Frequently asked questions
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Investing Show everything
Who can invest on Žltý melón?
Citizens of any country covered by SEPA (Single Euro Payments Area) may invest on Žltý melón; provided they are over 18 years old, have full legal capacity, and have a bank account in one of the SEPA countries.
The countries covered by SEPA included all EU countries (Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, the Netherlands, Croatia, Ireland, Latvia, Lithuania, Luxembourg, Hungary, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, United Kingdom of Great Britain and Northern Ireland, Spain, Sweden, and Italy), as well as other EEA countries (Iceland, Liechtenstein, Norway, Switzerland and Monaco).
How can I invest?
You invest your money by offering to fund part of a borrower’s loan through the specific auctions that you choose on Žltý melón platform. When doing so, you must always indicate the amount you want to invest and the interest rate at which you are willing to offer funds to the borrower. After the borrower accepts your offer, which is then combined with funds from other investors, the money for the loan is transferred to the borrower’s account.
Every time you lend money and a borrower accepts your offer you will receive a confirmation with the amount you invested and the interest rate for your investment that you indicated in your offer.
Before you are able to make your first investment, you need to register on the Žltý melón website and fund your Žltý melón investment account (the minimum amount you must fund your account with is the amount you have offered to invest and fund the borrower’s loan with).
The entire registration and investment process is quick and easy, meaning you can start investing and earning money on the site the same day you register. You can find more information about registration and making your first investment in the ‘How the investment process works’ section.
How much can I invest?
The minimum amount you must deposit on Žltý melón to begin investing is 25 EUR / 500 CZK and there is no maximum limit for your total investment portfolio (the combined amount of all of your investments in individual loans). However, to help secure your investment and provide you with some protection against potential risks, you can only invest a maximum of 250 EUR / 6 500 CZK in any one individual loan.
We strongly advise you to sufficiently diversify your investments across as many loans as possible that meet the criteria you have decided on for your investment strategy, as doing so will help ensure more stable returns on your investment and limit your exposure to risk.
How much can I expect to earn from my investment?
Žltý melón provides investors with a recommended interest rate for every loan that is both fair for borrowers and also reflects the level of risk for investors as determined during our assessment process and indicated by the credit scoring category assigned to the borrower.
The recommended interest rate is calculated based on a number of factors, including our detailed knowledge of the current standard conditions in the lending market, so that it is fair to both borrowers and investors, while also including a risk premium set by our comprehensive evaluation of the original loan application. The risk premium is determined during our assessment process and reflects the risk to investors that a borrower will default on a loan, meaning that with sufficient diversification of an investor’s portfolio the income from loans that are repaid should cover any potential losses resulting from investment in any loans that are not repaid and eventually default.
The recommended interest rates provided by our system are not binding and it is ultimately up to each individual investor to determine the exact interest rate for their offer to fund any individual loan, which is based primarily on their expected return on investment and the level of risk they are willing to accept as part of their investment strategy.
The average overall return on investment for the entire portfolio of loans provided on Žltý melón since we started operating in 2005 is more than 8% p.a.
You can find more detail information about the current performance of investments and loans on Žltý melón in the 'Statistics' section of our website).
How do I know what interest rate I should set for a loan?
Although we provide investors with a recommended interest rate, it is ultimately up to each individual investor during the loan auction to set the interest rate at which they are willing to offer to fund part of a borrower’s loan. In standard loan auctions – where the interest rates are determined by investors rather than borrowers - setting your own loan interest rate helps you control how quickly your offer is accepted by potential borrowers, as well as how much you will earn on your individual investments.
When setting the interest rate for your offer to fund a borrowers loan you should keep in mind that when a loan auction has been fully funded by investors, the offers with the lower interest rates are the ones that are selected to be combined into the eventual loan taken out by the borrower. If during the loan auction your offer to fund a loan is discarded from the auction and replaced by an offer, or offers, from other investors that are willing to fund the loan at a lower interest rate, you may still choose to re-enter the auction, but you will need to offer the borrower a lower interest rate in order to displace these new investment offers.
