NEO Finance review 2022
Read our NEO Finance review, and learn if the platform fits you.
Overview of NEO Finance
We find the return compared to the safety favorable.
The NEO Finance platform is very beginner friendly.
NEO Finance has made a lot of safety measures.
Investors get an average return of around 12.00%.
We Don’t Like
Summary: NEO Finance is a P2P platform with a lot of pros and very little cons. We were especially pleased with the high transparency and openness about the platform. Overall, we were extremely pleasantly surprised by NEO Finance, and it is our opinion that the platform is very underrated among European P2P investors.
Get a €25 signup bonus when registering on the platform
Last updated: April 10, 2022
Introduction to our NEO Finance review
NEO Finance has been one of the least-mentioned P2P platforms in Europe. And with just a few NEO Finance Limited reviews, we decided to take a closer look at the platform.
In this NEO Finance review, you can learn more about what the platform is, how it differs from other platforms and whether NEO Finance is at all safe to use.
Before you embark on reading about our experiences, we will draw your attention to the fact that this NEO Finance review only expresses our opinion and experience. Therefore, nothing you read on this page should be interpreted as financial advice.
Learn about the following in our NEO Finance review:
What is NEO Finance?
NEO Finance, also known as Paskolų klubas, is the largest P2P lending platform in Lithuania. Through the platform, you can invest in consumer loans for Lithuanian consumers with as little as €10.
The average loan amount for borrowers on NEO Finance is €3,150, and the average loan term is 57 months.
The platform has been around since 2015, and since then there has been a constant increase in granted loans:
At present, NEO Finance has over 13,900 active investors on its platform. And every day new investors are joining. NEO Finance is thus a platform in rapid development.
NEO Finance held a successful IPO from May 15 to June 4, 2019. It sold 192,907 shares, raising a total of €605,728. Today the stock is traded on Nasdaq Vilnius. You can see the current share price here.
The fact that the crowdlending company is now publicly traded gives it a lot of credibility.
NEO Finance statistics:
|Interest rate:||5 – 27 %|
|Loan period:||1 – 120 months|
|Loans funded:||€ 98,000,000 +|
|Min. investment:||€ 10|
A loan originator itself
NEO Finance differs from platforms such as Mintos, Fast Invest, and PeerBerry by not being a marketplace, but actually being a loan originator itself. This means that there are fewer intermediaries, which theoretically should give you a higher return.
At the same time, you will also find that you get much more control on the platform. Among other things, there is more insight into who the borrowers are than what you get at P2P marketplaces. Thus, you can also be incredibly specific with whom you would want to lend.
NEO Finance FAQ:
No investment is 100% safe. So even though NEO Finance protects your money with buyback guarantees, etc., you still risk losing your invested capital.
NEO Finance Trustpilot reviews:
A decent chunk of investors has shared their experience about NEO Finance on Trustpilot. The company has ended up with an average rating:
In the following part of this NEO Finance review, you can learn more about the different features of the platform.
1. NEO Finance buyback guarantee
If a loan is not repaid in time by the borrower, around 50-80% of the face value of the loan will be covered by NEO Finance. This requires that the loan is covered by the NEO Finance buyback guarantee. How each loan is covered depends on the credit rating.
If you want your loans fully covered in the event of a loan default, you must use the provision fund offered by NEO Finance.
2. NEO Finance provision fund
The NEO Finance provision fund is more similar to the buyback guarantee you can find on other P2P platforms.
However, the fund is voluntary and you will be charged an upfront fee every time you use it. It works much like insurance where NEO Finance is the insurer.
The provision fund is funded by NEO Finance, with its own assets as collateral. This means that as long as NEO Finance exists, they will have to pay for the loans covered by the provision fund.
3. NEO Finance auto-invest
On NEO Finance you can invest automatically with the auto-invest feature. The platform has one of the most extensive auto-invest builders in the market. NEO Finance makes it possible to choose from more than just the most standard things, such as the return you want and the creditworthiness of the borrower.
In fact, you can choose to go so specifically that you only invest in loans offered to married women with a masters degree wishing to take out a loan for real estate purchase.
Setting up an auto-invest strategy:
The setup of an auto-invest strategy takes place in three steps:
Step 1: Entry of the proposal
First of all, you need to set up your auto-invest strategy. As a starting point you can make use of the following criteria:
If you want to make a more specific automatic investment strategy, then you can tap on “additional criteria” to become very specific with who you want to borrow money for.
Click “continue” when you are satisfied with your automatic investment strategy.
Step 2: Sign the agreement
Then you must sign the agreement. There is quite a lot of legal text to read here. If you are one of those people who want to be absolutely sure of what you sign, then set aside 15-30 minutes to review the agreement.
The content of the agreement basically means that NEO Finance disclaims the responsibility in case your investments do not go as planned.
You sign the agreement using a code that you receive as a text message.
Step 3: Confirmed proposal
Once the agreement is signed you will be met by this screen:
Your auto-invest strategy now ready and confirmed.
4. NEO Finance secondary market
If you wish to withdraw your funds from NEO Finance, you must first sell the loans on the secondary market.
The NEO Finance secondary market is a place where you can trade your investments with other investments.
This allows you to make an early exit and withdraw your funds from the platform before your loans mature.
What rate of return can you expect?
