Iban Wallet Review

Iban Wallet review. Savings for everyone.

Today’s article is about the peer-to-peer lending company, Iban Wallet.

In the peer-to-peer lending industry, Iban Wallet is a relatively new player.  So, let’s learn a little more about them.

Please note that today’s article is sponsored on behalf of Iban Wallet.  All information presented is based on my research.  And, all opinions are my own. But please understand this is not a recommendation to invest. Do your own research. All investments have the risk of loss.

My experience lending money comes from bonds and bond funds. I have not personally loaned or borrowed money on a peer-to-peer basis in the past.  So as I began researching Iban Wallet and its service offerings, I had a lot of questions of my own to answer.

You may have the same questions that I did, so I set this article up in a question and answer format.  I hope you find it informative and useful.

What Is P2P Lending?

Peer to peer lending is known as P2P lending for short.

P2P lending enables individuals to obtain hard asset loans directly from other individuals.  The P2P lending process cuts out traditional financial institutions as the middleman.

Companies and their websites that facilitate P2P lending have greatly increased adoption.   As a result, P2P lending has become a viable method of financing for borrowers. And is no longer an unusual alternative investment opportunity for those looking to invest.

What Is Iban Wallet?

Iban Wallet is an online investment platform.  The platform offers investors several different types of asset-backed investment products with different terms and returns.

The company was founded in 2016.   Its original focus was collecting deposits in Europe.  And then, lending that money in Latin America.

Now, they have grown and are a global company.  Their deposits and loans originate from all over the world.

How Does Iban Wallet Work?

The company acts as an intermediary to the lending process.

Borrowers apply for a loan, supported by their credit information and collateral.  Loan originators that work with Iban will select only the best applicants and present these potential loans to Iban for approval

Investors can invest in different types of asset-backed investment products with different terms and interest rates. The investment provides a passive income stream.

Unlike other P2P marketplaces, Iban does not allow the investor to choose the specific loans or assets they would like to invest in.  Rather, Iban aggregates many loans together that form the basis for their account offerings.   

What Types Of Accounts Does Iban Wallet Offer An Investor?

They have 4 different accounts an investor can select from.  The account types offer different interest rates, terms, and minimum investments.

Iban Wallet 4 Account Types explained

Source:  Iban Wallet accounts

What Account Security Processes Has Iban Wallet Put In Place?

Investor funds are deposited in an Electronic Money Institution (EMI) regulated by the European Central Bank.  Also, they have implemented the following security measures:

  • Automated regulatory compliance to prevent money laundering and terrorism financing
  • Multi-step protection of investor identity
  • Real-time transaction notification to ensure investors are always informed

Source:  Iban Wallet account security

How Much Money Do I Need To Open An Iban Wallet Account?

You can get started with an Iban account with as little as $1.  Accounts that pay higher interest rates require larger initial deposits.

What Safeguards Are In Place To Reduce Risk Of Loss With An Iban Wallet Account?

Their accounts do not fall under government-backed depositor protection plans.  So, investor accounts are not guaranteed.  Therefore, there is a risk of loss.

This is in contrast to United States Banks that offer FDIC insurance.  Or, the FSCS depositor protection plan in the United Kingdom.

However, they have several different safeguards in place to limit your risk of loss as an investor.

Source:  Iban Wallet investor protection

Let’s cover those safeguards next…

Loan selection

On an individual loan level, the loan originator issues loans by following their established underwriting and credit evaluation policies.   This process is monitored by Iban Wallet.

Selection steps include industry-standard processes.   Also, advanced checks to verify identity, credit, affordability, and fraud.  These steps are taken to ensure borrowers are trustworthy and creditworthy.

Diversification

Their loans are aggregated.  So, when you invest in one of the Iban Wallet accounts you are lending your money to several different borrowers.  Not just one. Solid diversification is a fundamental investing principle.

Collateral

All loans are asset-backed investments.  This means if a borrower defaults on their loan payments, their assets are contractually available to seize and sell to pay off the loan.

Buy Back Guarantee From Loan Originators

All loan originators have a buyback guarantee on the loans they originate.

What is the buyback guarantee?   It means that if the loan payments are delayed by more than 90 days, the loan originator will repurchase the investment.  They will pay the value of the principal and any accrued interest until the date of the buyback.

Safeguard Trust

The safeguard trust is a provision capital account with reserves funded by Iban Wallet.  It provides investors with protection in case any loan originator fails to administer the investments.

To fund the safeguard trust, a proportional monthly balance is set aside.  The amounts collected are held in the trust for their investors.

The safeguard trust is designed to provide additional protection in case of failure of the loan originator’s buyback guarantee.

What Do I Give Up For This Level Of Safety With Iban Wallet Accounts?

All of the investment protections come at a cost.  That cost is lower interest rates for the investor.

It is just a risk and reward relationship.  Lower potential risk means lower potential rewards.

For example, you could source and loan money to a friend who lost their job.  Perhaps you could agree to a 9% interest rate on that loan for one year.  And that entire 9% would be yours to keep, assuming your friend pays you back in full.