Ultimately, the interest rate you choose to offer a borrower all depends on your requirements regarding your expected returns on your investment and also how an individual investment offer fits within your broader investment portfolio and investment strategy. To calculate an appropriate interest rate correctly for any given loan auction interest rate you can use our recommended interest rate as the starting point for your decision, but in order to ensure your offers are not displaced, it is also important that you look at the offers currently being made by other investors who want to fund that particular loan.
The process for setting interest rates works slightly differently in loan auctions for Preferred Interest Loans, where borrowers determine their preferred interest rate themselves (at a level not lower than 2% below our recommended interet rate), which is done when they set up the loan auction. This interest rate and the type of loan auction is clearly marked so that investor can quickly and easily decide if they are interested in making an offer to fund the loan at the interest rate set by the borrower.
While this type of loan auction provides less control and flexibility for investors, it also provides greater security in terms of earning more stable returns and finding enough loans to invest in, as once an investor chooses to invest at the interest rate set by the borrower they are guaranteed that if the loan auction is fully funded their offer will not be displaced by other investors since the loan auction will immediately terminate and making offers at a lower interest rate is not possible.
How do I evaluate the credit risk of a borrower?
During loan auctions we provide investors with all of the important information about loan applicants that is necessary to help you decide if you want to make an offer to fund their loan including information about their income and expenses, and the risk class. If you need further information before making your final decision you also can ask borrowers additional questions to make sure you are making the correct investment decision based on your chosen investment strategy.
Every applicant for a loan on Žltý melón must first pass our comprehensive evaluation process, which verifies their personal credibility, current financial situation and ability to meet their repayment obligations. Only individuals with a clear background and who we have identified as being highly likely to repay their loans consistently and on time can borrow through Žltý melón.
Applicants who fail to pass our credit scoring assessment, who have negative credit history, or who do not meet all of the required eligibility criteria borrowers cannot access loan auctions and attempt to get their loan funded by investors.
We assign a credit rating category – AA, A, B, C, D, D- and HR – to all loan applicants that manage to pass our rigorous assessment and screening process.
AA represents the lowest risk category of borrowers, as they are people with a good credit history as well as a clearly established financial situation that will allow them to easily make their scheduled loan repayments. At the other end of the spectrum, borrowers within the D- category, referred to as ‘Sufficient’, represent the highest risk class of borrowers. However, our stringent evaluation process ensures that even these applicants have had their financial circumstances and credit history fully verified, meaning they are able to consistently repay their credit commitments and other financial obligations.
Our credit scoring system also places some loan applicants within the special HR or High-Risk’, category, outside of the normal credit scoring scale. HR-rated applicants are those that did not meet all of the necessary criteria during our assessment process to be eligible for a standard loan on Žltý melón. Nevertheless, in order to be approved as for an HR loan applicants must still meet most of our evaluation criteria and information about them must demonstrate there is a realistic prospect that they will be make their schedule loan repayments.
We recommend that only experienced investors consider investing in HR loans, which offer the potential for higher returns on investment but also carry a greater risk of late repayments or default, and that this should only be done after a careful evaluation of the higher risks associated with these investments.
Assigning a credit rating category to each approved loan applicant is a significant element that can help investors in deciding which loan auctions fit best within their investment strategy and the desired level of risk for their investment. The credit rating category is also a key determining factor used by our system to determine the recommended and maximum interest rate that investors can offer to borrowers during their loan auction. However, within these set parameters it is ultimately up to you as an individual investor to determine the interest rate you are willing to offer borrowers during a loan auction.
How do I decide which loan auctions I should invest in?
When investing on Žltý melón, you should look through all of the loan auctions currently in progress and assess the details provided for each of their loan applications. It is important to choose auctions that best match your investment profile and desired investment strategy.
For borrowers in the credit rating category AA or A, there is a lower risk of repayment failure than if you were to invest in loan auctions with borrowers that were assigned a credit rating category of C, D and D-. However, the higher level of risk associated with these borrowers also means that the potential returns on your investment are also higher, as the interest rates paid by borrowers in the lower risk categories are much lower.
The most important rule that you should follow on Žltý melón, regardless of your investment profile and strategy, is to ensure you have sufficient diversification within your investment portfolio, as this will provide you with more stable returns on your investment and lower your exposure to the risks associated with any one individual borrower defaulting on their loan.