At NEO Finance, it is possible to invest in loans with a total interest rate of 5-27%.
With that said, investors on the platform achieve an average return of around 12%. As this is only the average, it is, of course, possible to achieve both a much lower or higher return on the platform.
If you choose to invest exclusively in loans with A rating, your return will naturally be lower. However, if you only choose loans with C rating, then your return will be higher.
So, what return you end up getting depends on your risk appetite.
In recent years, the trend in the average interest rate on the individual credit ratings has been as follows:
Who can invest via NEO Finance?
To be able to invest with NEO Finance, it is a requirement that you are a citizen of the European Union, or any countries in the European Economic Area, with a valid passport, ID card or mobile signature.
In order to invest at NEO Finance you also have to be at least 18 years old, or have the investments made on your behalf by a parent.
If you meet the requirements, then it should be very straightforward to sign up as an investor. Simply follow this process:
- Create an account
- Perform an identity verification
- Open an e-money account
- Deposit funds
- Start investing
As you can see, there are very few barriers to starting investing with NEO Finance.
Would you like to become a NEO Finance investor and do you live in one of the many countries in the entire European Union? Then press the button below and sign up. It’s probably the fastest way to go from reading this NEO Finance P2P review to investing yourself:
Is NEO Finance safe to use?
A very important thing for any Peer-to-Peer lending platform is safety. In this NEO Finance review, we have, therefore, taken a look at what the company has done in that regard.
NEO Finance buyback guarantee
NEO Finance offers a buyback guarantee on their loans. However, it is slightly different from what you will find on other platforms. Depending on the credit rating of the NEO Finance loan, the buyback guarantee covers 50-80% of the face value in case of loan default.
If you want to be fully covered in case of a loan going into default, you should check out the NEO Finance Provision Fund.
One of the areas where the platform differs a great deal from others is with the NEO Finance Provision Fund.
The Provision Fund is very much like buyback guarantees offered by many other P2P lending sites. However, there are some significant differences.
The use of the Provision Fund is not mandatory. Instead, you can choose it when you invest in a loan. Here you will be able to see calculations for what this extra safety costs.
The Provision Fund thus acts as a kind of insurance, in which NEO Finance repurchases loans that possibly go into default. NEO Finance then puts their own assets as collateral for the repurchases.
In other words, the NEO Finance Provision Fund depends on the company’s solvency in case of many loans suddenly defaults.
NEO Finance financials
Since the buyback guarantee and the Provision Fund depends a lot on the company’s solvency, we have taken a look at the company’s annual report for 2018. We have done this to find out if NEO Finance is actually profitable and whether they actually have the cash to repay the Provisions on the loans if the number of defaults suddenly skyrockets.
Yet to be profitable
In their annual report for 2018, it is stated that NEO Finance ended with a negative result in 2018. However, the result was significantly improved compared to 2017.
We do not see the size of the negative annual result as a danger signal. This is due to the fact that reputable many platforms have seen negative results in the first years of their lifetime. For example, a very popular platform like Mintos was also first profitable in its third year on the market.
As NEO Finance has seen great progress in their financials, it should not be long before NEO Finance is profitable.
Provisions are not that significant
When you look at the NEO Finance balance sheet, it is also quite clear that the Provisions do not really take up much of the total balance.
The Provisions is only at €159,115. And since NEO Finance in 2018 has cash and equivalents for €2,642,060, the Provisions should not be a problem for the company.
Downturn resistant platform
Although the platform is not yet profitable, NEO Finance’s annual voluntary “stress-test” shows that the platform will be able to get through an economic downturn with positive cash flow.
You can see more about which assumptions were made for the stress-test here (Q1 2019).
NEO Finance regulation and licenses
In addition to the financial progress of NEO Finance, the platform is also at the forefront of the field when it comes to living up to regulation. As part of this NEO Finance review, we have taken a look at what licenses the company has and what regulations it meets – and it’s not a few. Among other things, NEO Finance has:
- The Electronic Money Institution (EMI) license granted by the Bank of Lithuania.
Furthermore, the company is:
- Included in the public list of consumer credit providers.
- The first to be included in the public list of P2P lending platform operators.
- Supervised by the Bank of Lithuania
Can I get a NEO Finance promo code?
Of course! We have made an arrangement with NEO Finance, which means that you can get a €25 bonus if you sign up for NEO Finance via any link from our site to theirs. This is a bit of a better deal than the standard NEO Finance referral code which gives €20.
Simply press the button to claim the €25 bonus:
How we decided to invest
We are still in the testing phase of NEO Finance. Therefore, we do not yet have any investment results to show.
We will keep you posted about our own investments.
Conclusion of our NEO Finance review
We have been very impressed with the NEO Finance P2P lending platform. Everything on the platform works extremely well with high transparency for investors.
After a look at NEO Finance’s annual reports, we also feel confident about having money on the platform. The company has significantly more cash and equivalents than what is needed for Provisions. However, the company is yet to be profitable. But with great growth and positive progress, it does not worry us at this time.
So if you are looking for a serious and trustworthy platform with a high return for investors, we believe that NEO Finance is one of the very best platforms in Europe at the moment.
Would you like to invest on the platform after reading this NEO Finance review? Then just click on the button below. This will take you directly to NEO Finance’s site where you can sign up as an investor. Remember that you get €25 in the signup bonus if you use the button below: