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JTMan

Does anyone have a winning Mintos strategy?

Why creating your robotic auto invest criteria, what criteria are you using?
- Are you going with all 5 countries? or excluding any?
- Are you going with all 10 loan originators? or excluding any?
- Are you going with all 5 loan types? or excluding any?
- Are you bothering with buyback guarantee?
- What minimum loan rate are you setting?

lcwill

JTMan wrote: »

Does anyone have a winning Mintos strategy?

Why creating your robotic auto invest criteria, what criteria are you using?
- Are you going with all 5 countries? or excluding any?
- Are you going with all 10 loan originators? or excluding any?
- Are you going with all 5 loan types? or excluding any?
- Are you bothering with buyback guarantee?
- What minimum loan rate are you setting?

I have split my Mintos portfolio into two sections by setting up two autobids - one for 75% of my portfolio which focuses on loans with buy back guarantee, interest of 10-15%, max investment per loan of E10, max LTV of 70%, current mortgages, car loans and business loans, in Estonia, Latvia and Lithuania.

The other 25% is for loans without a guarantee but interest between 12-15% and all other criteria are the same.

I also occasionally invest in invoice financing, and pick up pieces of older guaranteed loans with higher interest rates on the secondary market if they are selling with a discount or no premium.

I set these up a while ago before a lot of the new originators joined and new countries became available and chose criteria based on a couple of hours playing with Mintos data to work out which criteria were correlated with higher default risk (no fancy modeling just playing with pivot tables as my skills in this area are weak).

So far I have a return of 10.98% and about 85% of loans are current and 15% with some delay but nothing over 60days. A few delays are ok and you are compensated with late payment fees.

My 70% LTV criteria slows things down a bit but higher LTV have higher default rates and I imagine recovery is lower too.

I am aiming for 10% return before taxes because the higher liquidity and transparency makes the whole thing less risky than LF where I am going for 13-14%.

at9qu5vp0wcix7

lcwill wrote: »

I have split my Mintos portfolio into two sections by setting up two autobids - one for 75% of my portfolio which focuses on loans with buy back guarantee, interest of 10-15%, max investment per loan of E10, max LTV of 70%, current mortgages, car loans and business loans, in Estonia, Latvia and Lithuania.

The other 25% is for loans without a guarantee but interest between 12-15% and all other criteria are the same.

I also occasionally invest in invoice financing, and pick up pieces of older guaranteed loans with higher interest rates on the secondary market if they are selling with a discount or no premium.

I set these up a while ago before a lot of the new originators joined and new countries became available and chose criteria based on a couple of hours playing with Mintos data to work out which criteria were correlated with higher default risk (no fancy modeling just playing with pivot tables as my skills in this area are weak).

So far I have a return of 10.98% and about 85% of loans are current and 15% with some delay but nothing over 60days. A few delays are ok and you are compensated with late payment fees.

My 70% LTV criteria slows things down a bit but higher LTV have higher default rates and I imagine recovery is lower too.

I am aiming for 10% return before taxes because the higher liquidity and transparency makes the whole thing less risky than LF where I am going for 13-14%.

Surely a 13-14% return on LF is out of the question given the interest rates and loan term? (36 months). Interesting strategy however, I like how Mintos let you download their loan data into Excel to make your own decisions.

lcwill

Mila Calm Ax wrote: »

Surely a 13-14% return on LF is out of the question given the interest rates and loan term? (36 months). Interesting strategy however, I like how Mintos let you download their loan data into Excel to make your own decisions.

The transparency with the data is so valuable and really helps make decisions.

This issue with interest rates on LF is a common topic of discussion here!

The rate you get is the average for the total outstanding portfolio (total lent minus repayments). You have to keep relending your repayments and you will get your 13-14% per year on the whole portfolio.

Don't think about the return on individual loans over the entire loan term as the interest is paid on the outstanding capital so it declines as you get repaid. I think this is normal elsewhere too.

at9qu5vp0wcix7

There is a glitch with the Betcon loan right now - showing €35k of funding being live, despite it being a €25k loan. Beware if you think you're getting a good interest rate etc.

sceach16

Mila Calm Ax wrote: »

There is a glitch with the Betcon loan right now - showing €35k of funding being live, despite it being a €25k loan. Beware if you think you're getting a good interest rate etc.

