Mintos – Investment Guide

So, you’ve decided to go down the Mintos investment journey but don’t know where to start, don’t know the risks and are afraid to take that first step. This guide will answer all the questions you didn’t even know you had and hopefully resolve at least some of your investment worries. We will get you thinking about the risks you will face and will give you a peek inside our investment strategy. By running through what we believe are the most crucial risks and giving you practical strategies you can use to reduce these risks, we aim to help you find the investment strategy most suited to you. Sounds good? Let’s get into it.

Don’t be a turkey

Nassim Taleb tells the story of a turkey who is fed every morning at the same time, the same meal at the same place, every morning for 1,000 days. Eventually, the turkey comes to expect that every visit from the farmer means that food is coming his way. Considering that this is all the turkey has seen since birth, the turkey becomes conditioned to associate the farmer with food. But then day 1,001 arrives and it’s 2 days before thanksgiving. Instead of carrying a bag of grains, the farmer is carrying an axe. The turkey quickly learns that its expectations were catastrophically wrong, and that what has happened in the past does not necessarily mean it will continue to happen in the future. And now the turkey is dinner. Taleb’s advice? “Don’t be the turkey”.

So you see an investment opportunity offering 20%, 30% even 40% returns! You’ve been investing for months now and all you can see is money coming in with no downside. Brilliant, right? Not exactly. Unless you are the next Warren Buffet averaging returns of 20% for the last 50 years, the chances are that earning this high a return year after year is unsustainable, and eventually you will be hit by something unexpected and see your hard earned returns fall drastically overnight. Our advice and the purpose of this guide: Learn the risks involved in investing, mitigate them as best you can, and don’t become the turkey.

RISK 1 – Portfolio Risk

I’m sure you’ve heard the expression “don’t put all your eggs in one basket”. Well, in this case, our advice is don’t put all your money into one asset class. P2P investing falls into the category of alternative invests. It is still a relatively new and unproven asset class, so spread your money around. You could invest in an index fund that tracks the S&P 500, bonds, gold or if you are feeling confident, why not try your hand picking individual stocks? Try to put your money into uncorrelated asset classes, so that when one is not performing, another will help pick up the slack.

If your not sure where to start, take some advice from the master of investing Warren Buffet and consider going with an index fund that tracks the market.

Vanguard ETF’s are one of the most popular – pick one that tracks the S&P 500 so your returns would be equal to the market returns. We use Degiro for our stock portfolio as the fees are amongst the lowest – Click here to sign up and receive a 20 euro joining bonus.

RISK 2 – Platform Risk

This is the risk that the platform itself goes out of business. Mintos is the biggest in Europe and is very stable – the risk here is very low (See the latest Financial statements here). Market data on P2P platforms is tracked by a company called Brismo – who provide an extremely impressive free tool that P2P investors should be interest in. Click on the link here, scroll down to the “regional volume” section and select “EU” to see how all EU platforms are performing. We like to focus on the “last 3 months” and “last 12 months” volume for each platforms – this is a good test of the current investor confidence. As you will see, Mintos are head and shoulders above all other players in the EU at the minute.

We suggest that once you’ve got to grips with one P2P Platform, consider investing in another. Therefore, if one platform goes out of business, you are protected on the downside and have spread your money across multiple platforms. Have a look at some of our other P2P platform reviews to see if any of these stand out for you:


Right. So you’ve settled on Mintos and are ready to take the plunge, dive in head first and get your money working for you.  You understand the Macro risks, but are not sure yet how to tackle the site. Below we’ve outlined some Mintos specific risks and strategy’s you can implement to reduce these risks.

RISK 3 – The loan you select defaults

There is a risk that the loan you choose to invest in is never repaid by the borrower. Each loan originator has their own process in accepting borrowers and recovering bad debts, so the percentage of defaulted borrowers should be low. However, this can be reduced significantly by selecting loans that provide a buyback guarantee. A buyback guarantee is a guarantee from the loan originator (not Mintos!) that if the loan has not been paid in the last 60 days, they will buy the loan back from you and absorb the bad debt. Some loan originators pay interest on these bad debts, some don’t. (Check out the table here to see who does and who doesn’t) Selecting loan originators that do pay interest on bad debts will help boost your earnings slightly, but not enough that you should spend too much time focusing on this.

When selecting loans, we suggest investing the minimum amount of 10 euro per loan so that if the loan repayments are not as expected, your capital is not tied up in the under-performing loan. Also, make sure to filter for loans that come with a buyback guarantee. A word of warning however, having loans protected by loan originators doesn’t mean much if the loan originator itself falls into financial difficulties, which brings us to our next and most important point….

