Below you will find answers to frequently asked questions. If you do not find answer to your question, please contact our loan advisers at +372 588 55553 or send an e-mail to [email protected]
What is MoneyZen?
MoneyZen is a financial portal, where people can grant loans to each other. The portal provides services to lenders (investors) as well as borrowers. Compared to banks, who are also lending money deposited by the people, the interest revenue earned by investors in our financial portal is much higher than in case of bank deposit.
What is investing?
Investing is a purposeful increase of financial assets, but each investment is also related to a risk of losing capital. Therefore, the risks of every investment option should be considered carefully in order to make deliberate and well-considered decisions.
If you have no experience in investing, we recommend reading first the investment advice) provided by the Financial Supervision Authority and an overview of investment risks.
Who can invest in MoneyZen?
Any citizen or a permanent resident of the European Economic Area who is at least 18
years of age, or a legal entity established in the respective register in a Member State of
the European Economic Area can invest in MoneyZen.
If you are registering for the first time, you can submit a request to register a legal entity at the same time. If you are already registered as a natural person, you can submit a request to register a legal entity. To register a legal entity, you need to submit a document certifying the right to represent the company.
What should I know in order to start investing in MoneyZen?
Investing in the MoneyZen lending portal is simple and clear – besides experienced investors it is feasible also for active housewives or elderly people, for example.
If you are not experienced in investing please review Financial Supervision Authority guidance how to start investing and the overview of investment risks.
From what amount can I start investing?
As a natural person, you can start investing with 20 euros, but we recommend starting with larger amounts, such as 100 euros. For legal entities we also recommend starting with larger amounts. If you do not have previous investment experience, contact our advisors for advice and initially prefer investment strategies with lower risk.
In what situations the personal identification is required?
If total outgoing payments from virtual account exceed 15 000 euros per calendar month in case of private person and 25 000 euros in case on legal entity, verification of your identity (face-to-face or using infotechnological means) is required. The identity can be verified at MoneyZen's office. Please read more about identity verification here
How is the invested money protected in MoneyZen?
The money, which you have transferred to the MoneyZen portal, belongs to you.
You can transfer it back to your personal bank account whenever you wish.
General terms and conditions
regulate the use of money in the virtual account - MoneyZen uses your
money only within the agreed investment conditions.
Investment repayments belong to you. All repayments of investments belong to you according to general terms and conditions. In case of investments, you should take into account the fact that they will be collected as repayments from the borrowers during the loan period specified in the investment terms.
Debtors are handled until the debts are collected. MoneyZen manages your investments in the best way. MoneyZen actively deals with indebted borrowers until the debts are collected.
Compensation fund ZenFund may compensate for the loss of initial capital. If, as a result of legal proceedings, you do not recover your original investment amount, the ZenFund may compensate you for this loss.
How to invest in MoneyZen?
Investing in MoneyZen is simple and includes three steps
1. Register Register as a user on the portal. We will grant you access to the internal environment of MoneyZen.
2. Transfer money to MoneyZen portal Please use your personal reference number for the transfer on the payment order. Your reference number can be found in the Transactions menu of your personal account.
3. Set investment terms After receiving the money in the virtual account of the portal, you can set your investment terms in MoneyZen: loan type, credit score of a loan applicant, loan period,interest rate and the maximum investment amount per loan agreement. Under these conditions, MoneyZen will start making offers to loan applicants.
Which are the investment strategies of MoneyZen?
To invest, you can choose an investment strategy: core (low risk), plus (medium risk) or
ultimate (high risk). The difference is in which credit rating ranges the money is
In a low risk strategy, money is invested in higher credit score ranges (701-1000). In this case, the investment has a stable moderate return, the quality of the portfolio is very good.
In the case of a medium level of risk, in addition to high ranges, investments are also made in the riskier credit score ranges (601-1000). In this case, the loan portfolio is balanced with risk diversification.
In the case of a high level of risk, in addition to high and medium ranges, investments are also made in the most risky ranges of the credit rating (501-1000). In this case, the loan portfolio is the most diversified, offering higher returns, but it must be taken into account that the share of bad loans in the portfolio may be higher than the average.
You can adjust the investment strategy to your personal preferences at any time.
How are loan offers made in MoneyZen?
After confirmation of investment criteria and collection of money on investment account, the portal will start immediately making loan offers to loan applicants. Loan offers are made automatically. You do not need to waste your time in the computer – in case of a suitable loan application MoneyZen will make the offer based on your set investment criteria. Your money will grow, while you can deal with the activities you like.
What is a credit score of a borrower?
Credit score is a parameter characterising creditworthiness of a borrower, the
calculation of which is based on the payment behaviour and financial data of the
borrower. Credit score is used for assessing the ability of a natural person to fulfill his or
her payment obligations. Generally, a higher credit score shows ability of a person to
fulfil his/her obligations well. In case of persons with lower credit score, the fulfilment of
obligations may be difficult.
MoneyZen divides loan applications into five groups based on the credit score:
Low risk 901–1000
Low medium risk 801-900
Medium risk 701-800
High medium risk 601-700
High risk 501-600
Credit score 901–1000 shows that this is a loan applicant with the highest credit score (with low risk), in whose case the risk of delay and insolvency is the lowest, while credit scores 500–600 show higher risk.
The credit score is usually calculated on the basis of income, expenses, the volume of outstanding liabilities and the amount of monthly repayments of liabilities. Other factors and circumstances that may affect income and expenses are taken into account.
