FAQ | Bondster

How can I start investing?

After registering, agreeing to the business terms, and signing the investor contract, send funds to your Bondster account. Once the Bondster payment has been accepted and verified, you can start investing immediately. It usually takes one day, depending on the speed of bank transfer.

How much time does investing take?

It depends on how much time you spend on investing. If your time is limited, you can use the autoinvest service, which regularly invests according to your preset criteria. Setting it up only takes a few minutes. You are informed about the development of your investments with regular emails including an overview of your assets. For more about autoinvest options, see autoinvest.

What is the minimum and maximum amount of the investment?

You can start investing from 5 EUR (or an approximate equivalent in other currencies). The maximum limit of the total investment is not limited.

How long do I have to hold the investment?

The length of your investment depends on you and on the Bondster loan offer. This means that we offer loans due in several months, but also ones due in several years. In the case of annuity repayments, the loan is repaid on a continuous basis, so your funds are not tied to the investment for the entire maturity date. This way, you can use them for other investments or transfer them to your account.

How often will I receive payouts?

You earn according to the investment conditions. It is most common to receive them monthly, but depends on how regular payments are paid and on the type of loan you have invested in. Repayments may also be made on a short-term or long-term basis, and they could also include a gradual repayment of principal. But you can also invest in a one-time repayment loan where the principal is repaid only at the maturity date of the loan and the interest payments are usually paid on a regular basis over the life of the loan.

How can I invest in published loans?

After signing in to your profile, click INVESTMENT OFFER. By clicking on a particular loan, you will see its details. With the INVEST button, you will be able to choose the amount you want to invest into the loan on the right side of the screen. The system itself monitors the minimum and maximum investment that you can also apply with respect to the current balance on your Bondster investor account. You confirm the contract documentation and after entering your password your investment is completed.

What contractual documents can I expect after an investment?

For each investment made, you will receive a Contract for the Assignment of a Claim, which includes an overview of receivables with the parameters of the investment.

How can I track the return on investment?

You can find all the details of the transaction in the Transactions Overview section. You can also use the filter to get the specific details you are looking for.

What happens when the debtor is in default?

In the My Investments section of your profile, you can see a detailed repayment schedule, detailing the payment history of the loan, and when further repayments are due. The provider, as the loan administrator, is in contact with the original debtor and takes all steps to make sure the installment is paid. If this does not happen, either a buyback or redemption of the loan and subsequent recovery will occur, and we will inform investors in detail.

Am I entitled to default interest?

If the payment is overdue, you are entitled, as an investor, to interest earnings for the period of delay if the loan has a buyback guarantee. If there is no guarantee, you are entitled to penalty charges. The amount is determined within the parameters of the loan.

What are the ways to repay loans?

 - Annuity repayments have a fixed monthly installment. During the repayment, the absolute amount of the principal repayment is gradually increased, and the absolute amount of the interest paid is reduced.

 - Linear repayment occurs by repayment of a fixed principal amount (i.e. the same proportion) throughout the investment. The value of the absolute amount of interest paid decreases continuously.

 - One-off repayment. Only interest is repaid over the maturity of the loan, and the principal is repaid with a single payment at the end of the maturity of the loan. The value of the absolute amount of interest paid is the same for the entire duration of the loan.

Will my identity or the amount of my investment be published in any way?

As an investor, your username or nickname is never shown, so other investors cannot see who has invested in the loan. You can only view how many investors put their money into the loan and how much their total stake in the loan is.

Can I cancel my investment?

If a Guarantee of Liquidity is offered, you can withdraw from the investment at any time during the course of the investment for a predefined fee. If the loan offers periodic exit points from the investment, it can be withdrawn from the investment after this predetermined period of time (weekly, monthly, quarterly, half-yearly, yearly). In justified cases, an investor can ask the loan provider to process the redemption with the conditions under which the loan will be redeemed.

In what currencies does Bondster invest?

You can invest in Czech crowns or Euros.

What exchange rate is used for transfers if I send money in EUR but want to invest in CZK loans?

