Bondora review
7.5
(our review)
Bondora offers consumer loans. As an investor, you can invest directly in these individual loans. In our latest review, we rate this p2p platform a 7.5. The editorial team at Investmentplatforms.eu has been active on Bondora for years and tested its options for investors.
Content:
Note: online investing through Bondora carries risks, and you may lose (a part of) your investment.
What characterizes Bondora
Active since 2007, Bondora is one of Europe’s oldest and largest p2p platforms. It is based in Estonia, with 70 percent of loan applications originating in its home country in 2020. As of mid-2024, the platform has issued almost a billion euros in loans. It claims to have been profitable since 2016.
A unique feature of Bondora is the cartoon characters on its website and branding, reminiscent of characters like Elsa and Anna from Disney’s Frozen, though in race or astronaut outfits.
Bondora is often compared to other large peer-to-peer platforms like Mintos and PeerBerry and Debitum.
Bondora in numbers
P2p lending is often known for high-interest rates, and Bondora is no exception. At the time of this review, the average rate is 24 percent, but the average net return is much lower at 6.4 percent, reflecting the risks associated with peer-to-peer loans.
With a multi-year return of 6.17 percent, even we have not achieved the average. Investing in personal loans, ranging from 500 to 10,000 euros, is possible from as little as one euro. With terms between three and 60 months, and an average of 53 months, Bondora is focused on medium-term financing.
The average interest rate is around 24 percent, with a much lower net result of 6.8 percent.
Offerings: p2p loans
On Bondora, you invest in consumer credit. These loans are typically taken out by consumers who lack favorable credit options in their own country, often due to non-competitive credit markets or adverse macroeconomic factors.
To assess the risks as an investor, Bondora uses risk profiles, assigning each borrower a credit rating. This rating helps lenders gauge the likelihood of receiving principal and interest on time.
In addition to choosing individual loans, Bondora offers an automated investment option called Go & Grow, which invests automatically at fixed interest rates.
Fixed interest via Go & Grow
While you can choose individual loans, 92 percent of investor portfolios have also invested in the Go & Grow program. This sets Bondora apart from other p2p platforms. At the start, you answer a few questions, set your investment amount and term, and receive a forecast.
The first portion of your investment earns a 6.75 percent return, with a standard monthly deposit limit of €700. Older accounts may have higher limits. For higher deposits, the return drops to up to 4 percent. The company outlines the full terms in the video below.
The platform also offers a fixed annual return of 6.75 percent.
Bondora usability
Bondora is available in several languages. Next to English we tested German and Dutch, though the translations can sometimes seem a bit artificial. At Investmentplatforms.eu, we find the English texts slightly better, but the choice is yours.
In terms of usability, Bondora is user-friendly. If you plan to invest in the Go & Grow program, it’s advisable to familiarize yourself with its process. Without reading the terms first, you might quickly end up investing at the lower rate of 4 percent.
To maximize the higher rate, you can set up a direct debit to make monthly deposits at the higher rate. Alternatively, you can start with a one-time deposit and manually add funds alongside an automatic contribution.
Secondary market
Bondora also offers a Secondary Market, allowing you to sell loans during the term. However, this can significantly impact returns. Manual investments in loans via the Secondary Market are possible, though Bondora warns of potential risks.
Manual investing through the Secondary Market is a highly risky strategy and often results in lower net returns (or even losses).
Bondora in Europe
European users have been able to invest via Bondora since early 2019, now available in 24 languages.
Within Europe, the platform mainly attracts investors from the UK and Germany. Most loans originate from Estonia, Finland, and Spain.
Customer Service in English
Customer service is somewhat limited, offering only email support in English or German. During our review, we asked questions at various times, and responses could take a while during busy periods.
Fees
Investors pay 1 euro per withdrawal. Borrowers cover Bondora’s fees. There are no fees for account setup, and the platform does not charge management fees.
Reliability and Risks
Bondora was founded in 2007, making it over fifteen years old. Over the years, it has become a reliable and profitable platform. However, the risk of investment here is high, especially if you select loans individually.
Compared to (deposit) savings, Bondora offers a good return, but it’s not a bank and does not fall under the deposit guarantee scheme. Returns on the platform are not guaranteed, and certain terms apply to the rates advertised in the Go & Grow program.
Compared to other p2p platforms, Bondora is one of the more reliable. Since March 21, 2016, Bondora AS has held a credit license from the Estonian Financial Supervisory Authority (FSA), the main regulatory body in Estonia. KPMG Estonia, based in Tallinn, provides audit services for Bondora. Erki Mägi from AS PricewaterhouseCoopers in Tallinn is responsible for Bondora’s internal audit reporting, ensuring thorough oversight.
Review Score: 7.5
In our latest review, we rate Bondora a 7.5 out of 10. With returns reaching over ten percent, Bondora is certainly interesting compared to other investments. However, the platform also comes with relatively high risks, and many investors find it challenging to exceed the platform’s average returns.
We did not achieve this ourselves, but this was expected given our investments in the Go & Grow program. For investors looking for passive investment options and higher returns than savings, the stable interest from this program offers a valuable alternative, though the deposit limit for the highest rate may be too low to maximize the benefits.
