We have been among the first to thoroughly test this platform and in this MEGAreview we tell you our impressions and all the information you are looking for … are you ready? 🙂
ATTENTION: join us and join the Fellow Finance investor community through our exclusive link and you will get as a bonus Premium Assistance from us for any questions you may have by investing in this platform and our PDF Guide with more than 60 Crowd platforms to invest (write us to request it!)
What is FellowFinance Statistics and Global Data
Although it is perhaps unknown to many investors – even veterans – in P2P lending, the truth is that Fellow Finance is an authentic institution within European platforms, leading the northern European market and bordering on the size of a giant like Twino, with almost 15,000 registered investors and more than 500 million euros financed , just behind the aforementioned Latvian marketplace and the unattainable Mintos in the ranking of platforms by volume of investment.
First Steps in Fellow Finance
Registration in Fellow Finance is a very simple process, absolutely similar to the standard of other crowdlending platforms in Europe, and consists of the following steps:
➊ Fill in the initial investor registration form.
➋ Provide proof of identity to carry out the verification (including ID or Passport, photograph, financial capacity and origin of the funds to be invested).
➌ Make the first contribution of funds by bank transfer.
Requirements to create an investor account in Felow Finance
+ Be of legal age.
+ Registration is open for European citizens.
Deposits How to add funds to our FellowFinance account
Contributions can be made by conventional bank transfer or through TRUSTLY . Specifically, Fellow Finance works with the Finnish bank Pohjola Bank and, once our identity has been verified, in our account they will provide us with the account number and identifier to make our contributions.
In addition, we can make quick and virtually instant transfers using the Trustly service for free at Fellow Finance.
Fellow Finance Bonus – New Users Bonus
Fellow Finance currently does NOT offer any cashback or promotion for new users who decide to join the platform and start investing . Even so, you already know that if you register with Fellow Finance with our link and you help us maintain this page, you will be entitled to a series of exclusive advantages such as Premium Assistance for any questions that may arise by investing in this platform on our part in the email.
How FellowFinance Commissions Works
Fellow Finance has absolutely NO commission for the investor. It is thus a platform “0.0” commissions as we like on this website 🙂
How to Invest in Fellow Finance Crowdlending in 2020
At Fellow Finance we have 3 investment modalities available today:
- MANUAL Investment from 25 euros per transaction in P2P loans (100 euros in P2B loans)
- AUTOMATIC Investment (called “LOAN ALLOCATOR” with multi-strategy possibility)
- Investment in the SECONDARY MARKET through the BUY AND SELL LOANS option
Next we will take a look at the parameters that define the operations published in your marketplace.
Investment Manual Analysis Fellow Finance P2P – Most Important Parameters
In the INVEST tab we will have access to the list of operations to invest in Fellow Finance, subdivided into two sections: SME Loans (P2B Loans) and Consumer Loans (P2P Loans) . In the example at the top we have selected the category of Consumer Loans.
At Fellow Finance we can invest in loans issued in a wide variety of countries that include Finland, Denmark, Sweden, Poland and Germany.
➋ Max Interest Rate
The annualized return we will receive on this loan. We will find at this point a very wide range of returns, from 10% for the safest loans, to returns of 50% or more. Interestingly, Fellow Finance gives us the option to voluntarily lower this interest rate (the purchase of loans is in auction format, although in most cases we can bid for the maximum interest rate with enough certainty of getting into the operation) .
➌ Loan Term
In Fellow Finance, loans are usually raised in the long term, from one year to 10, with averages in the environment of 4 or 5 years. We have to take into account that there is a secondary market available to make our investment liquid if necessary.
➍ Credit Rating
Credit rating is a measure of the risk of each loan or operation published in Fellow Finance and ranges from one star (the riskiest) to 5 stars (the safest). Normally, as expected, less risk is usually offered less profitability, although it should be noted that in this platform are not uncommon “inefficiencies” and exceptions that break the general rule both better and worse.
➎ Gross Income / Credit Limit
These two parameters are secondary variables that influence the risk score of the loan: high gross income will usually increase the borrower’s repayment capacity, but generally a low credit limit will point to the potential disability of the person taking the loan. loan to repay it comfortably.
When you click on the invest button, a new screen will open in which we will indicate the amount to invest in each operation from 25 euros for personal loans or 100 euros for business loans, as well as the interest rate we wish to obtain, being the maximum value we discussed in section 2 (Max Interest Rate)
FellowFinance How Autoinvest / Allocator Works (Automatic Investment) – Step by Step Tutorial and Configuration
In Fellow Finance, the lifelong Autoinvest is called “Allocator”, and although it is not too difficult to configure, there are some aspects that we must take into account and that we will mention throughout the tutorial that we show below.
➊ To start the AutoInvert configuration, we will go to the ALLOCATOR section of our Dashboard.
➋ At Fellow Finance we can / have to create an Autoinvest for each combination of type of loan + country in which we want to invest. The one with the biggest offer is the “CONSUMER LOANS FINLAND”, but we can create Autoinvest configurations for all the categories we want.