RISK 4 – Loan Originator goes out of business

This is by far the most important risk when investing in Mintos. If a loan originator goes out of business, you can lose some or all of your money along with it, regardless if your investment is protected by a “buyback guarantee” or not. Don’t think this will happen? It already has – In 2017 Polish lender Eurocent found themselves in trouble and in 2018, they declared themselves bankrupt. We have talked about Eurocent and the lenders we believe are most likely of falling down the same hole in our Mintos review, check it out here!

Firstly, it is important to note that there are a number of inherent systematic protections that Mintos provide before you decide to start investing. These include due diligence prior to accepting new loan originators onto their platform and ongoing monitoring of loan performance. I won’t go into too much detail explaining here as Mintos do an excellent job of this themselves, check out their post here.

Secondly, there are a number of strategies you can implement to reduce your exposure to this risk:


“The only investors who shouldn’t diversify are those who are right 100% of the time.”

Sir John Templeton (1912-2008) 

We will never be right 100% of the time! This is investing 101 – Spread your risk around by investing in more than one loan originator. Therefore, when (and I emphasise when, not if) a loan originator goes out of business, your don’t lose all your capital. We recommend spreading your investments across 20 loan originators at a minimum.

Assuming a 12% average return and investments spread evenly across 20 loan originators, this will let you absorb the bankruptcy of a loan originator once every 5 months. As each loan originator represents 5% of your portfolio (100/20), and you earn an average of 1% return every month, this is a very effective investment tool to use.

Research Loan Originators

Invest in solid loan originators that have a low risk of failure. Lucky for you, we’ve already done a lot of the work! Check out our table here – we have gone through the financial statements of each lender and risk rated across several quantitative criteria. We don’t recommend investing your money in any loan originator that scores below 50, as we believe these loan originators are the highest risk of failure or have not provided enough data to evaluate.

Here’s a breakdown of the criteria we used to evaluate lenders. Check out of ratings table here.

Our friend over at The Smart Investor also have a very handy tool that helps filter through Mintos Loan Originators – Check it out here!

RISK 5 – Group Guarantee

Linked with the previous point and a to be honest a risk that often goes unnoticed, a massive risk is that an entity does not have a group guarantee. Without getting in to too much of the accounting or legal jargon, the basic risk is that:

  • A loan originator is structured so that they have separate and distinct legal entities, operating as subsidiaries in different jurisdictions, each reporting to the “Group” entity.
  • An entity in one jurisdiction may be performing well, whereas an entity in another jurisdiction could be falling into trouble. Rather than allowing an under-performing entity be compensated by the “good” performing entity, the group team could simply let the under-performing company fail, along with your hard earned money.
  • Without a Group Guarantee, there is no legal obligation for the company to repay the loans outstanding. The Group can simply continue operating normally as though the poor performing company never existed. If the under-performing performing entity declares itself bankrupt, your money could go down with it.

However, if the company has a Group Guarantee, this is essentially a guarantee from the Group that they will support all of their subsidiaries, underperforming or not. Check out our table here to see which companies have a Group Guarantee.

RISK 6 – Black Swan Events (All Other)

Ok, so we’ve cheated here slightly. There are countless risks involved in investing and it is simply not possible or an effective strategy to manager all of them. Unfortunately, we can’t plan for every risk or create a risk-free strategy. The sweet spot in investing is about finding how much risk you can tolerate, implement strategies to reduce your risk, and accept events that are outside of your control.

There are countless things that could happen: For example, a change in legal circumstances could render a loan originators business model obsolete, the death of a CEO or leader, a badly implemented strategic move, a company falsifying financial documents or falling into legal trouble, a war breaks out or the company website falls victim of a cyber-attack. As we cannot plan for these risks, we need to simply accept that they exist, be ready to react, and if there is nothing we can do, simply move on.


So now you understand the risks and are ready to start investing. But there are so many ways to go about this, so many loan originators to choose from and you don’t know where to start. Let’s simplify it into the 3 invest methods Mintos offer:

A. Manually Picking Loans

Once you click on the invest button on the header of the Mintos homepage, you are presented with thousands of loans to choose from and filters to input, with a primary and secondary market. The primary market is loans offered by loan originators directly, and the secondary market is investors selling loans they’ve purchased and can include a premium or discount.

If you know exactly what you are looking for this is a great strategy to use, however if you are reading this, you are probably looking for some guidance! Manually picking loans is a great place for a beginner to get to grips with the site but it is also a very time consuming strategy – Each loan needs to be manually selected and researched before investing, particularly if investing using the secondary market (Ask yourself, why is someone looking to sell this loan?). A much more efficient strategy is to let the technology do the work for you, bringing us to our next tool..

B. AUTO invest

We’ll keep it brief here as we talk about our autoinvest strategy below…. Our favourite investment tool, the autoinvest feature is perfect for someone looking to earn some passive income but still maintain control of where their investments are going. You can select loan originators, loan terms and acceptable % return parameters amongst others.  

C. Invest and Access

This is a relatively new tool offered by Mintos. According to Mintos statistics:

  • 69% of new investors on Mintos have used this tool to create their investment portfolios.
  • 18% of new investors choose the tool exclusively
  • Average returns are 12.09% on an average investment of 3,969 Euro


The major draw of the tool is that it gives investors the option to cash out at any time they want, at no extra cost. When an investor wants to withdraw money, the tool automatically sells current loans to other investors and credits money to an investor’s account. More than 80% of cash withdrawals from Invest & Access to investors’ Mintos accounts happen in a timeframe of 24 hours.

We tested the tool ourselves and were very impressed. The majority of our loans were sold within minutes of clicking the cash out button, and we didn’t have to wait any longer than 2 months (when the buyback guarantee kicked in for under-performing loans) to be fully divested.

There is also an option to “Pause and reactivate”, offering a good mix of control and flexibility to investors. Mintos are planning on reducing the minimum investment amount from 500 euro to 10 euro, so if you do not have much to invest, you can still use this feature.


While the tool is extremely impressive, there are a number of downsides and inherent risks that investors should be aware of:

Control of loan originators invested in:

You do not have control over the loan originators invested in. It is likely that you will be at least partly invested in loans that other investors have been avoiding. When we tested the tool we noticed that we were invested in a number of loan originators scoring below 50 in our rating table (Check it out here!), which is not a position we overly feel comfortable in.

We also noticed that we that we immediately had some investments in late loans – around 15% of our total portfolio. Did anyone else notice this happening? Comment below. We would like Mintos to improve this as it does not make much sense to be invested in underperforming late loans from the get go.

Market Conditions:

As Mintos acknowledge, the tool is only effective in “Normal market conditions”. Abnormal market conditions would be if there was a very large, sudden and extended demand to cash out from Invest & Access. This might be caused by a global recession, an abrupt and widespread loss of faith in investing in loans or a number of other situations. Ultimately this could mean that investors may have to wait until a buyer could be found for their loan shares in their Invest & Access portfolio, or until the loans were repaid over time by the borrowers


Before we get into it, let’s recap:

Portfolio Risk Every P2P platform starts finding itself in trouble – Invest in stocks, gold, bonds, ETF’s, Index funds, etc
Platform Risk One specific P2P platform finds itself in trouble – Invest in several platforms
– Review financial statements to assess long term viability of company
– Check out Brismo site to gauge investor confidence in the platform
Loan Selection Risk The loan you’ve selected is not repaid – Only invest in loans that come with a buyback guarantee
– Diversify by investing a max of 10 euro in each loan
Loan originator selection riskThe loan originator listed on the P2P platform goes out of business – Invest in loan originators that score about 50 in our table
– Spread your investments across minimum 20 loan originators
Group Guarantee RiskOne particular entity for the loan originator goes out of business, while the rest of the business carries on as normal – Same as above
– Invest in loan originators that have a group guarantee or stand alone entities with a solid financial performance.
Black Swan Events All other events Be ready to react. Accept event if you can’t do anything and move on!

So now you understand the risks, lets get into our investment strategy. Feel free to copy ours but now that you understand what the risks are, why not create your own strategy? Everyone has their own risk tolerance, is at different stages at their investment journey and can risk different levels of capital. We would describe our risk tolerance as medium – high, so try find your own risk tolerance and invest accordingly.

Our Mintos investing strategy in a nutshell is:

  1. Using the autoinvest tool primarily, and manually picking loans on occasion.
  2. We set the max amount per loan to 10 euro to reduce loan selection risk.
  3. We set our max loan term to 36 months, so that our capital is not tied up for too long and we can re-assess and adjust for changes in risk profiles.
  4. We want loans that offer any return greater than 10%.
  5. Invest only in loan originators that score above 50 in our table here, selecting a minimum of 20 loan originators at a time.
  6. Invest in Loan originators that have a “Group Guarantee” or the entity itself is performing well.

So there you have it. Everything you’ll ever need to know about everything. Not really! The landscape is forever evolving, Mintos is constantly updating and coming out with new features that bring different risks, and we as intelligent investors need to check in at least every once in a while to see if our original ideas still hold true. Why not save down this link, share and check in again for updates!

Don’t agree with some of our content? Brilliant, we would love to hear your thoughts below (Good and bad!) Our strategy is constantly evolving and you can help plug any gaps that haven’t seen yet.

This post contains affiliate links, some of which include a sign-up bonus for you. These help keep us motivated to producing content such as this so your support is appreciated!

Sign up here with Mintos to receive a bonus on investments made or why not check out our bonus page to see what other offers are currently available!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s