From time to time, some loan originators on Mintos offer cashback campaigns which are also advertised in the Mintos newsletter. For the loan originators this is a way to attract more investors, often particularly for their long term loans which might otherwise not be the top choice for investors due to the long payback period. Namely Lendo and Mogo had a few cashback campaigns back in 2017 and 2018 and offered up to 5% cashback for their longest running loans.
While this “normal” cashback is already a nice way to increase your return on investment there is a simple way to take this one step further:
The trick is to buy lots of loans with Buyback Guarantee that qualify for the cashback and which are already late, ideally 31-60 days late (yes, on the Mintos first market you can also find late loans). There is a good chance that these loans will hit the 60 days late status and the Buyback Guarantee kicks in. Let’s say you bought a loan share for 100 Euros and a 5% cashback offer. The loan is 31 days late. Within a few days you’ll get 5 Euros cashback and if you’re lucky the loan will be bought back by the loan originator after 29 days. Then, you’ll have the 5 Euros cashback and about a month’s worth of normal interest that the loan paid, let’s say 1 Euro. This gives you a return of 6 Euros on your 100 Euros within a month or 72% interest annually. Not so bad, right?
With this trick I quickly made a few hundred Euros extra within about a month during the last Mogo cashback campaign. Of course you’ll need enough liquidity to buy lots of loans in a short time but it’s definitely worth it to keep this trick in mind when the next cashback campaigns come around.