It is showing 25k. Did U tot live loans ? I am missing something!

at9qu5vp0wcix7

sceach16 wrote: »

It is showing 25k. Did U tot live loans ? I am missing something!

I put the data into excel since it didn't look right to me - and got €34760 being live.

Cute Hoor

Mila Calm Ax wrote: »

There is a glitch with the Betcon loan right now - showing €35k of funding being live, despite it being a €25k loan. Beware if you think you're getting a good interest rate etc.

Well spotted, this is very poor form on LF's part, will be interesting to see if they get the problem resolved before loan closes

sceach16

Mila Calm Ax wrote: »

I put the data into excel since it didn't look right to me - and got €34760 being live.

It is stuck.....accepting bids. I bid 50 twice at 13.9. accepted but the bid which shd have been knocked out....Mursal....was not.

at9qu5vp0wcix7

sceach16 wrote: »

It is stuck.....accepting bids. I bid 50 twice at 13.9. accepted but the bid which shd have been knocked out....Mursal....was not.

You would need a bid of 13.1 to get in on the loan right now. I emailed them a while back, hopefully they notice.

sceach16

Mila Calm Ax wrote: »

You would need a bid of 13.1 to get in on the loan right now. I emailed them a while back, hopefully they notice.

How much was finally accepted?

at9qu5vp0wcix7

sceach16 wrote: »

How much was finally accepted?

12.9% definitely, and about half of the 13.0% bids.

Squall Leonhart

LinkedFinance seems to take a long time to invest a relatively small amount of money in. I joined in mid-March and deposited 500, so far I've only offloaded 200, with a further 100 still floating in the ether on closed bids. I go with 50eur loans.

On the flip side, I joined Mintos a week ago, deposited 100eur (showed up in account 3 days later) and put out 10 x 10eur loans on the first day.

at9qu5vp0wcix7

Squall Leonhart wrote: »

LinkedFinance seems to take a long time to invest a relatively small amount of money in. I joined in mid-March and deposited 500, so far I've only offloaded 200, with a further 100 still floating in the ether on closed bids. I go with 50eur loans.

On the flip side, I joined Mintos a week ago, deposited 100eur (showed up in account 3 days later) and put out 10 x 10eur loans on the first day.

Only managed to get €500 invested 5 weeks myself.

The deposit times for Linked Finance are a big advantage. You can instantly deposit money using a card. Mintos can be anywhere from overnight to 3-4 days.


Edit: The Betcon loan has been sorted out now, bids incorrectly listed as live have been refunded.

m320325

Just wondering if other lenders agree with me on this

If a loan is fully funded (above 100%), I BELIEVE it is MATHEMATICALLY IMPOSSIBLE to increase the average interest rate on a loan if I place a bid

(Remember if the current live rate is 14.6 then I must bid 14.5 or less)

Linkedfinance emailed me saying borrowers complained that my bidding tactics were increasing loan rates

"there is strategic bidding on your part, with the intention to keep interest rates as high as possible as the auctions near their close."

I believe Linkedfinance should be encouraging more bids as this actually reduces the interest rate for borrowers. They should explain this to the borrower instead of emailing me. I replied and told thrm it's impossible to increase the average interest rate, but they didn't admit they were wrong.

at9qu5vp0wcix7

m320325 wrote: »

Just wondering if other lenders agree with me on this

If a loan is fully funded (above 100%), I BELIEVE it is MATHEMATICALLY IMPOSSIBLE to increase the average interest rate on a loan if I place a bid

(Remember if the current live rate is 14.6 then I must bid 14.5 or less)

Linkedfinance (James) emailed me saying borrowers complained that my bidding tactics were increasing loan rates

"there is strategic bidding on your part, with the intention to keep interest rates as high as possible as the auctions near their close."

