New APR feature will give you even more ways to measure risk on Mintos



We are committed to being the leader for transparency for loan marketplaces. That’s why you can now see the annual percent rate (APR) for each loan, allowing you to gauge risk better and make even more informed investment decisions.

What is an APR? An APR is the annualised effective cost charged to borrowers when they take out a loan. This rate represents the yearly cost of funds over the term of the loan and is expressed as a percentage. The APR does not take compounding into account, but it does include any fees or additional costs that may be charged to the borrower. In general, the lower the APR the lower the risk of the loan defaulting.

The APR is an easy way for investors to compare rates charged by lenders, as loans or credit agreements often have many variables. However, APR is not always the most representative measure of the cost of borrowing, therefore, on Mintos, we show the effective APR. This is a unified measure among all loan originators on the platform.

To calculate the effective APR, the methodology called XIRR (extended internal rate of return) is used, which is further adjusted to exclude compounding effects. Effective APR is calculated based on the cash flows charged to the borrower which includes principal, interest and any fees charged on a single loan basis.

It should be noted, if the maturity of a loan is only 30 days, the APR will assume the loan is rolled over for the whole year at the same effective cost. This is why short-term loans will on average, have much higher APR’s than longer-term loans.

This new feature gives you more transparency when investing on Mintos and will allow you to create a more streamlined investment strategy that more accurately reflects your risk/return preferences and will also help you to earn better risk-adjusted returns.

You can see the APR for each loan under “Loan Details”.

Alternatively, you can see the APR for each loan on the Primary and Secondary market here.

You will also be able to filter loans by the APR and set the minimum and maximum values.

This feature will also be added to Auto Invest in the near future.

Streamline your investment strategy with this new feature and use it to make the best possible decision for your investment goals now!