Quanloop borrows money from investors at the following rates:
- 6.5% to invest in “low risk” loans with a loan to value (LTV) of up to 55%
- 9.5% to invest in “medium risk” loans with an LTV of up to 85%
- 13.9% to invest in “high risk” loans with an LTV of higher than 85% or entirely unsecured
Quanloop is currently running Facebook ads claiming “Quanloop will pay you at a far better rate than any bank has to offer”.
Quanloop restricts the amounts that can be invested in the “high risk” plan to 33% and the “medium risk” to 50% of the remainder, meaning that the maximum “target interest” (for 33% in each) is 10%.
On its website Quanloop claims, at time of writing, that “Today our investors are earning 14.85% [annualised] average profit”. I was unable to get my head around how this squares with its current offer with a maximum target of 10% – bearing in mind that not all investors will opt for the maximum risk and maximum target return. On the same website it claims “to be able to add over 15% annual profit to your money”.
Who are Quanloop?
Quanloop is an Estonian company registered with the Estonian financial regulator as a “limited partnership fund”. It is headed by Valentin Ivanov.
How safe is the investment?
Quanloop claims to offer “low risk” investments and that “…your money is guaranteed by the total assets of the fund, first – by the loan you have financed and second – by the other investments and rights Quanloop has.”
In reality, as with any loan to an individual company, Quanloop is an inherently high risk investment. Regardless of what Quanloop says it is doing with the money, whether it is investing in loans with less than 55% LTV or investing in unsecured loans, a loan to an individual company is inherently high risk, especially an obscure unlisted company in Estonia.
Secured lending is not risk-free as there is a risk that if the underlying borrower defaults, the security cannot be sold for enough to cover the loan.
Investors in asset-backed loans have been known to lose 100% of their money when it turned out that there were not enough assets left to pay investors after paying the insolvency administrator (who always stands first in the queue).
We are not in any sense implying that the same will happen to investors in Quanloop, only illustrating the risk that is inherent in any loan note even when it is a secured loan.
If investors plan to rely on this security, it is essential that they hire professional due diligence specialists (working for themselves, not Quanloop) to confirm that in the event of a default, the assets of Quanloop would be valuable and liquid enough to compensate all investors. Investors should not simply rely on what Quanloop tells them about their assets.
Quanloop claims to be better than a no-risk deposit account, describes its investments as “low risk”, and over-eggs the fact that its loans are secured, even though this does not change the fact that loaning your money to an individual company has an inherent possibility of up to 100% loss.
All of this is misleading, as confirmed by the Financial Conduct Authority. (UK regulation is what matters here, given that Quanloop is sourcing investment from the UK public via Facebook ads.)
Should I invest in Quanloop?
This blog does not give financial advice. The following are statements of publicly available facts or widely accepted investment principles, not a personalised recommendation. Investors should consult a regulated independent financial adviser if they are in any doubt.
As with any individual loan note to an unlisted startup company, this investment is only suitable for sophisticated and/or high net worth investors who have a substantial existing portfolio and are prepared to risk 100% loss of their money.
Any investment claiming to be able “to add over 15% annual profit to your money” is inherently very high risk. As an individual, illiquid security with a risk of total and permanent loss, lending money to Quanloop is much higher risk than a mainstream diversified stockmarket fund.
Before investing investors should ask themselves:
- How would I feel if the investment defaulted and I lost 100% of my money?
- Do I have a sufficiently large portfolio that the loss of 100% of my investment would not damage me financially?
- Have I conducted due diligence to ensure the asset-backed security can be relied on?
If you are looking for a “guaranteed” investment, you should not invest in loans to Estonian companies with a risk of 100% loss.
Curious to know if your views on this company have changed. I have been investing a small amount of money to try them out and so far all is going well. I also tried to request withdrawals and the money was transferred within 1 working day.
Quanloop remains an inherently high risk investment as with any loan to a small Estonian company. What would have changed?
The fact that you gave them a small amount of money and they transferred some of it back doesn’t change anything.
I’m longer at quanloop, once I invested 2,30 euro until now I got my rent of 0,02 p/m every month on my bankaccount.
This was advertised in our website and we thought it was a bit scam-ish, and so we decided to Google it, which brought us here. What you said makes absolute sense, and we really believe that people shouldn’t invest in this kind of thing…
It seems that your main argument is that it is an Estonian company! Why is it such an important fact/point in your review? I would say that Estonian government does pretty good job in regulating stratups.