You can find more information about how to build a sufficiently diversified investment portfolio in the ‘Diversifying your investments’ section of our website.
How can Žltý melón ensure that the money I have invested will be repaid?
While we are fully confident in the sophisticated nature of our assessment processes and the benefits of investing on our platform rather than with a traditional bank, Žltý melón cannot guarantee the security of your investment.
We are a loan management company, rather than an investment advisory, meaning we provide you with all of the necessary information on borrowers and their loan application so that you can make the key decisions about your investments by yourself.
The most important to realise is that if you sufficiently diversifying the investments in your portfolio on Žltý melón you will dramatically reduce your exposure to risk and protect yourself from failures that can result in you losing your investment.
One of the most important factors for all of the people who invest or borrow money on Žltý melón is that the whole system is safe, secure and provides them with the best possible terms for their loan or investment.
This is also our number one priority. Our efforts to create, grow and operate Žltý melón would be entirely meaningless without this commitment to provide a safe, fair, and transparent platform for our users.
You can learn more about the risks of investing on Žltý melón and how to limit your exposure to risk in the ‘Risk management’ section of our website.
Can borrowers and other users see my personal data?
All loan auctions on Žltý melón and other activities on our system are anonymous; you are only identified by your chosen user name (nickname) that you create when you first register and can be anything you want.
Your personal information and data are also kept private and secure. The system does not disclose any personal information about investors to borrowers or other users on Žltý melón. We will also never sell or disclose your personal information, unless required to by law, and we ensure that all of the data our users provide is encrypted and stored securely using the highest level industry standards.
You can read more about our commitment to security and your privacy in the Safety and Privacy section of our website.
Do I know who I'm lending money to?
For security reasons, we do not provide the name or the exact contact details for borrowers during loan auctions. However, all relevant information about borrowers, their income, expenses, and their risk category is available so that you can fully evaluate the loan auction and make your investment decisions.
You can also ask borrowers additional questions to find out any further information that you need to make an accurate and informed decision about whether to make an investment offer to fund their loan.
In the event that a borrower fails to make their scheduled repayments or defaults on their loan we will provide all of the necessary and relevant data to investors when appropriate as part of our collections process.
How is my investment protected?
Borrowers can apply for a standard non-purpose loan through Žltý melón of up to 15 000 EUR / 250 000 CZK. Standard non-purpose loans are normally provided by banks or non-banking institutions without requiring borrowers to provide security in the form of a legal charge against their property, as is the case with mortgages taken out to purchase a house or flat.
On Žltý melón both sides benefit from the way our loans are arranged, as no security is required from borrowers, yet investors can still feel secure knowing that we have carried out extensive and rigorous checks to screen loan applicants and ensure they are able and likely to repay their loan.
Loans are granted and agreed on the basis of legal documentation prepared by a law firm with extensive experience in this field and that is similar to the loan contracts used by banks and other financial institutions. Every borrower that is employed must sign The Agreement on Wage Deductions in order to obtain their loan after it has been funded by investors, which helps ensure we can easily collect their agreed repayments directly in the event they fail to make them on time.
In the event that the borrower defaults on their loan, we act on behalf of investors to collect the debt and cover all of the upfront costs associated with pursuing the debt via a legal petition to the Arbitration Court, where we increase the amount owed by the debtor to reflect the costs of collection. After the court awards a decision against the borrower for the debt we work with professional executors to collect the debt through legal claims against the property of the borrower.
Our comprehensive debt collection services, provided free of charge to investors is highly effective and ensures that investors have a high chance of recovering their money promptly.
What contracts do I sign as an investor?
Besides accepting the General Terms and Conditions of Žltý melón, investors also sign the Framework Agreement on Cooperation, which allows them to access and participate in loan auctions. If they decide to invest their in loans arranged through Žltý melón on more than one occasion, there is no need to sign any additional contracts with Žltý melón or the individual borrowers whose loans they fund.
All investors, whether they make one or multiple investments, receives the same complete level of service in relation to their investment. This includes, but is not limited to, providing an investor’s funds to the borrowers whose loans they have funded as well as calculating and crediting their virtual account on Žltý melón with the money paid to them by borrowers through their loan instalment repayments.
