Are you considering investing in Mintos and want to learn more about the platform before investing your money? Well, opting for Mintos is choosing to invest in the leader in crowdlending platforms on a European scale.
However, this is not without risk of capital loss. But don’t worry. In order to mitigate the effects, the site sets up a set of guarantees aimed at protecting investors and securing their investments.
What are the risks in investing with Mintos?
Mintos is a P2P lending platform that enjoys a solid reputation and is considered one of the most reliable in Europe. However, investing in it is not without all risk. When you lend through Mintos, you may face performance, insolvency or bankruptcy risks from partner loan companies.
The performance risk concerns in particular the default of repayment of the loan by the borrower at the end of the defined period. To overcome this drawback, Mintos offers a non-refund and / or buy-back guarantee. However, these guarantees do not automatically apply to all loans. For an uncovered loan, the consequence of default will be the loss of invested capital. But you should know that there are legal aspects concerning peer to peer lending, protecting the various stakeholders.
As for the companies issuing loans through which investors grant loans which are returned to borrowers, they are not immune to bankruptcy. Of course, such a possibility would also result in a loss of your capital.
How to invest well to limit these risks?
Once registered on the Mintos platform and to give your investments the best possible chance of bearing fruit, the first recommended strategy is that of diversification. In short, it is about diversifying your investments by spreading your capital over different types of projects, different forms of loans and different borrowers. You will be able to limit the extent of your losses in the event of default by the borrower.
Likewise, when investing in Mintos, when possible, give preference to loans with a guaranteed non-repayment and / or a buy-back guarantee. In the first case, you will be able to benefit from a repayment of your loan plus interest in the event of default by the borrower after 60 days.
As for the buyback guarantee, it will allow you to sell your loan on the secondary market to other investors in case you want to get your money back before the loan matures. Finally, still in the logic of diversification, note that there are other P2P platforms similar and as reliable as Mintos in which you can invest and minimize your risks.
How Mintos protects lenders?
In order to prevent risks upstream, the platform performs a rigorous study of loan applications and borrowers’ solvency before any presentation to investors.
In addition, a mortgage is required for most loans. In the event of default, the sale of the borrower’s property ensures the repayment of the loans. Additional protection is offered to investors with the guarantees of non-reimbursement and redemption mentioned above.
Combined with a good diversification strategy, these protections allow you to benefit from relative security when you invest in the loan through Mintos.