In August 2016, my father said he had started using Bondora after reading an article of how some guy's teenage daughter puts 5€ from every allowance she gets there. I had heard of Mintos, Bondora (no link as I wish you well) and maybe some more platforms but the whole field seemed a bit sketchy as P2P lending was and is not an old and respected way of investing. At the time, it was even more fresh, most platforms that existed were not even two years old yet. Most platforms we have today, had not been founded.
As recommended by fatherly authority, I decided to try Bondora out. I also trusted it more than Mintos just because it is an Estonian company and Mintos is Latvian. No real research was involved but I remembered that Latvian economy did not do well in The Great Recession some years earlier.
The thing about Bondora's interface was, and probably still is, that it shows you prominently how much exactly you could earn from a loan if the interest was truly paid fully and on time. I believe many people using the platform saw that as a guarantee on future return. It obviously wasn't and there must have been plenty of disclaimers about it in the platform's legal documents. Yet the high interest loans were very popular and were bought up fast.
There was also a basic profile of the lender listing their income, number of dependents, financial responsibilities, etc. Based on the latter, most of these people should not have needed loans to begin with, specially ones with preposterous interest rates. Which shows how unreliable such data probably was.
I started seeing that there were many high interest loans on secondary market, being sold with a 40% premium. At first, I didn't believe anyone would ever buy them -- 5 euro loan piece for 7 euros. I wanted to try this strategy out myself and got a hold of high interest loans which I resold with a moderate premium. Pieces of the same loan would also be sold at lower premiums, which were bought up first until, eventually, even the 40% ones were sold. I saw that the 40% (maximum premium) strategy really worked and started buying the high interest loans with lower premiums and reselling at 40%. It usually took 1-2 weeks to complete the cycle.
Main issues with this were that I wasn't able to get a hold of enough 5-10 euro pieces of high interest loans and everything I did was done manually. Eventually, I would have needed some automation to continue. The platform was moving more towards automation and I wasn't able to acquire the loans without it.
This left me with the bleak opportunities the site offers in general -- uninsured loans from people who cannot or will not ever pay the ridiculous interest rates. Overall, I only ever deposited 350 euros there and withdrew 150 after the described period, from around mid-2016 to beginning of 2017, with the account value remaining at ~350.
Ever since then, the account has been mostly running itself and generating consistent losses. In 2020, I sold some loans and transferred them to Bondora's Go & Grow product since then I won't at least have to pay income tax for the interest that does accrue even though it is smaller than the losses in overdue principal that will never arrive. Please enjoy the screenshot of my current account status in March 2021.
This experience left me feeling like P2P lending was mainly a way to lose money and I didn't return to it until 2020.
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