Whats is the process of tax reporting of P2P lending?
Same as any bank account with interest earned?
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Yes, correct. I just added my positions to the asset list like a bank account (converted the values to CHF when needed as required by the tax form).
As document I got an overview from Lend and from Mintos which I added to the tax declaration documents.
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Lendy is being liquidated. As you said @Cookie the market is maturing.
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If only I could have predicted Collateral administration tooā¦
You have to be fairly brave to be in P2P now
Iām only using for the UK savings tax allowances and only in ālower riskā (Assetz Capital QAA or Mintos buyback)
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Welcome aboard, @Analyst!
Would you care sharing your experiences and recommendations with the P2P lending platforms youāve tried here?
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Donāt do it, is my advice. You would be exposing yourself to undefined and unpredictable risk, for returns which are not worth your time. The loan originators can close up shop or be swept out with regulatory changes (as recently happened in Kosovo), and you risk being left with 100% loss.
On the legal side, P2P gains are income, not capital gains, which means the returns should be taxed with your marginal rate, bringing down any potential gains even lower.
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First of all, I do not want to make any recommendations here because I am aware that there is a certain risk of total loss. This is why I have limited my P2P investments to max 5% of my portfolio. In order to create diversification, I spread my investments over a few platforms. So far, I have had no losses.
My criteria is an autoinvest feature, since I donāt want to spend time to managing all the loans manually, all platforms listed have an autoinvest function. All platforms also offer a Ā«Buy BackĀ» guarantee, meaning if the loans are delayed by more than 60 days, you will be repaid. So far it happened a few times and worked well.
The biggest platforms, Mintos (Invest & Access) and Bondora (Go & Grow) have the option to access the funds at any time, of course the question remains what happens if everyone wants to get out at the same time ā¦
I chose Estate Guru to diversify more as they operate in construction loans
Current performance data:
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Bondora (Go & Grow) 6.75%
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Mintos (Invest & Access) 10.7%
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PeerBerry 11.2%
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EstateGuru: 10.5%
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Robocash: 12%
Currently Iām getting out of Robocash, as the platform has changed its corporate structure so that it is no longer trustworthy for me.
A good source is https://passives-einkommen-mit-p2p.de (Can recommend the podcasts as well) Last year I visited also an interesting MeetUp in ZH regarding P2P which I can recommend: https://www.meetup.com/de-DE/P2P-Crowdlending/ The organizer gives a good introduction to the topic and makes live demonstration with its own P2P investments
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My experience:
Iāve been in crowdfunding since may last past year. At first I started really slow because I was afraid but after some months trying, I decided to invest a bigger amount. In total I had more than 50kE invested.
I had Bondora, Crowdstate, Envestio, Viainvest, Fastinvest, Mintos, Estateguru and Grupeer.
I closed all the acounts except Mintos, Grupeer and Estateguru, mainly because I have still some loans that I cannot recover.
The results? Wellā¦ not too well. In total, with the currency movements, in CHF I had:
- TTWRR: 1.32%
- IRR: 1.61%
If I do the global in EUR (no currency exchanges):
- TTWRR: 7.06%
- IRR: 9.92%
I decided to stop all the investments and recover the money as soon as possible when has been proved that the platform Kuetzal is a complete scam, a ponzi system and probably nobody is going to recover the money.
Mintos had 3 or 4 loan originators with problems, in Kosovo, etc. Is a long history and you can find lots of report in internetā¦ For me, from 2482 EUR of benefits, I have blocked with Monego, iuCredit, Afortiā¦ 2300EUR, so practically I didnāt have any benefits. Still there is not completely lost but for the moment they are not payingā¦ soā¦
In Estateguru, I have 102 EUR of incoming but a load default and Iāve lost 68EUR that I donāt know if Iāll recover. That was 4 months ago.
To finish, I discover lots of bad histories about how the loan originators recover the 20, 30 and 35% interest loans given in several poor, poor countriesā¦ I donāt want to win money with the miseries and poor people in Africa or Russia.
So, my strong recommendationā¦ There are several REITS and ETF for gaming with money you donāt need. A simple research will give you instruments with 9, 10, 11% interest and at least they are regulated, and safer to invest.
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Thanks for the post. On Mintos, I assume you eventually got your Money back due to the Buyback guarantee?
Thanks a lot. However, I understand that Bondora does not have buyback guarantee.
No. The buyback works if and only if the lender is working. In the case of Monego, Aforti, etcā¦ They said that they are working for recover the money but for me I have still 2.3kE blocked. I cannot sell it and I donāt have the money.
This is the letter that Mintos sent to me about this problem:
On the last days of 2019, Mintos representatives met with the Central Bank of Kosovo (CBK) appointed liquidator for Monego in Prishtina, Kosovo.
The aim of the meeting was to establish the initial contact, voice our interests and details of creditorsā claims against Monego and to outline next actions.