In the event that one of the loans an investor has funded is not repaid promptly or the borrower defaults, we provide a full collections services that includes communicating with borrowers as well as managing and covering the costs of any legal action that is required to recover the full debt owed to investors.
Do I lend money to just one person?
No. Žltý melón strongly recommends that you diversify your investment into as many borrowers as possible to decrease your exposure to risks arising from non-repayment and also to help you earn stable returns on your investment
Our system limits how much you can invest in funding any one individual borrower’s loan and we recommend that you spread your investment across at least 40 different loans to ensure your portfolio is sufficiently diversified. You can achieve this by investing small sums with many different borrowers, while also paying attention to their age, sex, region, income group and credit rating category, as these factors will help further diversify your investments.
You can learn more about diversifying your investment in the “How to create your investment portfolio” section of our website.
What if a borrower is late in making their repayments?
Žltý melón actively monitors each borrower and identifies even the first signs of potential payment failure and potential problem loans. Our sophisticated debt collection system consists of two parts - soft and hard collection. This system of debt recovery is highly effective and is based on procedures and policies that correspond to the standards developed by banks and other financial institutions in the market.
Compared to these institutions, however, Žltý melón has a significant advantage as our portfolio is not nearly as large or complex, which makes managing it expensive and inefficient. Our smaller size, streamlined business model that is not bogged down by legacy systems and expertise in this area of consumer lending means we can approach each non-performing loan individually, developing a tailored approach that is more efficient and maximises the amount we are able to recover for investors.
You can learn more out debt collection process in the “Recovery of non-performing loans” section of our website.
Can I recover the debt owed to me by a borrower myself?
Yes. However, Žltý melón has developed a highly effective and full service debt recovery system, including established partnerships with a leading law firm and enforcement agencies that specialise in this area, which it offers to all investors free of charge.
If you nevertheless prefer to deal with the problem of non-repayment independently, we will provide you with all of the necessary legal documents and information to do so, including the identity of the borrower.
How can I see the level of loan defauls and late repayments?
Žltý melón tracks the performance of every loan arranged on our platform, paying specific attention to the individual clients, groups of clients and specific loans that are determined to have a higher than average risk. We monitor the repayments and performance of loans within these high risk classes, as well as amongst other identified types of borrowers and risk classes, in order to track the development of delays in repayment and loan defaults.
Based on the data and analysis resulting from the active monitoring of loan on our platform, we continually review and update our prediction algorithms for the default rates of loans within individual credit rating classes, as well as the impact identified trends in non-performing loans have on the risk premium pricing for loans. When all of this is put together we are subsequently able to use this detailed analysis to adjust the recommended interest rates generated by our system and help ensure our investors are able to earn stable returns and minimise their exposure to risk.
You can find more information about the current development of default rates for loans on our platform, as well as about our net interest rate for investors after accounting for non-performing loans in the “Statistics” section of our website.
Do I pay an investment fee?
The only standard fee investors pay is the monthly fee for managing their active investments in loans to borrowers. The fee is a fixed percentage of the monthly instalment repayments collected from borrowers and is automatically deducted from the amount collected before it is transferred to the investor’s account.
However, Žltý melón is not like a traditional bank and so we believe our profits should be contingent on you making a return on your investment. For this reason, the monthly investment management fee is not collected on loans for which the borrower has not made their scheduled instalment repayment, or if they have repaid only part of it. The investment management fee applies only to money already invested with loans on our platform and is not charged on any funds that are currently held in your account but not yet invested via a loan auction.
You can find further information about the fees we charge in our 'Valid Schedule of Charges' here
Where do I deposit my money before funding loans for borrowers?
Before funding a loan for a borrower through your investment offer in a loan auction you need to transfer money from your bank account to your virtual investment account on our platform.
The money you transfer to your Žltý melón account is not held by us, but is deposited in a separate account opened at a major bank solely for that purpose and which is separated from the financial resources and all other bank accounts used by our company. Your money does not leave this account until a loan is fully agreed with a borrower whose loan you have funded, at which point the money is transferred directly to the borrower.
Money held for investors in this manner is not owned by iService, a.s., and therefore we do not account for it in our annual returns or operational budgets, nor do we use it in any other purpose than the one described above.
