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Not Just Dividends - An Intro into P2P Lending

Why Just-Dividends is not enough

The blog is branded Just-Dividends because dividend growth investing is and will continue to be my main investment strategy to generate income and fund my family’s lifestyle for years to come. However, diversifying a portfolio over different un- or weakly correlated asset classes may provide an extra cushion of protection for one's overall wealth in the long run as we cycle through varying market conditions.

With this in mind, I set a goal for this year to build up 5% of my Portfolio in different asset classes including Peer to Peer Lending (P2P), as well as Cryptocurrency or precious metals like Gold. As a first step towards this goal, I researched the current state of these different options. One major criterion for finding the right additional investment for me was a safety net due to the current economic uncertainty caused by the pandemic. This research ultimately led me to decide on diving back into P2P lending.

Previous Peer To Peer experience

I first heard about P2P lending in 2017 when I started following personal finance focused channels on YouTube. Nearly every channel was affiliated with at least one platform and videos on comparisons of the different platforms were very popular at that time. Additionally, the German platform auxmoney had a big TV advertising campaign focused on P2P lending being the modern medium of choice for lenders as well as borrowers.

Lured in by the promises of a 10% annual yield I initiated a small portfolio worth 2000 EUR at the time. I was amazed by how easy it was to split up this large sum into smaller investments of 25 EUR per loan for an initial total of 80 loans. Geographically the platform was, and is still, limited to investments within Germany.

Despite this limitation, the strategy seemed like a sound plan to diversify properly across all age groups and loan types, and for the first little while it worked out. Payments were on time and I was able to reinvest the returned interest and principal into new loans.

But the bright side didn’t last long. A quarter later I noticed the first couple of missed payments and even loans that went to collections or were sold completely as the borrowers were unable to keep up their end of the bargain. My annual return in total dropped to 6.82%, which is still an acceptable return but nowhere near the advertised 10%.

I decided to end my P2P contribution journey with auxmoney the same year I began investing. 2017 also proved to be the year where I applied for permanent residency and ultimately moved to Canada which showed me another P2P challenge. While these loans are usually easy to manage, they are generally not as liquid as stock. With auxmoney being a platform that doesn’t offer a secondary market (a market that allows you to sell your outstanding share of a loan), I had to wait until all loans were paid to take my money out. To tell you the truth, I’m still waiting for around 200 EUR of outstanding principal and interest to this date.

Overall, after more than 3 years of being invested, my auxmoney journey can be described as shown below:


- 6.82% annual return

- 92 loan investments for a total of 2,300 EUR

- Average share per loan 25 EUR

- Average loan interest 12.28%

Mintos as my platform of choice

With all this negative experience you might ask why I would engage with this asset class again and why I would use a European startup, based in Latvia, instead of the Canadian platform Lending Loop.

The answer is rather simple: Mintos provides answers to most of the problems I noticed during my first experience.

For starters, it offers a secondary market, so terminating your investments becomes much easier than ‘waiting it out’. Although they have introduced a service fee for using the secondary market ever since the pandemic started, having this option is a must in my opinion for any platform. You never know what life may throw at you when you least expect it.

Mintos also offers a buyback guarantee for a subset of loans available. This guarantee will pay back your outstanding principle as well as accrued interest income if the loan payments get delayed by more than 60 days. This guarantee is the biggest plus of the platform and the reason why I stay away from local competitors like Lending Loop.

The guarantee together with the option to automate your investments makes Mintos a great investment vehicle for investors anticipating a long-term commitment. Whether you want to add a small amount of capital every month, or just want to deploy capital once and let it grow, setting up an automated reinvestment plan takes care of investing your returned principal and interest back into secured loans and makes it easier to keep your money working for you.

Mintos also offers outstanding geographical coverage with loans available in 5 continents around the world. While not all loan originators in the different countries provide buyback guarantee coverage, the filters on the platform allow you to configure your automated investment to only use covered loans.

To learn more about the countries covered within Mintos you can check my loan portfolio. All loans listed in this portfolio are covered with a buyback guarantee and I will update my progress periodically at the end of each month.

Currency Conversion

When using foreign platforms, it is always worth having a look at the currencies they support. As Mintos is a European platform the main currency supported is EUR and I would suggest using it to avoid additional currency conversion fees.

During my move from Germany to Canada, I learned to love the platform Transferwise. Compared to other electronic payment processors like Paypal or traditional banks, it offers the lowest conversion rates available at the time of transfer.

I use their services twice a month to transfer a small portion of my salary into my Mintos investment account. Using Transferwise you’ll be met with a choice of different payment options and the process of transferring your capital usually takes 2-3 days in total.


I personally invest in Mintos and the links provided to the platform are affiliate links for the Mintos Refer-a-Friend Program. If you decide to invest using this platform you and I will get a bonus depending on the initial deposit when funding the account. More information can be found here.

The link to the Transferwise platform is an affiliate link under the terms of their invite a friend program. Transferwise will offer a discount on your first currency transfer and the full terms and conditions of the program are listed here.

Closing Words

Thank you for following along on one of my longest articles to date. I hope you enjoyed reading about my journey through P2P lending. Since I plan to stay invested with the Mintos platform for the long-term, I intend on providing updates about my P2P portfolio at least once a quarter moving forward to align with the current representation of this asset class within my overall investments.

Have you tried P2P lending? I would love to hear from you about your experiences with asset classes other than stocks if you have them!

Post Comments(5)

MyFinancialShape Aug. 1, 2020, 5:15 p.m.

Hi Thank you for sharing your experiences with Mintos. I started P2P investing in summer 2019 mainly to diversify our income streams and put „parking money“ that had be in corporate bonds to work in a more efficient and productive way. Currently I am investing on Mintos, Bondora, Iuvo, Evoestate and Crowdestate. P2P investing is extremely interesting, I’ve learned a lot and one can earn good returns passively. But there are specific risk factors one has to be well aware off (collapse of platforms, scams, defaults etc.). It might be interesting to consider investing a small percentage (3 -5 %) into that asset class. currently I prefer strengthening my dividend stock portfolio and my tech holdings. Cheers

Just-Dividends Aug. 3, 2020, 1:11 p.m.

This is awesome MyFinancialShape ~ for me, Mintos is currently a really small part of my portfolio (<2%). I really like the geo-diversification it offers and want to build my allocation up to around 10% eventually.

Rick Rodriguez Aug. 30, 2020, 5:14 a.m.

I must say that you have a great strategy. I’m just getting started with investing in dividends, so I have a long way to go. It is very valuable that you share your experience.

Just-Dividends Aug. 30, 2020, 7:37 a.m.

Thank you for your kind words Rick. Investing in total is a marathon rather than a sprint, but you're on the right track with getting started. Good luck on your journey.

Romisol May 9, 2021, 7:43 p.m.

I always knew they weren't fair

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