This is always the bank's current rate on the day the transaction takes place. If you convert the currency to our CZK account, conversion is made to Czech crowns in the receiving bank, i.e. in Komerční Banka. If you make a payment in crowns from a EUR account, the conversion is made at your bank. As such, Bondster does not carry out such a transfer, nor does it charge any fees. For transfers where conversion occurs, we recommend using payment service providers services where the cost of conversion is significantly lower than at a standard bank. The first payment after creating a new Bondster user account must always be, for regulatory reasons, from an account that is listed on your behalf.

What does LTV mean?

Simply it means “Loan-to-value” ratio. It is the ratio of the value of the loan to the value of the collateral. The lower the LTV figure, the more secure the loan is.

What is a buyback?

A buyback ensures that the investor is returned the outstanding principal and unpaid interest payments in the event of a default. Loans that include a buyback can be identified by the “buyback” icon in the Investment Offer list.

How exactly does the buyback take place?

A buyback occurs when a debtor fails to honor his obligations. The buyback is automatically activated after the period specified in the loan parameters (usually 30 or 60 days) and the protection period of 7 days, which is applied due to payments handover process. The Provider then repurchases the outstanding loan and pays the unpaid interest repayments to the investor.

What is a secured loan?

The Bondster portal is unique in offering secured loans guaranteed by the debtor through immovable and movable property. The investor has the assurance that if the debtor is not able to pay, there is real collateral with an established value.

What is a guarantee of exit from the investment?

This feature allows the investor to recover the outstanding principal for a certain period of time after the investment has been executed, for a pre-arranged fee.

What does Guarantee of Liquidity (GL) mean?

This feature offers investors the opportunity to withdraw the invested amount immediately, at any time during the investment for a predefined fee. The remaining principal is refunded immediately upon confirmation. You can identify these loans with the related icon under the Investment Offer section or under the details of the loan where the line entitled “Exit” will show the letters “GL”.

How does a regular exit from the investment take place?

The investor may withdraw from the investment after a certain, predetermined time. Withdrawal can be made if it is offered on the selected loan. Information on the possibility of using the regular exit can be found in the section My investments / investment details. In the case of using this service, the investor is refunded the amount of unpaid principal reduced by the fee for the implementation of withdrawal from the investment. After confirmation of the exit, the amount is immediately credited to the investor's account.

Can the debtor repay the loan prematurely? What impact will it have on my investment?

Yes they can. Your investment will be repaid in full, and you will receive the outstanding principal and interest payments you have on your early repayment date.

Can the provider buy a loan back?

Yes. The provider can buy the loan back at any time, even without investor consent. The investor receives the value of the principal and the interest that he is entitled to on the date the loan is repaid.

What happens if a loan is repaid?

It is essential for the provider that the debtor repays regularly. If this is not the case, they are doing everything in their power to recover the amount owed. In the event that the borrower is late in repaying, there will be either a repurchase or repayment of the loan and subsequent recovery.

How is the recovery of a loan performed?

Recovery is performed by the provider according to its internal processes. Providers, such as loan administrators, make every effort to get the money back. However, in the case of repayment of the loan, it is necessary to incur additional costs which are provided to the providers in the form of a 15% fee on the amount due.

Can I find out who is the original debtor?

With regard to the protection of the debtor, this information is not passed on. The loan is managed by the provider and he takes all necessary steps to get money back. An investor can find all important information in the detail of each loan.

Why do the loans offered on Bondster have returns around 15%? Why do the debtors have such high interest rates compared to commonly offered interest, for example on a mortgage?

By comparison the standard interest rate is around 20% for credit cards of most domestic banks. When investing in loans, there is a risk like any other investment. This is reflected by the interest rate in the investment environment. The rates for which providers offer loans correspond to the debtor's risk profile. Thanks to new regulatory measures, the whole process is more transparent for consumers and guarantees a fair approach by providers to borrowers. Loans cannot be provided by law to heavily indebted borrowers. Providers are required to be able to verify borrowers and, if there is a risk of future default, they must not provide the loan.

Higher returns for an investor are also often provided when financing entrepreneurs who have, for example, appropriate collateral, but are unable to provide their bank with sufficient history and creditworthiness. The interest rate then reflects their risk profile. Thanks to their business, they are also able to pay more interest.

What happens if the provider goes into bankruptcy?

We carefully choose our partners, and we are convinced that this situation will not happen. If the situation does arise, Bondster will fully take on all the loans that are invested in the Bondster market. It will also provides income from debtors and distribution of investors' share of their Bondster accounts.