Currently, we use the services of two Czech banks with branches in Slovakia - UniCredit Bank Czech Republic and Slovakia, a.s. and Fio banka, a.s. - to open and operate these bank accounts on behalf of our investors.
The financial resources of our company, as well as the funds deposited on behalf of investors in these separate accounts, are subject to the protection of the bank deposit guarantee scheme, as determined by the actual wording of the ‘Czech Act No. 21/1992 Coll. on Banks, as amended’. This deposit guarantee scheme would provide protection for investors in the unlikely event that both the firms behind Žltý melón, as well as the banks where investors funds are deposited, where to experience financial difficulties and/or file for bankruptcy.
How do loan auctions work?
After a loan applicant has successfully passed our comprehensive credit assessment and verification process they are able to set up a loan auction and request funding for their loan from investors. Individual auctions are displayed in the “Auctions” section of our website, which is only visible to registered users of the platform.
On Žltý melón, there are two main types of auctions - Standard Auction and Risk-less Investment.
For Standard Auctions, the loan auction lasts for a maximum of 7 days. However, once the auction has been funded by investors to 100% of the amount requested by the borrower, it will then terminate in 24 hours, regardless of how long the auction was originally set to last for.
Throughout the duration of the auction, investors can offer an amount of money they want to invest in the loan and set the interest rate for which they are willing to lend this amount of money to the borrower. In order to provide security for investors, the maximum amount an investor can offer to fund in any one particular loan is set at 250 EUR / 10 000 CZK. Žltý melón will provide investors with a recommended interest rate for their offer to fund a loan, but the exact conditions under which investors are willing to lend a borrower money is entirely between them. During the auction, investors can ask the borrower additional questions in the ‘Details of your loan’ section of the auction page, in order to get a clearer picture about the borrower or find out any information not listed in the standard auction details, which they need to make an informed decision on whether to make an investment offer to fund the loan and on what terms.
When the loan is fully funded to 100% of the amount requested by the borrower, they can choose to end the loan auction early and accept the conditions offered by the various investors that have chosen to fund their loan. If not, the auction will continue until the scheduled termination date and the borrower has the opportunity to wait for other investors´ offers in the hope of securing a lower interest rate for their loan.
The system will automatically discard offers from investors with higher interest rates and replace them with better offers at lower interest rates if and when they are made by new investors during the course of the auction. If an investor’s offer is discarded and replaced by a new offer at a lower interest rate, they are still able to place a new offer at a lower interest rate in order to replace an existing offer made by another investor.
The borrower can also end the auction early, even if the loan as not reached 100% funding for the amount original requested by the borrower, at which point they will accept the agreed interest rates and conditions offered by investors for the portion of the loan that has received funding. A borrower can only choose to end a loan auction early once at least 500 EUR of their original loan amount has been funded.
Once the loan auction is over, borrowers have the option to accept the loan if they agree with the terms and conditions offered by investors, or to reject it. The auction must always be accepted or rejected as a whole; the borrower cannot accept the offers made by individual investors separately.
The Risk-less investment auction works in a similar manner, but lasts for 14 days rather than 7 and in this case borrowers determine the preferred interest rate for their loan themselves, rather than waiting for investors to set the interest rate they are willing to offer. The preferred interest rate set by the borrower is clearly listed in the auction details, making it easy for potential investors to quickly decide whether or not they are interested and willing to make an investment into the loan under the conditions set by the borrower.
While in these auctions investors have less control over setting the interest rate for their investment, if an investor does decide to accept the borrower’s listed terms and make an investment offer, they then have the benefit of a guarantee that their offer will not be discarded by another investor. This is because the loan auction will immediately terminate once it reaches 100% funding for the amount requested by the borrower.
However, although borrowers do set the preferred interest rate for their loan, if investors do not wish to invest on those terms they may still also make offer to fund the loan at a higher interest rate (up to 1.5x the preferred rate set by the borrower), but in these cases they receive no guarantee and their offer may be discarded by other investors that make offers at a lower rate.
How do automatic investments work?
In case you do not want to enter your investment offers manually, you can use the Investment Manager and its 'Autoinvestment' feature which will make your investment offers for you based on certain criteria you select and which match your desired level of risk and investment strategy.
