European leader in equity loans, Mintos is a benchmark platform for investing in P2P loans and earning passive income with relative security. But still, it is necessary to apply to invest correctly in order to take advantage of the potential offered by the platform to grow your savings.
While there is no standard method for investing and making money on Mintos, there is still a consensus around 5 key rules to follow. We reveal them to you below.
Do not invest a large capital from the start
As with any investment, defining the budget to invest is an essential prerequisite. The same goes when you want to get into equity loan.
For a start, it is recommended to enter the market with a minimum capital, the time to familiarize yourself with the platform and its operation, while limiting the risk of loss for the beginner.
You can then gradually increase the size of your portfolio, as well as the amounts you wish to expose in your various investments according to your objectives.
Don’t just rely on Mintos stats
In accordance with its information obligation, the platform sets up a rating system for companies issuing loans so that investors can make informed decisions. Varying from A + to D, these ratings provide an estimate of the financial stability of companies and their level of risk.
While these statistics are of great help, ratings can show limits and be misleading. They are in fact issued on the basis of the current performance of the companies assessed. However, these data do not always accurately represent the performance and future financial health of the company.
Don’t just look for the highest returns
While it is tempting to prefer high yield loans, investing exclusively in juicier projects can be counterproductive for your portfolio.
In addition to being few in number, loans with high interest are also the ones with the greatest risk of loss. To make your investments profitable, it may be wise to target loans with average yields, with a more or less short repayment period.
Don’t put all your eggs in one basket
Diversification remains one of the key words for the success of your investments regardless of the platform through which you invest.
On mintos, diversifying your investments amounts to dividing your capital into micro loans that you will grant to different loan issuing companies rather than just one.
By diversifying your investments in this way you limit the risk of loss in the event that an issuer fails and is unable to repay the loan.
Sort out to avoid defaults
To optimize the profitability of your Mintos investments, you must finally sort your investment strategy so as to select only the best loan issuers.
Concretely, it is a question of retaining the best rated companies and excluding from your strategy companies with bad debts or deemed to be late in repayments. This will further minimize the risk of losses due to defaults.