oktober 16, 2014,

Hidden opportunity in longer-term loans

Bondora Go & Grow

Editorial team

In general, longer maturity of a loan is usually associated with higher risk; thus, some investors avoid investing into loans that have a duration of over 36 months. However, over 50% of the loans that came to Bondora marketplace this year had duration of over 36 months, so we decided to analyze if investors are not overlooking an attractive opportunity that is hidden in longer duration loans.

Loan duration	Loan amount approved for the Market, €	Loan amount approved for the Market, %	Funded amount, €	Funded amount, %
12 months	1,300,140 €	4.3%	1,147,883 €	7.0%
24 months	4,225,880 €	13.8%	3,084,597 €	18.9%
36 months	5,721,963 €	18.8%	3,027,738 €	18.6%
48 months	4,967,983 €	16.3%	2,560,050 €	15.7%
60 months	14,300,592 €	46.9%	6,501,420 €	39.8%

Timeframe: January 1, 2014 to October 14, 2014

As one can see from the table above, given the nature of loan demand there are plenty of opportunities for investors to invest into the loans with duration of over 36 months. Therefore, if longer duration loans provide sufficient returns, this might be one of the largest current opportunities overlooked by some of the investors. Let’s take a look at how longer duration loans performed so far:

	Weighted interest rate	Default rateof seasoned loans	Recoveryrate *	Estimatednet return
12 months	28.2%	4.0%	27.0%	24.1%
24 months	27.1%	6.6%	27.0%	20.5%
36 months	27.4%	8.6%	27.0%	18.8%
48 months	26.8%	8.4%	27.0%	18.4%
60 months	27.2%	8.1%	27.0%	19.0%

Timeframe: January 1, 2009 to October 14, 2014

*The recovery rate is calculated based on the loans, which defaulted in 2013 and have had on average 12 months to recover.

As can be seen from the summary table above, the loans with the duration of over 36 months provided the return in excess of 18% despite a slightly higher default rates! Therefore, we suggest to take a closer look at the longer duration loans that come to the marketplace and set up Portfolio Managers to exploit this opportunity.

Bondora Go & Grow

Editorial team

At Go & Grow, our Editorial Team combines years of fintech experience with a passion for financial education. We’re here to share trustworthy insights, platform updates, and easy-to-understand investment tips for everyone.

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Frequently Asked Questions

How is Bondora regulated?
Bondora Capital’s business model is unique, with no direct precedents in the market. As such, there is currently no specific regulatory license that directly applies to our Go & Grow product. However, we work proactively with regulators across the EU to ensure full compliance with all applicable local laws and regulatory frameworks.

To support this, we regularly publish financial updates, audited annual reports, and disclosures, reinforcing our commitment to transparency and investor trust.

At the same time, Bondora Capital is subject to all relevant general regulations, including (but not limited to) the Estonian Consumer Protection Act, the Law of Obligations Act, the Commercial Code, the Accounting Act, the Competition Act, and the General Data Protection Regulation (GDPR).

Additionally, Bondora AS, a member of the Bondora Group, operates as a Licensed Credit Provider under the supervision of the Estonian Financial Supervision and Resolution Authority. In Finland, we operate through a licensed branch regulated by the Finnish Financial Supervisory Authority. We also hold an operating license in Latvia, supervised by Latvijas Banka, and have recently received regulatory approvals to operate in both Denmark and Lithuania.
Are Bondora AS's loans secured?
Bondora issues unsecured loans, meaning credit customers are not required to provide collateral. This approach allows us to offer a faster, simpler, and more accessible lending experience.

Risk is mitigated through multiple layers of protection. Our underwriting process is powered by predictive, data-driven models, trained on deep datasets collected over 17 years. Each borrower is carefully evaluated using a wide range of creditworthiness indicators before any loan is issued.

With Go & Grow, your investment is automatically diversified across hundreds of thousands of loans in multiple countries. This significantly reduces individual borrower risk and adds a layer of protection against regional or geopolitical events.

In the rare event of non-payment, we follow a structured recovery process, working with professional debt collection agencies and, when needed, escalating cases through local legal channels to pursue repayment.
What happens when a borrower doesn't repay?
At Bondora, we do a lot to prevent repayment issues before they happen. Our advanced data models carefully assess each borrower’s creditworthiness, using historical data and predictive analytics to minimize the likelihood of default from the start.

If a payment is delayed, we act quickly but thoughtfully. From the first day of the delay, we reach out to the customer via email, SMS, and automated calls to remind them of their delayed payment and offer flexible options to get back on track. The aim is to find a solution together, whether that means a new payment date or a short-term adjustment.

If the situation doesn’t resolve, we may involve our internal teams or trusted partners to continue the dialogue and explore further options. In some cases, if communication is unsuccessful, the matter may be escalated to the local legal system in line with standard procedures. Legal steps are always a last resort, and the goal is to find the best possible outcome for everyone involved.

Throughout this process, our focus remains on recovering outstanding amounts responsibly and respectfully while protecting investors’ interests.

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What are temporary partial payouts?
Under normal conditions, your Go & Grow withdrawal is paid in full with a single transaction near-instantly. However, in rare and extraordinary circumstances, partial payouts may be activated temporarily. This means your withdrawal will be split into smaller, daily payments until the full amount has been delivered. Only one €1 withdrawal fee applies once you’ve received the full amount.

This protective feature was built into Go & Grow from the start to help maintain stability and safeguard investor returns, so you can stay on track and stay earning, even when the world feels uncertain.

In Bondora’s 17-year history, partial payouts have only been activated once.

While we aim to keep Go & Grow fully liquid, this feature ensures that when conditions require it, your investments remain protected and continue to work for you.
What happens to my investments if Bondora goes bankrupt?
Your money is protected. Even in the highly unlikely event that Bondora Capital becomes insolvent, your investments remain yours. Investors legally own the loan claims, not Bondora Capital.

This means Bondora’s financial situation does not affect the legal ownership of those claims—they continue to belong to the investors. The claims are not part of Bondora’s bankruptcy estate.

Risks related to Bondora as a company are separate from the risks associated with your investment portfolio. Simply put, if Bondora disappears, your investment doesn’t.