FellowFinance Review: let’s check out one of the largest peer to peer lending websites in Europe and analyze its functionalities in this post below
Are you looking for a reliable peer to peer website to invest? In our FellowFinance review we will understand why this peer to peer platform is one of the largest in the European P2P market.
FellowFinance Overview: What is FellowFinance?
FellowFinance is one of the largest peer-to-peer lending platforms in Northern Europe. Founded back in 2013, Fellow Finance now boasts of over 115,000 registered investors, over 700,000 borrowers, and over 406M EUR invested through the platform.
The company is based in Finland (offices in Helsinki and Turku), with operations in four other countries that include: Sweden, Germany, Poland, and Denmark.
Additionally, FellowFinance is listed on the Nasdaq First North Growth Market Finland marketplace. It’s also an Authorized Payment Institution under the supervision of the Finnish Financial Supervisory Authority of Finland.
According to the site, the company is on a mission to:
“transform traditional financing to direct lending between people and businesses.”
FellowFinance offers both business and consumer loans. Each loan gets a star rating ranging from 1 – 5. The rating is based on credit assessment, personal guarantee evaluation, and another 40 variables that factor into the scoring mechanism.
All different markets where FellowFinance operates offer different products. Finland is the only country with the entire investment offering. Here are the options in each country:
- Finland (business loans, invoices & consumer loans)
- Sweden (business loans & consumer loans)
- Germany (consumer loans)
- Poland (consumer loans)
- Denmark (consumer loans)
Key Stats at a Glance:
- Founded: 2013
- Country of Origin: Finland
- Countries of Operation: Finland, Sweden, Germany, Poland, and Denmark
- Registered investors: 11888 in March 2019
- Accepted currencies: Euro
- Accepts investors from: EU
- Borrowers: 728, 009
- Estimated annual returns: Upto 10%
- Minimum Investment: 25 EUR in personal loans, 100 EUR in business loans
- Loan duration: 1 – 120 months
How to Open an Account on FellowFinance
FellowFinance has made the registration process painless and straightforward.
To register, fill out your name, address, and a valid email address. You’ll also need to complete the KYC (Know-Your-Customer) procedure by supplying an identification document.
You can create an account without completing KYC, but you must complete it before investing and withdrawing funds from your account.
How to Invest in FellowFinance
Investing in FellowFinance is a simple process.
- Open and verify your account
- Deposit some money into your account. You can transfer money using a bank transfer, Transferwise, Revolut, CurrencyFair among other
- Funds are available for investment within a day of confirmed arrival (Usually 1 – 3 banking days)
- You’ll receive an email confirmation when your funds reflect in the account
- From there, choose to invest in either personal or business loans. You can invest manually or use the Auto-Invest feature, also known as Loan Allocator, on the platform.
Types of Investments Available at FellowFinance
Investors have access to a wide array of investment opportunities through the platform’s P2P lending marketplace.
FellowFinance has two major investment types. These are:
Consumer loans form the bulk of investment opportunities on FellowFinance. They are available as an investment option in all the 5 countries where FellowFinance operates.
There is no collateral on personal loans, only personal guarantees by the borrower.
On the platform, consumer loans come with detailed information to help investors in making decisions. The provided data includes borrower geography, loan amount, loan duration, maximum interest rate accepted by the borrower, etc.
Business loans have both collateral and personal guarantees from the business directors.
The loans go towards funding SMEs’ capital needs, working capital, among others. They include a component of invoice financing with receivables acting as collateral.
FellowFinance provides exhaustive data on Business Loans. The data falls into two categories:
Loan information – Company bio, project description summary of the loan, including an external credit rating by a 3rd party credit agency. The data also includes relevant company documents such as annual reports from preceding years
Financial Data – Graphs with company turnover, ad results from preceding financial years, total assets, etc. Below the graphs, FellowFinance provides actual company balance sheets and income statements elaborating on the company’s financial health.
FellowFinance Auto Invest Tool
The Auto-Invest tool on FellowFinance is cutting-edge. It’s not only innovative and intuitive but also far ahead of its peers in terms of functionality. Part of the reason is the platform’s auction-based loan system with a bidding component.
FellowFinance’s auto-invest feature is called The Loan Allocator. The system gives you the ability to set different parameters on your desired loans. For example, you can set minimum interest rates, or bid on specific credit ratings.
You can also set percentages of investments you want in loans with different credit ratings, a great way to diversify loan portfolios.
The Loan Allocator on Secondary Market
Furthermore, The Loan Allocator also gives you the ability to select loans based on maximum duration, maximum loan amount, and the cash balance you wish to keep in your account.
As an added benefit, the Loan Allocator also works in the Secondary market. Bid on loans from the secondary market, using three additional criteria. They include:
- Loans with some paid installments
- Overdue loans with a certain number of days remaining
- The discount rate you want before you buy a loan
Once you set the parameters, the Loan Allocator goes into work selecting loans and allocating capital based on your preferences.
How Much Can You Earn on FellowFinance?
Investors on FellowFinance enjoy industry-level returns, with an estimated annual return of up to 10%. The platform works on an Auction System. Borrowers set their desired interest rates, and lenders bid on those loans at the interest rates they are willing to lend.
Interest rates on loans range from 13% to a whopping 55%.
Who Can Invest In FellowFinance?
Fellow Finance has a diverse group of investors, both individual and institutional. Currently, the platform accepts investors from the European Union. The main currency of investment is the Euro. There is a 25 EUR minimum investment in personal loans, and 100 EUR minimum investment in business loans.
- High and attractive rates ranging from 13% – 55%
- Auto-Invest feature available
- Secondary market available
- Fast ID verification and money transfers
- Finnish FSA regulated platform
- An international business architecture
- Public company traded on the Nasdaq First North Finland stock market
- Full transparency and live statistics
- Direct investment structure
- 1% secondary market fee for sellers
- No buyback guarantee
- High risk
Fellow finance gives investors an opportunity to diversify their portfolios. They can spread risk in different asset classes, and among diverse geographies and currencies. Its secondary market offers unparalleled liquidity and a well-functioning market that brings investors together.
The company has a vibrant marketplace, solid financials, and is listed on the Nasdaq First North Finland stock market. Additionally, it’s under the supervision of the Financial Supervisory Authority of Finland. Given the facts above, it’s our considered opinion that FellowFinance is an excellent platform for investors looking to expand their portfolios.
Also, the platform has a robust Auto-Invest tool that reduces the grunt work in choosing investments. It puts your portfolio on auto-pilot.
Other Peer to Peer Lending Resources
Looking for more options? You might want to read some of our other crowd investing and peer to peer lending reviews. There are many peer to peer lending and investing platforms currently available, and you can diversify your interest income by using several of them simultaneously.
You can consider some other peer to peer companies by checking out our Estate Guru review or our Mintos review. Also check our posts on the best peer 2 peer lending platforms in Europe, and the best real estate crowdfunding platforms in Europe.
Are you already investing in FellowFinance or in any other peer to peer lending platform? Leave your thoughts and questions about this FellowFinance review below.