, which is giving me good results so far (more on that later).
They also have a very good interface for the filters, which changed a lot since I first invested there. You can basically filter the loans on every possible data available about them:
This allows to quickly browse through available loans in case you are investing manually. At the time I wrote this review, there were about 100 loans available on the platform, including several loans in the best ratings available on the platform.
Let’s now talk about my own portfolio there, and the performances after over 2 years of investing in the platform. The major difference compared to when I actually started to invest on Bondora is that I switched from the normal portfolio manager to portfolio pro, which is their new feature where you can set exactly in which loans you want to invest in, for example, based on the ratings of the loans.
As the number of defaults was rising 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). Therefore, my annual yields stabilized at around 13%, which is what I predicted when I first wrote this review, so it's all good at the end. Let's have a look at the overview of my accumulated gains since I started investing on the platform:
On this graph, you can definitely see what I did on the platform: injecting a lot of money till the middle of 2016, before using the passive income generated by Bondora to invest and other platforms and diversify & grow my portfolio. This explains the big surge of income in 2016, followed by a more stable monthly income. Note that I also activated portfolio pro after 2016, explaining why the monthly income was going down a bit.
I only had one issue at the start of 2019, where some of the bad loans that I invested in at the start went to default. That was my fault however, and now as I set portfolio pro to only invest in the safest loans it should not happen in the future. At the same time, I also withdrew some money to inject it on other platforms in order to diversify my portfolio, which explains the slower growth of the income in the past months.
To sum up, I would say I am really pleased by the Bondora platform. They have a huge amount of loans available, which is great if you want to invest significant amounts of money on the platform. They also have a nice & clean interface compared to other platforms. The fact that they don't have a buyback guarantee requires a more conservative approach compared to other platforms, but this is something that can be solved by using the right plan & the correct strategy on Bondora. When I first wrote this review, I said I wanted to see a more customizable portfolio manager, which is exactly what they did with portfolio pro. It proves they definitely constantly improve and listen to their users, which is a very good sign and I will definitely invest more on Bondora in the future.
Overall, I am still really satisfied with Bondora. They have a great number of loans available, which is great if you want to invest significant amounts of money on the platform. They also have a nice & clean interface compared to other platforms. They also have different options for different types of investors, from the really easy to use Go & Grow plan to Portfolio Pro for the most advanced users. They are also definitely constantly improving and listening to their users, which is a very good sign and I will definitely invest more in Bondora in the future.