I believe Linkedfinance should be encouraging more bids as this actually reduces the interest rate for borrowers. They should explain this to the borrower instead of emailing me. I replied to James and told him it's impossible to increase the average interest rate, but he didn't admit he was wrong.

The only way I see this being possible is if you place huge chunks of €1000-€2000 on at 0.1% below the max live bid. It would take a significant amount of €50 chunks at lower interest rates for this to be rejected.

Was the email some form of citation?

sceach16

m320325 wrote: »

Just wondering if other lenders agree with me on this

If a loan is fully funded (above 100%), I BELIEVE it is MATHEMATICALLY IMPOSSIBLE to increase the average interest rate on a loan if I place a bid

(Remember if the current live rate is 14.6 then I must bid 14.5 or less)

Linkedfinance emailed me saying borrowers complained that my bidding tactics were increasing loan rates

"there is strategic bidding on your part, with the intention to keep interest rates as high as possible as the auctions near their close."

I believe Linkedfinance should be encouraging more bids as this actually reduces the interest rate for borrowers. They should explain this to the borrower instead of emailing me. I replied and told thrm it's impossible to increase the average interest rate, but they didn't admit they were wrong.

I try and get as high a rate as practical. I am a lender looking after myself. Maybe Linked could start a forum for lenders...

m320325

Mila Calm Ax wrote: »

The only way I see this being possible is if you place huge chunks of €1000-€2000 on at 0.1% below the max live bid. It would take a significant amount of €50 chunks at lower interest rates for this to be rejected.

Was the email some form of citation?

How so?

If it takes a significant number of 50s to remove the 2000 then I must have removed a significant number of 50s above my rate, which reduces the rate

I've lent Euro2,000 to many businesses in the past, but I'm no longer lending until they admit their mistake

m320325

sceach16 wrote: »

I try and get as high a rate as practical. I am a lender looking after myself. Maybe Linked could start a forum for lenders...

Yes I've suggested this and also removing the 8% default rate, but they are slow to do anything

at9qu5vp0wcix7

m320325 wrote: »

How so?

If it takes a significant number of 50s to remove the 2000 then I must have removed a significant number of 50s above my rate, which reduces the rate

I've lent 2,000 to many businesses in the past, but I've no longer lending

I am thinking you are right, although it is still confusing.

It is bizarre that they would take issue with you though. If their system allows this, then it is their own issue. It isn't a charity

Squall Leonhart

sceach16 wrote: »

I try and get as high a rate as practical. I am a lender looking after myself.

Mila Calm Ax wrote: »

It is bizarre that they would take issue with you though. If their system allows this, then it is their own issue. It isn't a charity

Exactly, most of us are investing in things like this to get a good return on our money. Playing it smart isn't illegal or immoral in any way, it's looking out for yourself. Sure, borrowers may not like it, but it's completely above board. It reminds me of casinos refusing admittance to people who are known card counters, in that it's not illegal, just not liked by the casino!

Wheety

m320325 wrote: »

Just wondering if other lenders agree with me on this

If a loan is fully funded (above 100%), I BELIEVE it is MATHEMATICALLY IMPOSSIBLE to increase the average interest rate on a loan if I place a bid

(Remember if the current live rate is 14.6 then I must bid 14.5 or less)

Linkedfinance emailed me saying borrowers complained that my bidding tactics were increasing loan rates

"there is strategic bidding on your part, with the intention to keep interest rates as high as possible as the auctions near their close."

I believe Linkedfinance should be encouraging more bids as this actually reduces the interest rate for borrowers. They should explain this to the borrower instead of emailing me. I replied and told thrm it's impossible to increase the average interest rate, but they didn't admit they were wrong.

I can't see how you are keeping rates high. You can't really bid higher than a rate which has already been rejected. If you bid last minute at a lower rate, you only knock out people higher than that rate.

m320325

Wheety wrote: »

I can't see how you are keeping rates high. You can't really bid higher than a rate which has already been rejected. If you bid last minute at a lower rate, you only knock out people higher than that rate.

they claim if I bid 2000 just under the higher rate, it takes many Eur50 bids to remove my 2000.