➌ For the Autoinvest of a particular category to work, we have previously had to transfer all or part of our available balance to it (imagine that our Fellow Finance account is actually 7 different independent accounts, and that if there is no balance in the account in which we have just configured Autoinvest, will not invest in it). Transfers from one account to another are made with the TRANSFER MONEY BETWEEN ACCOUNTS button.
Once you have selected the ALLOCATOR that we want to configure, press the OPEN button and the following screen will appear:
➍ In CHOOSE YOUR INVESTMENT RATE we have two options:
1- INVEST AT MARKET RATE (this will be the one that most investors will choose). It consists of investing at the average market interest rates for each type of loan – a variable interest that will change over time depending on supply and demand and whose guiding value can be read in the MARKET INTEREST RATE column-
2- INVEST AT REQUIRED INTEREST RATE: With this option we force the system to invest at the interest rate we set in step 6 for each loan category. The risk here is that either we review these percentages every little time or they will soon be obsolete or we will not invest anything (because the average rates have dropped) or we will invest everything at an unfavorable interest (because the average rates have risen).
➎ The SHARE OF INVESTMENTS parameter should be interpreted as the maximum percentage of our portfolio that we can have invested in each risk class. By default it is defined as 100/100/100/100/100, that is, the system will choose loans from any risk category without limitations.
We can define more balanced systems as 20/20/20/20/20, although the usual thing is to define distributions that leave some margin to the system (in the previous case we are forcing the self-investigation so that each risk class has exactly 20% However, if we define 30/30/30/30/30 we leave the Autoinvest some margin to distribute the loans in risk categories without any exceeding 30%).
We can also define for example conservative staggered systems: 5/15/25/35/45 or aggressive 45/35/25/15/5
➏ In the MINIMUM INTEREST RATE column, if we choose option 2) in step number 4, we will define the interest rate we want for each risk category. In case we choose option 1) in step number 4, here we will simply define the minimum interest we are willing to accept for each risk category (if the interest rate falls below the threshold we define, we will NOT invest in that loans specific).
➐ In MAXIMUM INVESTMENT PER LOAN, we will define the maximum amount of euros that we will invest in each loan (remember that in Fellow Finance, this amount is 25 euros for P2P loans and 100 euros for P2B loans).
➑ In MAXIMUM DURATION OF A LOAN we will indicate the maximum term of loans in which we are willing to invest.
➒ MINIMUM CASH BALANCE is the available money that we wish to leave free without investing within this Allocator. Usually at this point we will indicate “0”.
➓ MAXIMUM LOAN AMOUNT is the maximum total loan amount in which we are willing to invest. For example, if at this point we indicate 3,000 euros and a borrower requests a loan of 5,000 euros from Fellow Finance, this operation will be beyond the scope of this Allocator. Usually this is a relatively unimportant parameter. We leave a maximum high enough to cover all possible operations.
➊➊ Curiously, in the section RECEIVABLE OVER 90 DAYS… we can see the percentage of capital that is returned to us for loans in arrears (more than 90 days from default), the equivalent of Buyback on other platforms.
➊➋ The last step to confirm the configuration of our Allocator will be to click on the green SAVE button. Ready!
Fellow Finance Secondary Market and Liquidity
Although in principle we are not going to explain its operation in this review, we must bear in mind that Fellow Finance has a fully functional secondary market in which we can sell our loans in case of needing liquidity and buying the loans of other users.
Its operation is a little less intuitive than in the Baltic platforms, since it is based on a system of filters by which we limit the loans that adapt to our needs, but with a little sure practice that we do to it.
It should be noted on the other hand that it has NO commission for buying or selling, which is a positive point compared to other platforms in the sector.
Fellow Finance Buyback Guarantee
Fellow Finance has a variable PARTIAL Repurchase Guarantee for most of its operations, depending on the country in which we invest and the type of operation according to the following table:
Consumer Loans Finland – 53% of capital after 90 days of default
Invoice Funding Finland – NO Buyback Guarantee
Consumer Loans Denmark – 30% of capital after 90 days of default
Consumer Loans Germany – Case by case variable
Business Loans Finland – NO Buyback Guarantee
Consumer Loans Sweden – 53% of capital after 90 days of default
Consumer Loans Poland – 30% of capital after 90 days of default
Fellow Finance Originators
Fellow Finance does not have Originators or intermediaries in its credits: it puts the borrowers directly in contact with us, the investors.
Fellow Finance PLC Pay – Cash Withdrawals
Fellow Finance allows you to withdraw our available balance at any time and from 10 euros, without charging any type of commission to the investor . Usually withdrawals are processed quickly and in one or two business days we will have the money back in our bank account.
Is Fellow Finance safe? Risks and Regulation
Fellow Finance is an entity regulated by the Financial Supervisory Authority of Finland and listed in the Nasdaq First North Growth Market Finland , thus offering more packaging and guarantees than the vast majority of platforms in the crowdlending sector in Europe.