But, look at what you give up:

  • Diversification
  • Collateral
  • Buyback guarantee
  • Safeguard trust

So in my example, the investor has more risk of loss.  But also, more reward in the form of a higher interest rate and return on investment.

How Quickly Can I Access Cash From My Iban Wallet Account If I Need It?

Interest income from an investment is projected to be credited to your account daily.  All or part of your original investment and interest can be redeemed at any time.  Thus, your investment account is very liquid.

But understand that 3 of the account types are subject to an early termination charge.  The base-level Iban Account is never affected by this charge.

The One, Market and Dynamic accounts do have a charge.  It is the lesser of 2.5% of the total amount in the account or the accrued interest at the time of cancellation.

Since the early termination charge never exceeds the accrued interest at the time of the cancellation, the investor will always get back at a minimum, their initial investment.

How Much Does It Cost To Invest With Iban Wallet?

Other than the charge for early termination that we just discussed, there are no fees associated with an investor’s account.

Iban Wallet fee structure

Source:  Iban Wallet – Fees

Then How Does Iban Wallet Make Money?

As I mentioned earlier, the borrower is paying a higher interest rate than you as the lender is getting paid.

That spread between the interest rates provides Iban Wallet with a profit margin for providing their services.

Does Iban Wallet Have An App?

Yes.  The Iban Wallet app provides easy access to your account.

Iban Wallet Has An App

How Do I Open an Iban Wallet Account?

To open an account, you must be at least 18 years old.   And reside in one of the countries in which they offer services.  Accounts are available in the majority of European countries and the United States.

The account opening process is simple and fast.  You can create an account online in a few minutes.  Plan to have the following information available:  email address, contact phone number, and identification.

To fund the account the investor can use a debit card, credit card, or bank transfer.  Accounts are currently offered in the following currencies:  Euro, US dollar and Mexican Peso.

Iban Wallet Review – Conclusion, Pros, And Cons

Is an Iban Wallet account right for you?

I can’t say for sure since I’m not familiar with your financial situation.  So, be sure to do your due diligence and make your own investment decisions.

That being said, here are some of my conclusions and things to think about if you are considering investing with Iban Wallet.

Iban Wallet may be right for you if you:

  • Prefer a simplified solution to participate in P2P lending
  • Do not desire to select individual P2P loans
  • Prefer stable investment values versus stocks and bond markets
  • Like the certainty of fixed rates of return
  • Like seeing interest earned and credited to your account each day
  • Desire liquidity – immediate access to your cash if necessary
  • Want higher interest rates (and risk of loss) than traditional government-backed banking products

On the other hand, if you desire to:

  • Be a more active versus passive investor in P2P lending & select the individual loans you wish to participate in
  • Have more direct ability to manage your risk and return profile
  • Desire a more established provider in the P2P space with a longer operating history

Then, you may want to consider other P2P lending options.

Disclosure & Disclaimer: I am not a licensed investment adviser, financial adviser, or tax professional. And I am not providing you with individual investment advice, financial guidance, or tax counsel. Furthermore, this website’s only purpose is information & entertainment. And we are not liable for any losses suffered by any party because of information published on this blog.

I am not a current Iban Wallet customer. Nor have I invested with Iban Wallet in the past.

8 thoughts on “Iban Wallet Review”

  1. Hi Tom,

    Nice review. I’ve always been interested in P2P lending but have not added it to my portfolio. This is an interesting option to consider.

    Cheers,
    Miguel

  2. Someone left a comment on my blog about P2P lending again and how it’s been great for them. I will have to look at this again and perhaps use some ‘fun money’ for it.

    I see this is not available in Canada. For those in the US, does Iban make money on currency conversion? I see it is in euros.

    • Hi GYM. They have US dollar-based accounts, so I think the direct answer is no they don’t. They make money on the spread between what the borrower pays and what the lender/saver earns. Tom

  3. Great review Tom. I came very close to signing up for a different P2P lending company. I actually created an account but had second thoughts about funding it. I noticed that it appeared that a lot of people were getting great returns in the beginning, which eventually averaged out towards the end.

    I’m not familiar with iban, beyond your review, but if I ever got back into the P2P lending industry, I would definitely consider them. I like the fact that I don’t have to pick individual P2P loans.

    • Hey DP. Nice to hear from you. I think there are some good opportunities in P2P lending. But as you say, each platform is a little different and it depends on what you are looking for. Tom

  4. Hey,

    not sure this is a platform you should recommend to others.

    Many red flags:
    1. Company changed owner, name, address in Feb/March 2020
    2. Company is now owned by a guy from Afghanistan
    3. Company had 0 EUR revenue, 0 employees in 2019
    4. You cannot find team, loan originators, financial reports on their website

    • Thank you for the update, Kristaps. The article about IBAN Wallet is not intended to be a recommendation. It was an article sponsored by the company and reflective of the platform at the time it was published. I do appreciate your feedback. Tom

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