Wisefund is a rather new P2P lending platform that lets investors lend money to businesses.
Most of the businesses are located within europe (in countries like Germany or Poland) and the loans are usually in the range of 4 to 12 months.
Interest rates for the projects are usually above 16%, mostly hovering around 20%, and are all covered by buyback guarantees from the platform.
Types of investments in Wisefund
Wisefund is very similar to Crowdestor or Envestio in that it offers P2P business loans exclusively. This means you will lend your money to businesses (mostly based in the EU) that pay you back in monthly instalments.
Who can invest on Wisefund?
The platform is mainly targeted at individual investors, who can only sign up if they meet the following criteria:
- be over 18
- have a valid passport or national ID
- have a European Union bank account
- be a resident of a country from the European Union (EU) and European Economic Area (EEA) and Switzerland
In addition to this, to register you will be required to fulfill the KYC rules.
This means you will have to take a picture of your face while holding your passport, as well as separate pictures of your document and face. This makes it almost mandatory to use a smartphone.
Interest rates on Wisefund
Interest rates for the projects are usually above 16%, mostly hovering around 20%, and are all covered by buyback guarantees from the borrower
Please note that all the loans in Wisefund pay monthly instalments, starting from the day you lend the funds.
There is an important difference from other sites like Crowdestor: Wisefund only pays interest from the day the loan gets funded (and not when you invested).
This means you will lose some days of accrued interest, especially if you tend to invest at the very beginning of the funding procedure of a project.
High fees for early exits
One peculiarity of Wisefund is the fairly high early exit fee, that tends to range between 10% and 15% for most projects.
Compared to the 5% fee in Envestio, this is much higher. However, bear in mind that most projects have a rather short duration of under 12 months, so this generally reduces the need to exit early.
Is Wisefund risky? How does its buyback guarantee work?
Wisefund offers three instruments to reduce your risk:
- early exit option (as we’ve seen, it’s quite expensive at 10-15%)
- the “Protection Fund”, where a percentage of every project flows to build up an “emergency fund” that is used to protect investors in case of a default
- the “Buyback Guarantee” where a third party insurance provider has agreed to pay back the capital invested (but not unpaid interest) in case a project defaults
I consider this trifecta a good protection, but you should be careful to read every single project’s description before investing in it: on the description page you can see which protections apply to that particular investment. In the following screenshot you can see an investment with a 20% exit fee, protected by both the protection fund and buyback guarantee.
Overall, a very good platform with higher than average interest rates
To conclude our review, Wisefund offers an overall well-managed platform that lets you invest at above-average returns in selected businesses, it reminds me a lot of Envestio in its early days. If you’re interested in joining it, click on the link below (you will will receive a 0.5% cashback on each investment made during your first 270 days)