Bondora Moves to Fixed Price Bidding Only

P2P lending service Bondora informed investors today that it plans changes to the bidding system in May. So far Bondora allows borrower to selected between ‘timed funding’ which results in a reverse auction lowering interest rates if more lenders want to bid on a loan during the auction period than the loan amount needed and ‘quick funding’ where the bidding ends, once the loan is fully filled.

In future Bondora will uniformly use ‘quick funding’ loans with fixed interest rates.

Since there will be no advantage for investors to set interest rates low on their automated investment profiles any more after the change, I expect the short term effect will be that investors raise the interest rate on their profiles to the actual interest rate they want to invest at (Currently it is possible and custom to bid 6% in order to heighten chances that bids participate in quick funding loans, which then might actually close at 28%).

Related article: P2P Lending: How are interest rates set

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3 thoughts on “Bondora Moves to Fixed Price Bidding Only

  1. I am not sure how this will work. The other way sounded better where people just put the lowest rate that they were prepared to accept. There was nothing stopping other people from matching the bids of 6% if they wanted to compete. I used to like IsePankur/Bondora but they are starting to move the goal posts to often now for me.

  2. Hi Wiseclerk, thank you for your comment, but let me ask you a question: why do you write that investors will gain no advantage anymore by setting a low interest rate? In the newsletter Bandora writes that the first sort criterium for automatic investments will still be based on interest rate, so I take it that the lowest interest rate offered will be considered first, just like now.
    And while I am at it: how can some investors set an interest rate of 1%? I can’t go lower than 6%, the system won’t let me do it.

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