Then are ignoring the fact my large bids has knocked out people higher than me, thereby lowering the rate.

They replied saying they 'genuinely appreciated my points' but didn't admit they are wrong about me increasing the interest rate.

Quotes from their first email:

"The feedback is that there is strategic bidding on your part, with the intention to keep interest rates as high as possible as the auctions near their close."

"As a general rule we don't give direction on what lenders should do in the auctions, but some of your recent tactics seems to be a deliberate attempt to stop loans coming to their natural conclusion and interest rate. This is having an impact on other lenders and specifically borrowers."

"We have had a few loan rejections recently due to high interest rates and your tactic is exacerbating the problem."

"We would very much appreciate if you would reconsider your bidding strategy."

at9qu5vp0wcix7

One investor has €8000 on the Cairn Construction loan @ 7% - is that not a bit weird?

Wheety

But0325 wrote: »

they claim if I bid 2000 just under the higher rate, it takes many Eur50 bids to remove my 2000.

Then are ignoring the fact my large bids has knocked out people higher than me, thereby lowering the rate.

They replied saying they 'genuinely appreciated my points' but didn't admit they are wrong about me increasing the interest rate.

Quotes from their first email:

"The feedback is that there is strategic bidding on your part, with the intention to keep interest rates as high as possible as the auctions near their close."

"As a general rule we don't give direction on what lenders should do in the auctions, but some of your recent tactics seems to be a deliberate attempt to stop loans coming to their natural conclusion and interest rate. This is having an impact on other lenders and specifically borrowers."

"We have had a few loan rejections recently due to high interest rates and your tactic is exacerbating the problem."

"We would very much appreciate if you would reconsider your bidding strategy."

But a €50 bid at a lower rate in that situation would knock your bid amount down to €1950. I've seen it happen where only part of my bid has been accepted and some of it was returned.

sceach16

Mila Calm Ax wrote: »

One investor has €8000 on the Cairn Construction loan @ 7% - is that not a bit weird?

5 Bids....obviously hapy to bid at that rate. Whatever turns him on is fine for him. Not for me to judge!

m320325

Wheety wrote: »

But a €50 bid at a lower rate in that situation would knock your bid amount down to €1950. I've seen it happen where only part of my bid has been accepted and some of it was returned.

But in that situation it's still better for the borrower

They now get 1950 at 14.2% and 50 at 14.1%

That's a slightly lower rate than
2000 at 14.2%

Or have I missed your point?

Linkedfinance are saying the borrower is paying a higher rate

Wheety

m320325 wrote: »

But in that situation it's still better for the borrower

They now get 1950 at 14.2% and 50 at 14.1%

That's a slightly lower rate than
2000 at 14.2%

Or have I missed your point?

Linkedfinance are saying the borrower is paying a higher rate

No, that is the point I was making.

Not sure the people at LinkedFinance understand this which is a bit scary really.

strettie

m320325

I find this an utterly shameful piece of correspondence from Linked Finance. Yes you are right you are not increasing the average loan rate . Do they not realise this is what peer to peer auction based lending is. you can bid any amount at any rate plain and simple. You are as entitled to bid the highest rate possible as someone who bid only 6% on the same loan.

But I wonder is a late high bid near the top rate causing them a different problem with the loan appearing overfunded to the borrower, I have noticed that part bids are not refunded automatically by the system at close of loan and they are maybe having to do it manually
for example

1 second to go in loan for 20000 and over 100% funded

highest bid is 100 @ 14.7 no other lenders at 14.7
you enter 2000 @ 14.6 knocks out the above bid and loan closes but the amount raised is now 21900.

I have been downloading the final lender lists for a few loans over the last few weeks and if the top bid is a large bid the lender list total is higher than the loan amount

TheSheriff

@m320325

I see absolutely nothing wrong with what you are doing. This is P2P lending, we want the highest rate possible.
Linkedfinance need to reconsider their business model if they are going to take to individually emailing lenders to encourage them to change their tactics.

Without tactics such as these you could easily take your money elsewhere.