I’ve invested €50 into it, it’s earning me roughly 2c per day. I wouldn’t put more into it as I know how risky it is. I have it on savings mode and the compounding interest is nice. Its not amazing but still better than a bank for what it is.
Hi, some changes about quanloop risks?
Thx
@other commenters: Why would there be any changes? I’ve invested 1k with them and I’m prepared to lose it. While I’ve been earning quite high interest, this does not mean anything.
Everything always goes perfectly fine until it doesn’t.
Some people take risky investments all their lives, with money and health going into smoking and or drinking. Nothing to worry about… Your body can take it! Until you start having a weird cough and go to the doctor.
Other people go to the casino and invest 1k in a thrill which, after one spin of the wheel they can do it twice more, or need to get another 1k from their savings account.
I think Quanloop is risky (hence the profit margin) and probably the longer you stay the more chance that eventually something goes wrong.
On the other hand, it seems to be a legit company and not trying to scam on purpose. Which is saying something as well these days I guess.
With the previous financial crisis a couple years ago even some banks defaulted. They were supposed to be safe…
Also as I understand it all the loans are distributed evenly among all lenders. Meaning if one loan defaults, it should just be a small percentage that falls to an individual lender. So if all loans default at the same time (meaning every Estonian company stops paying back their loan) that would be the moment you’d start really feeling it.
Now, with the Ukrainian war going on and all this seems a much more real risk suddenly. But we’ll see I guess.
What would be safe/safer Quanloop alternative with same/similar rates?
To be fair anything invested in there is 100% chance you lose money, whether this, stocks or Crypto (mine down almost 80% this year), I have had small amounts of money in and out of this and it has consistently paid me daily, would I put big money, no, I have €250 which is going to sit in the savings mode and if I lose, fair enough, if not I continue to build some decent Interest, I have spoken to them and got very quick reply when they changed banks, I see no real reason at this time that this is a scam.
[Bondreview Comment: The claims made in this post have not been verified. They could be genuine or could be an attempt to persuade people to invest some money into the company].
I have 8000 euros invested and I’m getting back around 100 euros a month. At first I was a bit worried so I started with 20 euros, then I put in 100, 500. Took all money out put in 5000 took 3000 out. Put in another 5000. Took out 7000 to pay my car. I then took out a personal loan for 7000 which I’m paying 6% interested on. I put all the money into Quanloop and I’m getting back the money for the loan plus some extra cash. It’s been 6 months now. I’m adding 100 euro every month to my Quanloop account. I’ve made money with Quanloop where I have lost on Cryptocurrency.
[Bondreview Comment: The claims made in this comment have not been verified. They could be genuine or could be an attempt to persuade people to invest some money into the company. We are surprised that someone would give such a comprehensive explanation even going so far as to say they took out a bank loan to invest. That should NEVER be done. It is important that investors always adopt a sceptical attitude towards blog comments and are never persuaded to invest based on a recommendation from someone they do not know and who may not be genuine].
Is the company a member of any “Investor Compensation Fund”?
Regulated investment firms, via the ICf, protect/guarantee investors’ funds (for up to a maximum of EUR20K) in the event that the company defaults, or mishandles clients’ funds.
Is our money protected here under such a fund?
I have €50 invested. I would have 2-3k to invest but certainly wouldn’t put it into this. As said above, I definitely feel the website is legit and isn’t a scam. But you can still lose ALL of your money. It’s great while things are good but when things go wrong they can go wildly wrong. Even with the best of intentions.
Low Interest = Low Risk
High Interest = High Risk.
This is the real world.
I have the max €15k invested. Invested gradually, withdrew cash to test. I have my funds split equally over the risk sections. My interest income is earning compound interest, as I re-invest. So far, my monthly income gets dropped into my account on time. Added to this I regularly receive an inflation adjustment. I’m aware of the risks: I invest in circa 25 different P2P platforms as well as in a large stock + ETF portfolio. Financial Management was my profession for 37 years: I’m now retired & manage my investments daily. At some point every investor will make some losses, but hopefully, my gains are currently out-weighing any possible losses. My goal is always to keep my profits ahead of losses, so I’m still in profit. Quanloop diversifies every € of my investments, so I’m hoping that offsets any future losses. I realise Quanloop is not as secure a platform as some others, but you take a risk, every time you invest. I’m OK with the risk levels with Quanloop.
[Moderator Comment: We have not verified the authenticity of this post. It may be genuine or it may not].