Crowdestor Review

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WHY DO WE LIKE WHAT WE LIKE??

1) High Returns

Crowdestor provides investors with the opportunity to earn one of the highest interest rates across the P2P industry. The average interest rate across the 41 loans listed on the site to date is 17%, with the interest rate on loans ranging from 12% to 36%. For investors with a high-risk appetite, there is an opportunity to earn impressive returns using the platform.

2) Strong Safety Net

Crowdestor introduced a buyback fund in March 2019, stating that this will be used to compensate investors in the event of a borrower default. The current status of the fund can be seen here. Each project that is funded on Crowdestor contributes 1-2% commission to the fund. This is one of the strongest safety nets we’ve seen across P2P Platforms, and will only grow stronger over time as more loans are added and the fund grows.

3) Unique Investment Opportunities

Would you like to invest in a Cryptocurrency Farm? How about a summer concert in Riga? Why not invest in a holiday resort in Cambodia? All of these investment opportunities have been listed on the Crowdestor platform to date, offering investors the chance to put their money into something unique.

Crypto

 

WHY DON’T WE LIKE WHAT WE DON’T LIKE??

1) Lack of Investment Opportunities

There are limited opportunities listed on Crowdestor at any other time. The high returns offered on the platform has attracted a significant amount of investors, and loans are usually fully invested within a day or two of listing.  Investors need to be alert to new opportunities as they arrive. We would suggest signing up for email alerts that let investors know when a new opportunity is going to be listed on the platform.

Coupled with the above, a common complaint about Crowdestor is the lack of liquidity that is offered. Many of the loans listed do not start to repay investors until 6 months after the initial investment. Additionally, there is no secondary market available so once a loan is invested in, that capital is tied up until the loan is repaid. We recommend investors read and gain an understanding of the loan agreement prior to investing, as the repayment schedule is different for each loan.

2) High risk Investments

A general principal in Finance is that high return is correlated with high risk. As Crowdestor provides one of the highest returns on the P2P market, it is safe to assume that the risk of losing some or all the money invested (both principal and interest) is also high. Having said that, there are several factors going in investors favour that help to reduce this risk:

  • The team at Crowdestor have shown at impressive ability to find opportunities with a good track record of repayment. Of the 41 loans listed to date, 6 are fully repaid and there is no record of default on the other loans.(If you have experienced otherwise, please let us know in the comments!!) This is a testament to the team and a good reflection of the credit review process in place.
  • It is inevitable that eventually one of more of the loans listed will default on their payment. The buyback fund introduced in March 2019 provides a good safety net (discussed above) to protect investors.
  • Accompanying each loan is information on what the loan will be used for, how the loan is secured and other details on the project. Each project is different and as such the accompanying information is different. Investors should perform their own evaluation on the documentation provided in order to ensure that the risk involved matches their investment style.
Industry Breakdown

41 loans have been listed on the site to date, with a high % of these projects within the high risk Real estate industry

Conclusion

Crowdestor is a young platform and is making an impact in the P2P industry. The returns are amongst the highest available and provide investors the opportunity to fund some interesting project. For investors with a high risk appetite, there is an opportunity to earn some make impressive returns.  The majority of projects are based in Latvia, giving investors the opportunity to diversify their investments.

Geographic Breakdown

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