It's been over two years since I first invested in Peer2Peer credit markets. During this time I was able to gain a lot of experience with German platforms. Lendico has not convinced me at all yet, Auxmoney already. That's why I write about my experiences - with an integrated video in which I introduce the credit marketplace.
Contents [ Show ]
Auxmoney experiences at a glance
Credit platforms are booming. In recent years, the volume of transactions handled through the platforms has multiplied. Statista estimates the volume will more than quadruple, especially for business loans. Compared to banks, the volume is still low, but it is rising steadily.
Meanwhile, social lending has become one of the big in-topics of the fintech scene. Since 2008, the first P2P credit marketplaces in Germany have brokered private loans. My opinion in 2017 is after a two-year investment with Auxmoney and Lendico: The much better platforms exist abroad - especially in the Baltic States. Mintos , Viainvest , Estate Guru or Twino are the better alternatives.
Auxmoney has been in Germany since 2008 and has developed a lot since then . Even if there are other attractive alternatives abroad, the company is unrivaled for investors in Germany.
The financing of corporate loans at Zencap went bad and was then sold to Funding Circle, which currently does not get a foot on the ground in this country. Lendico did not convince me at all, so I withdraw my credit money there again. Answers to questions are in short supply here. In July 2017, Rocket Internet also sold its shares. And all the others are not (yet) worth mentioning.
Overall, in 2015, I invested just under € 1,200 over the two credit marketplaces. I have received back a good 100 euros since June. This is ten times as much as the interest on my call money account - albeit at a much higher risk. Meanwhile, I withdraw my money completely from Auxmoney and invest it in Mintos, Estate Guru and Viainvest .
Diversification is the magic word
You know that you should divide your wealth and your finances so that the individual investments correlate with each other as little as possible. And you should set the other to the degree of risk of your investments before, so as not to experience any nasty surprises. If you want to take very little risk, you as an investor should keep your fingers off Peer2Peer credit marketplaces.
I chose to invest only $ 1,200 there for testing to see how much time I have to invest, and above all, how high the return in relation to risk is at the end. And that's exactly where Lendico lost my trust a few months ago.
In part, I had six late payments with only 22 credits and a reasonable return of 5.55 percent. Of course, this is still more than on the call money account, but the default risk is simply way too high. And there's just too much lack of transparency in the Rocket Internet company.
You do not really see what kind of credit you are investing in. You have no photo of the borrower, no personal text, no further information on the loan and can not make you a personal picture. The inputs and expenses of the person, the credit rating and the Schufa information alone do not justify an investment.
Now there are still three loans that are overdue over three months and one of which has not yet paid a rate. I have already written off the 85 euros mentally. I have started to gradually transfer my money from the Lendico account. I do not even have an accurate overview of my monthly returns. So I have no overview of my finances at Lendico.
Beneficiaries Loans at Auxmoney
And one beneficiary of this is Auxmoney *, the second German platform I've tested. Here are my experiences much better. Everything is thoughtful and comprehensible and I can think carefully about where to invest my money.
At any time I can see how much money flows back monthly and how my performance. In addition, you can also have your bids on loans automated, which I made after a short test period but quickly again manually. First of all, an account is opened at Fintech Bank, the former biw bank.
The nice thing about Auxmoney is that intuition plays a key role in borrower applications. If you follow your once defined guidelines, you have a higher hit rate than if you only go by the interest rate, automatic reinvesting or other things. At Lendico, you have no way to do that.
My policies at Auxmoney are:
- No MRP compensation
- No debt restructuring
- No credit card debt
- No implausible requests (you see very quickly in the comments)
- No car loans
- No beggars and supplicants
- No spelling errors
- No borrowers with cat pictures (they actually exist!), Provocative pictures or other nonsense
You can believe me: There are only 2 percent left that are worth a second look. Then only the usual credit information from Auxmoney come to fruition.
On the stock market, you also have to check the key figures before buying a share, because otherwise the bad surprise might follow. This is no different for personal loans. Do your housework at the investment conscientious, otherwise you will suffer losses.
