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.

Bondster – Czech P2P with Buyback (and Cashback)

Some weeks ago I already announced Bondster and now it is time to take a closer look. Czech private equity company CEP Invest owns Bondster. Further there is a strategic partnership with the loan originator ACEMA, which I know from Mintos. ACEMA is a heavywheight in the Czech nonbanking loan market with only a little short of 20 years of experience in this market. I guess these are solid preconditions. 

Sign up, Cashback and Fees

On Bondster retail and company lenders can invest money, if they have got a banking account withing the European Union (plus Norway and Switzerland). You can sign up  with this link. If you add these four digits 4985 to the Promocode field on the bottom of the form you get 1 percent cashback for the first three months  (same for me). The cashback is calculated on your average investment during the first three months. The funds will be credited on your investor account after 30,60, and 90 days. Further there are no fees for the first three months. Afterwards the marketplace charges 1 percent annualy on your invested funds. The fees are directly subtracted from your received interests. So basically you can test the platform for three months free of charge and get an extra cashback.

Currencies and types of loans

CZK (Czech Krona) and Euro are available for investments at the moment. With CZK there is sort of an instant access savings account (like Bondora Go und Grow), which yields 3.9 percent annualy. I doubt this is very interesting for Euro investors, but I wanted to mention it anyway.. Additionally there are loans which are secured with property, but only seldom they are on the marketplace. The biggest part of the loans are Guaranteed Liquidity (GL) and Buyback (BB). Both of these types come with a buyback guarantee on principal and accrued interest, after 60 days. The GL loans provide a possibility to exit before maturity, but this comes with a cost of 1 percent of the principal amount. As most loans are annuities with monthly installements, the effect of the fee reduces with increasing duration of the loan. The buyback loans do not provide this early termination option, but yield much better ( currently 12%) and come with a duration of a few months. I can forgo the liquidity feature because of the buyback and the relatively short duration. Minimal investment per loan is 10 Euro.

Autoinvest

Bondster offers an autoinvest feature, which seems to be a little complicated on first sight. This has to do with the many options you can set. Therefor I made my first investments manually, which took some time as I had to confirm every investment . In my next Bondster post I will explain the mechanism in detail.

Conclusion

I find Bondster interesting as it presents a regional alternative to the Baltics.  Another positive point is that ACEMAis on board, which I already know from MIntos. As always with these types of loans the quality of the loan originater is key. There are some unknown originators on the marketplace. I will try to gather more information on them and share my thoughts in the coming weeks. By the way, the website is also available in English.

Questions? Post them here.