Bondster: Update, no more fees, up to 13.5% interest and autoinvest

As you might know I joined Bondster during Q4 2018, actually a bit early for an update. The recent changes made me do one. There are lots of good news for investors which I want to share. Furthermore some Investors seem to have problems configuring the autoinvest. I had that trouble as well when I began using the marketplace. Let us start with the good news for investors:

No more fees on Euro Investments

Until Wednesday investments in Euro have been charged by an annual fee of one percent, so lowered the interest received. This fee began charging once the first three months were over. Since Thursday this fee is gone (but new investors still get 1% cashback, details at the end of this post), which already impacts our yields in a positive way. The fee is still applied on the Czech Krona investments. The second nice point for us is:

Loans with up to 13.5% interest rate and buyback

Bondster has proven themselves by adding new loan originators, matching their risk criteria. This must be a very tough due dilligence review, as Bondster promises to step in, should a loan originator default. This week Lime from Poland was added and already offers a huge number of loans. Furthermore Bulgarias Stikcredit offered 13.5% on a smaller lot of loans. If you like the ore conservative approach, there are more loans from originators which haven been in business for years now. Oh, by the way, Stik and Lime offer short term loans of up to one month.

Late and Penalty fees

A recently changed fact is, that if a loan is past due date, investors still get compensated for the overdue period. There is just a little difference with how much. If in the loan details there is written “no penalty fee” it means, that the loan interest just runs at the same rate. If a loan is yielding at 13.5 percent, this rate is appied until buyback kicks in. If in the details there is written “penalty fees yes”, the interest accrues until the due date as it is written and then afterwards the penalty fee applies. I guess it is at least the same as the interest or more, otherwise this distinction would not make any sense. I hope this explanation was clear.

Autoinvest feature – sometimes less is better

Yes, the autoinvestor played games with me as well, lol. I had several people reaching out to me about it. Therefor I decided to share some info about it. First, I really think Bondster wanted to create a sophisticated autoinvest tool for us, hence we got a lot of parameters to set. And there seems to be the problem, some settings might not work together or we simply do not understand how to set it right. In experience it is enough to select the originator (or leave it empty to select all), the minimal interest rate, maximal duration and include buyback (currently obsolete, but I want it future proof). Below you can see my settings:

My Bondster Autoinvest settings

Once you clicked save, you see the overview of your autoinvestor, and there is a really helpful detail: Found loans shows you how many loans match your criteria. My settings result in 292 loans. With this number, you can see if your settings are ok or not.

Conclusion

Beforementionned changes really make Bondster more attractive in my opinion. Short term loans with 13.5 percent yield, plus overdue covered, this is really competitive. Further I like the regional diversification with a platform outside the Baltics.

New investors get 1% Cashback on their investments, if you register (follow link) and put this number, 4985, in the promo code field. This is valid for the first three months after registry. Cashback is directly credited on your investment account on the 5th of every month, for the investments of the past month.

Crowdestor: Plenty of new projects and introduction of a buyback fund

A little more then one year ago Crowdestor has started its services and begins to thrive right now. The first ever financed project was paid back some days ago (others already repaid before) and there are three investible loans on the platform right now. Afourth will be online for funding on Wednesday morning, more on that at the end. First i was a bit sceptical about the marketplace or to put it better, the first project. With some time past now, I am more confident about them then a year ago. For sure the projects are of higher risk, but you get compensated by very attractive interest payments (like Kuetzal or Envestio . Interest starts to accrue from day one, which of course an advantage. I am convinced that at some point at least one loan gets delayed or worse. To counter that a bit, I guess the buyback guarantee fund was founded.

Buyback Guarantee Fund

On March 1st Crowdestor announced that they had launched their buyback guarantee fund and initially funded it with 50k Euro. Further there will go one to two percent of each projects fee into the fund. Such a mechanism we already know from Lendy, formerly Saving Stream. They believe the fund will be worth about 100k by years end. Achievable if the funding of loans reaches 2.5 to 5 Millions of Euro. Seems to be quiet a bit, but given the rate at which new projects are going live and funded, I believe it is doable. I just question how much 100k will help when compared to a 500k project. It might be enough, as mostly loans default down the road not at the beginning and if there are securities in place. Let us hope we won’t have to find out ;). Last but not least the funds rules are not clear to me. I hope the marketplace will soon define them clearly. n

New Project on Wednesday at 19 percent

Wednesday morning a new project will go live for 520k Euro at 19 percent yield and very short duration of 9 months only.. My gut tells me this one will be funded quickly. I do not have more information on this project currently. It looks like a real estate project in Riga. Follow me to Crowdestor.

Newest Crowdestor Project in Riga

Kuetzal – new marketplace with high yields (22%), cashback and sign up bonus

Kuetzal, what a weird name I first thought. So I asked them why they branded them like this. See the answer from Alberts, CEO and Cofounder:

Initially we wanted to name the platform Quetzal. It is a rare bird which Aztec and Maya tribes considered as sacred. The bird is associated with trust, magnificence, brilliance and we decided to use this name. Another reason is we wanted to differ from competitors which have a lot of invest, lend, crowd in their names. The market is overloaded with such names so we decided to bring freshness. We just made a change from Quetzal to Kuetzal as we believe it will be more Europe-oriented name.

Well, I guess the differentiation was successful 😉 The platform’s headquarters is in Talinn, Estonia and was founded by three young entrepreneurs. Interest rates vary from project to project and top at 22 percent. Kuetzal offers some special features, which I would like to discuss a bit further.

Kuetzal Care and the Buyback

Most new platforms have a hard time getting their first loans funded, which is in turn a pain for new investors, as their money is on the platform not earning interest. This is different with Kuetzal, as interest accrues from the moment the investment is made into a project (minimal investment 100 Euro per loan, monthly interest payments). This is part one of Kuetzal Care. Second part makes sure that every project will be funded completely. Creditline with banks and money from Angel Investors makes this possible. The buyback feature is not included in every project, it is mentionned in the summary table of each project. If buyback is available on a loan, you can instantly sell your loan part to the platform directly, but they only refund 90 percent. So you basically lose 10 percent of your initial investment as a penalty. This means that you can sell a 20 percent yielding project after 6 months and make no loss (as the monthly interest payments covered it), should you need money before maturity. We know this functionality already from Envestio.

Kuetzal Projekte
Some current projects at Kuetzal

Brand new: Cashback and Sign up Bonus

At the moment you can get 0.5% Cashback on your investments during the first six months after registration. Use any Kuetzal link (like this one) and click on register on the site (right top corner). This offer has no expiration currently. Plus, there is a sign up Bonus of 10 Euro. To get it, insert SPRING2019 in the promo code field during sign up. On top of that there is a Cashback for investments from 1k Euro (see picture below) All Bonuses will be directly credited to your investment account.

Cashbackmarathon at Kuetzal until August 31st 2019

Conclusion

You see, this marketplace has its own and very different approach. This should not be seen as bad news. What I don’t like is their lack of focus. They focus on ideas and not sectors or segments. Comforting on the other hand is, that they got funding approved from banks and angel investors. Something which you don’t secure without a deep due dilligence by them. These institutions do not throw their money at a project easily. As per today no project has matured, so no assessment can really be done at the moment. Take for granted that these are risky investments (like Envestio or Crowdestor). As expected I got all my due interest payments on time and I am hopeing this will continue. Follow me to Kuetzal.