At this point, the process of the liquidation of Monego is in its initial stage. All involved parties with a claim towards the lending company, so called - creditors, are being asked to submit their creditorsā claims. Investors on Mintos hold a claim against Monego issued loans in which they have invested. This claim has been confirmed as a first priority claim which means the interests of investors on Mintos are among the first to be satisfied out of all Monego assets which the liquidator shall distribute to the creditors.
The role of the liquidator in the liquidation process is primarily designed to ensure liquidation process being handled in line with the law, which entails satisfaction of the creditorsā claims in line with the law.
Mintos shall submit the creditorsā claims on behalf of and in the interests of the affected investors on Mintos platform. Creditors can submit their claims until the beginning of February 2020.
After that the liquidator will assess the submitted claims and prepare a list of creditors determining the sequence of their rights for the returns. The date for the final accounts list announcement is not set yet.
We will keep you posted on any further updates.
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Buyback is a hoax to dress up risky investments as safe. Donāt fall for it.
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@glina: you still have some money on Mintos? If yes how much did you put on it?
Completely agree with @glina.
In fact, I could live without buybackā¦ itās not important. Let me explain why.
When I invest in high risk products I admit a certain number of unpaidā¦ No problem with that, is what the banks they do. They know that a 2, 3% of people they are not going to pay.
So, imagine that like me you invest 10000 Euros in Mintos. Since you are a good investor, you diversify inā¦letās say 10 LO (Loan Originators). Each they have an unpaid rate of 2 or 3%. So you accept that and at the end you come with 10-3= 7% of ROI. Cool. If you have the famous buyback, you get the 10%. Perfect.
Now, the problem comes when one of the LO go bankrupt, they are a scam or like the case in Mintos, the Central Bank blocks the LO. There is the problem!
Now, you get -1000Eur from your investment or -10%.
After one year, you should have 11000 Euros and you have 9900. Not even recover the initial investment.
In Mintos I had 40kE in the peak. Now I have blocked 2300 and I had in the year 2500 of benefits, soā¦I won around 200 Euros. Doesnāt deserve my time, honestly.
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@Tino: this is probably one of the best post I have seen so far. Right now, everybody gets super excited with Mintos and P2P investments and I am not sure many understand the risks associated.
However, isnt it possible to mitigate this risk by diversifying with more LO and allocating a bigger % to the higher ratings (sorry if this sounds naive)?
Wellā¦ you are right. If you do the work of checking the accounts, the finances, etc. of every LO, probably youāll finish with 3 or 4 valid, no more 
The most they are opaque, they donāt disclose they accounting, not audits, nothing.
If for exemple you had diversify in 20 project in Kuetzal, probably youād lost everything!! They are not paying any project because most are fake. Just check: https://financiallyfree.eu/concerns-about-kuetzal-is-kuetzal-a-scam/ or https://explorep2p.com/kuetzal-questions/ and read the hundred of comments.
Another that they say is going to be the next are Envestioā¦
Check Fastinvest also, they donāt disclose de LO!!! So, basically you donāt know where is going your money.
I found several, several loans in fastinvest announcing: "Loan to spanish woman with salary of 2300 EUR loan of 400Euros at 12%ā¦
Well, Iām Spanish and I can tell you that this is a fake, for sure. Nobody having 2.3kE per month request a loan of 400 Euros at 12% in Spain, nobody.
So, my experience after one yearā¦ negative. I prefer, as I said before, investing in REITS, tobacco or petrol companies with a 5, 6 or 7% .
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I believe Mintos is fully legitimate and you are able to reasonably manage your risk by careful diversification both by originator and by country exposure. There is an excellent blog, updated regularly, where financials are analyzed
As it happens, all of the defaults which happened until now were easy to avoid as these originators occupied the bottom of the list (highest risk). The Kosovo license event was, however, not lender related. You just cannot get rid of the risk completely.
After some careful considerations, I simply see no viable reason to invest in P2P as the stock/bond market is a safer and a regulated environment with virtually no risk of a 100% loss (contrary to P2P) and likely better returns.
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I think if you have time and interest about investing overall, some of the more legitimate P2P platforms offer good opportunity to learn and experiment this space. You can get few percentage points extra if you diversify well - as a compensation for your time.
I think in future we will see more P2P or crowd funding in funding debt - democratizing or āuberizingā classic bank duties. So there might be value in learning how it works- who knows it might be the future of fixed income portions?
Well, another case that begins to āsmell badā: Envestio, they have even closed the web ā¦
I hope itās just a technical problem but looks bad.
There are several groups that are organizing themselves and in the Envestioās blog they talk about the classic excuses: āThey are trying to sink us ā¦ā, āThe forces of evil ā¦ā, hackers, etc. etc.
If you have money there, nothing can be recovered at the moment. The information in the Telegram group says that since January 12, 13 no one has received any money from the transfers.
Following the collapse of Kuetzal and Envestio, two more originators, Monethera and Wisefund have just announced suspension of Buybacks. There goes the guarantee 