The credit rating of Auxmoney
Auxmoney offers three evaluation criteria to help better position borrowers. Basically, it is the same here as with the key figures of stocks. They are essential, but a single measure should not lead to a purchase. Meanwhile, Auxmoney has also summarized these details.
And the soft factors that I list above are even more important to me. For companies you have to look at the industry, the competitors and other factors. With a P2P credit, it is then just the above guidelines.
What is the Schufa Score?
The protection association for general credit protection, Schufa for short, collects information from contractors in order to prevent loan defaults and over-indebtedness of the person. For landlords or lenders, the Schufa Score is a reputable indicator to check the creditworthiness and to get an answer to the credit issues.
The rating ranges from 0 (very bad) to 1,000 (very good). For all borrowers below 410, the probability of default is high to very high. At less than 100, it is almost 35%. If the rating is above 410, the probability of default is only below 10%.
A detailed brochure about Schufa information can be found here. http://www.auxmoney.com/kredit/dokumente/schufa-auskunft-guide.pdf
What is the CEG traffic light?
The CEG traffic light is based on an easy-to-understand system from Creditreform Consumer GmbH. Here, the experiences of the payment behavior of relevant and representative groups of persons and cross-sectoral personal information are set in relation to the details of the borrower.
If the traffic light is red, negative data are available. If it is yellow, the probability of default is twice as high as the national average. And if it is green, there are no negative features and the probability of default is only half as high.
What is Arvato Info Score?
The Arvato Infoscore, AIS for short, is concerned with the probability of repayment of the loan repayment. If the value is below 390, only a 40 percent compliance probability is given. If it is above 460, the probability of fulfillment is approximately 95%.
Now you have read all my evaluation criteria and can make you a very good picture. If the credit ratings are all very good, you will also get less interest on the loan. Here a good mix is needed to get a decent return. That's why I have so many points in the eighth.
And my main rule is that if there's nothing on the first and second page of the credit marketplace, I'll wait a week and then look again. This ensures that I do not spend too much time. My time per week: a maximum of 20 minutes! No joke! And only if I want to invest. By 2017, this principle will no longer work because of the summary of the criteria.
This has now given me a return of over 14 percent and only a delayed loan, which is currently in Mahnstufe 2. Otherwise, everyone has always paid punctually. No comparison to Lendico, by the way, to rate loans with other numbers.
Investing in P2P loans: what you should know, how to avoid mistakes and invest successfully
- Lars Wrobbel, Kolja Barghoorn
- Publisher: CreateSpace Independent Publishing Platform
- Edition No. 1 (22.09.2016)
My experience as an investor with Auxmoney
However, Auxmoney has had a very clear disadvantage so far: lenders who invested in automated mode preferentially received the less risky A, B and C loans. Lenders that were looking for good credit in the marketplace were so out of favor, because all loans were financed immediately with the money of new investors. This has changed Auxmoney but so that now again low-risk loans are financed through the marketplace.
If you want to test Auxmoney as an investor, you can do it for free and without obligation. Here investors will be at Auxmoney! 
* You then need only through Auxmoney open an account at the biw Bank via Postident, transfer money and then get started. The current negative interest rates are taken over by Auxmoney.
Here I have made a video overview for you, which explains the platform in detail, answers to questions and shows how it works.
One of my readers made a very interesting comment on his credit investment experience at Auxmoney below the video. Look at that too.
Of course, there are also very good platforms abroad. You have to worry about the credits and the evaluation there more than at Auxmoney - and partly completely in English. This is what P2P Pope Claus Lehmann said in a very detailed interview with me.
If you feel like dealing with the topic even further, I recommend you to invest in P2P loans: What you should know, how to avoid mistakes and invest successfully
* by Lars Wrobbel and Kolja Barghoorn, which is now in the completely revised, second edition to buy. I also interviewed Lars Wrobbel about P2P, online business and much more.
* by Lars Wrobbel and Kolja Barghoorn, which is now in the completely revised, second edition to buy. I also interviewed Lars Wrobbel about P2P, online business and much more.
And I did a podcast interview with Oskar Streiter from the Lending School . He also published a guest post on social lending and provided answers to various questions about credit.
0 Comments