MoneyZen the co-financing portal follows the principle of responsible lending while processing the loan application
How does MoneyZen choose offers of investors for loan applications?
After submitting a loan application at MoneyZen, the credit score of the loan applicant will be calculated. If the credit score of the applicant is lower than 500, the loan application will not be submitted to investors for loan offers. If the credit score is higher, the portal will find all offers of investors matching the credit score of the applicant and the loan period of the application, and will rank them based on interest rate from lowest rates to the highest. A loan offer is composed at the most favourable conditions – offers with lower interest rates first.
For how long is the loan offer valid for the applicant to accept it and conclude a loan agreement?
A loan applicant is entitled to accept a loan offer in three days from the date of the offer. During this period the sum of your loan offer shall be reserved.
What is the reservation of a loan offer?
When MoneyZen makes a loan offer at the account of your investment portfolio, your money will be reserved to the extent of the offer until the applicant accepts the loan offer. You cannot use the reserved money. Money can be reserved for up to three days, after which the loan offer will be cancelled and you can use the money for investment again.
How much revenue can be expected from investing in MoneyZen?
Your revenue comes from interests on granted loans, for which you set the investment terms. The minimum interest rate you can set in the investment terms is 5%. Because MoneyZen is an unsecured loan , it is likely that some borrowers may not be able to fulfil their obligations resulting in a loss , in which case you can lose both interest revenue and the principal balance. By setting up your portfolio, you can see the market interest rates offered by MoneyZen according to credit score ranges.
What risks are related to investing in MoneyZen?
Like all other investment opportunities, there are some risks involved in investing in
MoneyZen. These could be, for example, inability of some borrowers to pay back the
loan (credit risk) or insolvency of Moneyzen OÜ administering the MoneyZen portal
Realisation of a credit risk of a borrower means complete or partial write-off of the loan (i.e. loss of money) for the lender. No peer-to-peer loan portal in the world has been able to eliminate this risk, nor have the credit institutions. The borrower's credit risk lies with the lender.
In case of realisation of the operational risk of the loan portal, the portal may be unable to continue operating. No portal can provide a definitive guarantee even in the case of a very large fixed capital and profitable operations, yet long-term operation of the company operating the portal, professional and experienced management, supervision, and other circumstances suggest that operational risk is lower if compared to competitors.
What is credit risk?
Credit risk is the possibility that an obligation will not be paid back. In case of the
realisation of credit risk, the lender receives a loss either in full or in part.
In order to assess the credit risk of a borrower, we use the method applied in the financial sector, but with several improvements. This does not mean that our approach is impeccable, but we are constantly striving to use the best possible methods in order to bring credit risk of borrowers to the minimum level.
In order to assess the credit risk, a credit score is assigned to each loan applicant, which is a parameter indicating the creditworthiness of the borrower. This is calculated based on the payment behaviour and financial data of the borrower. Credit score is used for assessing the ability of a individual's to meet payment obligations. Generally, a higher credit score shows ability of an individual to fulfil his/her obligations well. In case of persons with lower credit score, the fulfilment of obligations may be difficult.
How to minimise the risk level of my investment portfolio?
Diversify your money between many borrowers. By investing your money between
several borrowers with a suitable risk level in small amounts, you reduce the impact of
credit risk associated with one borrower on your investment portfolio.
To achieve this, invest in all credit scoring ranges with the maximum possible loan period, but set the amount to be invested in each loan smaller. In this way, each individual defaulted loan agreement would affect the performance of the entire investment portfolio as little as possible.
How does MoneyZen handle borrowers with debts?
MoneyZen aims to keep debt to a minimum, but we cannot completely rule it out. As a
result, from time to time, some borrowers may find themselves in a situation that
adversely affects their ability to pay and the loan repayments may be delayed.
The MoneyZen portal has developed a comprehensive debt proceeding scheme, which is applied in case of all late payments. Debt proceeding includes communication with the debtor – before the payment deadline we inform the borrower of the approaching payment deadline and send the reminder in case of payment delay. MoneyZen uses reminder messages, e-mails and letters; other obligatory proceedings include phone contact or meeting with the debtor, publication of the debtor's details in the payment default register and, as a last step, court proceedings. Similar debt management procedures are used in credit institutions and other financial companies.
Which service fees are applied in MoneyZen?
You can find service fees applied to investors in the MoneyZen price list.
What do loan statuses mean in MoneyZen?
In the list of credits, you can see a variety of statuses of credits. To better understand
them, MoneyZen offers explanations for them.
Zen - means that the borrower has fulfilled all obligations arising from the loan agreement on time.
Zen-1 - means that 1 installment has not been paid on time under the loan agreement (incl. Partially)
Zen-2 (... and so on) - means that there are 2 installments overdue under the loan agreement (incl. Partially)
Debt collection - covers loan agreements from 90 day overdue until the termination of the agreement by MoneyZen for non-payment.
Legal action - means that the debtor has been the subject of a recovery action, including transfer to court and / or the initiation of enforcement proceedings or the conclusion of a payment schedule with the debtor, either as a judicial compromise or on the basis of a court decision, in some cases out of court.
Repaid - the loan has been repaid according to the loan agreement.
Resolved early - the loan has been repaid before the due date according to the agreement.
Resolved Withdrawn - the borrower has withdrawn from the loan agreement and repaid the loan.
Resolved Legal action - the borrower has entered the status of legal action and as a result of this the loan has been repaid.