The Bondora Go and Grow Guide – Quality, Risk, Taxes & More

In our Bondora Go and Grow Guide you will find out everything you need to know about the popular P2P platform, the risk involved with these loans and how you have to pay as little tax as possible.

We also explain how Bondora is structured and what makes the Go and Grow program so special.

Finally, if you have any further questions or are looking for further investment tips, it is worth taking a look at our Personal Loans Forum. There you can exchange ideas with other investors and certainly learn one trick or two

Was ist Bondora Go and Grow

Bondora is a well-known P2P (“Peer to Peer”) lending platform from Estonia. Among the company’s various investment products, Go and Grow is currently the best-known, as word of the high return of 6.75% quickly got around.

The promise of high liquidity, ie the possibility of withdrawing daily, are also attractive to many investors.

A high degree of diversification tries to make the product very safe. Whether Bondora Go and Grow has a high or low risk is still controversial.

It is clear, however, that with P2P loans – and in general with all investments with high interest rates – there is always at least a small risk of default.

The nations in which Bondora operates mainly include Estonia and Finland. With a small share of 15%, loans are also granted in Spain.

The company decides which applicant will be accepted and what amount he will receive. This amount comes directly from the investors, who receive a corresponding return of currently 6.75% in return for the loan

All other aspects, such as administration or the recovery of defaulted loans, are also taken over by the platform. The latter is also the weak point of the P2P business:

The riskier a loan is, the higher its interest rate and thus the higher the rate of return. However, this naturally goes hand in hand with a higher probability that due to bankruptcy and the like, repayments may no longer be made at all.

Bondora and the crisis

The portfolio currently consists of more than 100,000 loans with an interest rate of 6.75%. The exact numbers are naturally subject to constant fluctuations.

In September 2019, for example, 16 million euros in loans were granted in the three available countries Estonia, Finland and Spain.

However, the Covid crisis also struck here, and for reasons of caution, both the amount of lending and the available countries were temporarily reduced:

In September 2020, exactly one year later, only 2.7 million euros, which were awarded exclusively in Estonia, will be achieved.

On the other hand, nothing has changed in the scope of the respective loans: they were then as now at around € 2,200 and, according to P2P standards, are already among the medium amounts.

The term of around four years also remained largely the same – so this is still a long-term payment model. This continuity should be noted positively.

One of the specific measures to counter the crisis is the introduction of a partial repayment rule.

If an investor decides to withdraw all or part of his capital from Bondora Go & Grow, he will not get it back directly, but has to wait a few days, during which he will be paid out in parts.

In almost all cases, this worked in less than a month – not bad for a crisis situation.

The recovery rate – also a very important figure – has improved steadily over the past two years. With the beginning of the pandemic, it experienced a slump that did not come as a surprise and in this form also set other providers back.

In the case of Bondora Go and Grow, however, this decline was not too dramatic, so that one can confidently say that the crisis has so far been overcome well.

Is Bondora Go & Grow Risky?

As with all high-yield investments, there is some risk with P2P lending. Bondora has, however, set up many protective measures at Go & Grow and is therefore clearly one of the more secure providers.

The individual steps include, for example, an “interest buffer” that would be sufficient for a full 12 months. In the event of a total failure of all repayments, the promised return could be paid out to the investors for at least one year.

However, a look at the distribution of the loan categories quickly shows that there are some dangers hidden here: More than half of the loans fall into categories E and F.

These are fraught with a high risk – to be precise, they are only exceeded by the HR (“High Risk”) group. Here, however, naturally, the interest is highest – if it is paid.

A mitigating factor, however, is the origin of the loans: 40% of them come from Finland, a new market for Bondora.

At the start there, loans began to be assessed rather conservatively, which contributed to these negative numbers. So here, as so often, the truth lies in the middle.

Further analysis also tells us that most customers take out the loans for long-term debt restructuring. Together with the amount of income, which is only slightly above the loan amount of the recipient, a good picture is also drawn here.

Because the borrowers do not receive astronomical sums here, but only the approximate equivalent of a monthly salary.

Ultimately, however, only looking at the bare numbers helps when assessing the risk. And here we see very clearly that Bondora has even earned significantly more interest with Go & Grow in the last 2 years than was originally planned.

About 7% more on the Spanish and Estonian markets! Only Finland performed about 1 percent worse than had been targeted.

With this, the platform shows that loans tend to be rated a bit riskier and thus in the end very good results, namely even better than their own expectations, are achieved.

If you would like to know more about the current status of the company, it is worth taking a look at our article “How well is Bondora financially”. There, based on the last annual report, we took a much closer look at what the numbers say.

Do interest have to be taxed?

In general, interest income in Germany has to be taxed regularly, i.e. at 26.375%. Bondora Go & Grow can, however, be exempted from this if the income remains below the deposit amount – says the company itself.

However, you will have to find out what this might look like in your case by talking to your tax advisor, as we are not allowed to provide advice on this for legal reasons.

What is certain, however, is that the income from your Bondora investment is not automatically taxed, as is the case with stock dividends, for example. You are therefore required to enter this yourself in the tax return, in Appendix KAP, line 14.

Our opinion on Bondora Go and Grow

Bondora Go & Grow is not without risk, but with its different measures it is a more secure provider compared to the competition. In the past, the promised interest was always paid on time and in full, which can be seen as a clear indication of quality.

Only the partial payment at the beginning of the Covid crisis represented a small cut for investors, which has since been discontinued. However, such precautionary measures ultimately speak in favor of Bondora and his management.

With its attractive interest rates and the so far flawless track record, the platform therefore shows an excellent picture among the P2P providers. The theoretical tax exemption with which the company advertises should also make Bondora and its Go & Grow program a favorite among investors.

Due to the residual risk that remains, P2P loans can never fill the position of a call money account, for example. Today, however, they are already an integral part of almost all well-diversified portfolios.

Ultimately, the decision for this type of investment is of course left to the investor. However, if these personal loans are interesting for you, Bondora and Go & Grow is definitely one of the best providers.

Other Recommendations

The financial market is full of P2P providers, each with different characteristics, and the ongoing Covid pandemic is doing the rest to make the market seem chaotic.

So that you don’t lose track, we regularly compare the most important platforms for their crisis resistance in our “We’re over the mountain” report.

Which provider is ultimately the right one, of course, also depends on your own strategy and gut feeling.

If you have already made the decision in favor of Bondora, this link will help you to receive a starting bonus of € 5.

If you are looking for good interest rates and a buyback guarantee, you will come directly to Mintos here

To join Estateguru, you can simply follow this link. You even get a bonus of 0.5% extra interest!

We can also support you at ViaInvest with a € 5 bonus. Just follow this link

If, however, PeerBerry has done it to you, you can get a 0.5% bonus after 30 days.

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