Like the rest of crowdlending platforms, investing in Fellow Finance operations can be a very profitable activity, but not without risks, some of which we indicate below:
+ Risk of lack of liquidity of our investments
+ Risk of non-payment of loans by borrowers
+ Currency risk, in case of investing in loans in countries such as Denmark or Sweden
+ Bankruptcy risk of the platform
Ergonomics Felow Finance Web and Reports
The Fellow Finance page, although in general it is functional and easy to navigate, can lead to a certain setback in some of its functions for investors accustomed to the simple and simplistic interfaces of the Baltic platforms. The page is fully translated into English.
If we carry out the study of distance in clicks for the most common operations that we usually carry out, we obtain the following results:
★★★ 3 clicks to invest in one of its operations.
★★ 2 clicks to see the status of one of the loans in which we have invested.
★★ 2 clicks to withdraw money.
Which is better than the average of the crowdlending platforms analyzed. Bravo!
Fellow Finance Oyj Expected Real Annual Yield
✰ Fellow Finance has an average gross return of approximately 14 % , depending on the type of loans selected and the risk rating.
✰ It does not present any type of commission for investing users, so no losses are expected in this regard.
✰ The average default rate is currently around 6%, again depending on the level of credit risk and the originating country – and with the Buyback function in the operations that have it.
✰ The estimated annual average net profitability, so it is a base 14% less (6)% of losses and commissions = 8% annual net for a well diversified long-term portfolio , which is slightly below the average platform Crowdlending evaluated on this website.
Fellow Finace Taxation – Tax Withholding
FellowFinance does NOT practice any withholding of interest earned on its platform. If in doubt, please consult with a tax advisor.
Fellow Finance P2P Lending – Contact Information and Customer Service
Fellow Finance is headquartered in Helsinki, Finland and makes available to the investors a specific contact telephone number, the +358 757568603 operating during office hours (Monday to Friday, 9 a.m. to 5 p.m.) and an exclusive email investor @ fellowfinance.com
In our experience, Customer Service is fast and efficient, professionally answering any questions or queries we may have.
The Team behind the Company
Fellow Finance has a large team of professionals among which its two co-founders stand out:
Jouni Hintikka CEO, Co-Founder
Jouni is an experienced leader in the field of banking services. He has held management positions in several European banks and financial institutions and has created new banking business models both in private banking and in the digital space. He is enthusiastic about online business, entrepreneurship, finance and investment.
Teemy Nyholm COO, Co-Founder
Teemu has worked as Director of Operations and Director of Information in several banks, investment companies and financial companies. He has participated in the creation of the most advanced digital financial services in Finland and in its expansion to several European countries.
Here you have a video that shows the operation of the platform (do not worry, the page is 100% in English :))
Is Fellow Finance Crowd Lending reliable? Opinion Forums, Networks, Aggregators …
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Fellow Finance generally has good reviews in the main opinion aggregators, with an average of 4.4 points on both Facebook and Google , which are the two most statistically relevant sources with more than 200 votes cast between them.
Our Personal Investment Strategy in Fellow Finance
✰ Geographical diversification: One of the main strengths of this platform is access to credits originating in Nordic countries, including loans to companies and Finnish crowdfactoring. Precisely we take advantage of this diversity to expose ourselves to loans of very different types in the platform.
Fellow Finance Opinion 2020 – Final Conclusion
“ Fellow Finance is a platform that, although it does not stand out in pure terms of performance and guarantees, has strong arguments so that we at least consider its incorporation into our portfolio, including its unusual origin -Finland-, its regulation, and the fact of being the third European platform by volume, only behind Mintos and Twino “
Advantages of Fellow Finance – Strengths
➊ Finnish platform, ideal to improve the geodiversification of our portfolio, both at the platform level and at the operational level.
➋ Leading company in the sector in the Nordic countries, regulated by the Finnish FSA and publicly traded.
➌ Variety of assets to choose from, including P2P, P2B and crowdfactoring loans.
➍ Powerful platform also at the level of size and volume of business, only being surpassed in Europe by Mintos and Twino.
Weaknesses and aspects to improve
➊ Net profitability after unpaid improvements, with averages of 8% at present.
➋ Relatively high unit minimums (25 euros P2P / 100 euros P2B).
➌ User interface and functionality (Autoinvest / Secondary Market).
Alternatives to Fellow Finance Review
There are more friendly marketplaces at first sight than Fellow Finance … and of course there are more profitable platforms than this one that we present today … however … on how many Finnish platforms we invest? … and that is, although from a performance point of view of course that the double FF has a rival, it is no less true that at the geodiversification level and size it does not present clear alternatives that surpass it as an ingredient of diversification in our portfolio.
Fellow Finance Forum
Do you want to have a space to comment and share your doubts and experiences about this Finnish crowdlending platform?… Look no further! Here below we enable the Fellow Finance Forum so you can express yourself and ask freely… Write us your comment! 🙂