When setting up the autoinvestment feature, you can either choose to use one our predefined investment strategies, or choose your to create your own. When you do this you will specify the detailed conditions for the loan auctions that you wish to make investment offers on, such as the borrower's risk class and type of loan, as well as well as your expected level of earnings from your investment, which is determined by the interest rates you offer to borrowers.
Once you have setup the autoinvestment tool, it will continually monitor the current loan auctions available on our platform and make investment offers to borrowers in the loan auctions that meet your chosen investment criteria. In order to keep you updated about the progress of your automatic investments, we will send you notification emails about any investments made in loan auctions that met your specified criteria, as well as any other relevant information about the progress or status of your investment offers and the loan auctions these offers have been made in.
The autoinvestment feature is available to all investors and as such it operates in a way that treats all investors fairly and equally with regards to making automatic investment offers, however in the case where there are more investors willing to fund a loan auction that are needed to fully fund the loan, the autoinvestment system will prioritises the investment offers that have the lowest interest rates and also take into account when they were made.
You may choose to only make investment offers via the autoinvestment tool, however, you can of course also choose to use it in alongside your manual investment offers, which helps ensure you can maximise the returns on your investment by carefully selecting loan auctions that are on the margins of your investment criteria and strategy.
Our system provides you with full control over the use of the autoinvestment feature and it can easily be turned on or off at anytime within the Investment Terminal dashboard of your My Account area.
Can I terminate my investment before the loan is due?
Yes, in a case you need to collect invested money before the loan is due, you can sell your investment on our Secondary market to another investor. You choose for how much you would like to sell it and agree with a new investor on specific terms.
How Does A Quick Loan Work?
This is a short-term loan of between 100 to 500 EUR that is repaid over a period of 1-6 months, with no hidden charges and an affordable fixed interest rate. These loans help borrowers cover any unexpected shortfalls in their normal income and spending, while also helping them build up their credit rating with us and avoid the trap of high cost lenders.
How does the Secondary market of investments work?
Our Secondary market makes it easy for you to sell any of your active investments on Žltý melón early to other investors in our community, meaning you can quickly turn your investments back into cash when you need it, regardless of how many months are left on the loan.
The way the Secondary Market works is simple:
- The seller creates an auction for the investment they want to sell and the asking price.
- Auctions run for a maximum of 7 days but can be cancelled at anytime by the seller for any reason
- If a loan repayment is made during this period, the auction will be automatically cancelled
- Investments can be purchased instantly by making a bid at or above the asking price for the auction
- Buyers can also bid an amount lower than the asking price for the auction, with an expiry date for their offer, which is then either accepted or rejected by the Seller
How pricing works on the Secondary Market
Prices for investments are listed as a % of the current remaining loan principal, which can be a premium price (>100%) or a discount price (<) depending on the type of loan and current repayment status
If an investment is not sold within the 7 day auction period the seller has two options:
- Restart the auction immediately at a reduced price; OR
- Wait at least 30 days before restarting the auction, with any asking price they want
If a loan auctions is restarted immediately, the asking price must be reduced by a minimum amount, which is based on the current loan repayment status
- At least 0.1% for 'Good Repayments' (loans with less than 30 days late repayments)
- At least 1.0% for 'Late Repayments' (loans with more than 30 days late repayments)
- At least 5.0% for Default/Collections (loans where repayment is made via legal enforcement)
If a seller cancels the auction during the 7 day period, it counts as 'unsold' and the price reduction rules mentioned above will apply
How to view the Secondary Market
You can quickly access the Secondary Market via the top menu bar or the dedicated section of the Investment Terminal.
How do I collect the monthly repayments for loans I've invested in?
When a borrower makes their scheduled monthly loan instalment repayment, the part of the instalment payment that is attributable to your original investment (including both loan principle and interest charges) is immediately credited to your virtual Žltý melón investment account. This money can then be reinvested in other loans, or can be transferred to your bank account.
Can I withdraw the money repaid to me by borrowers?
Of course. You have full control of all of the money in your investment account and can transfer it back to your bank account at any time you wish.
The funds available to withdraw includes all of your deposited money that is not currently invested in loans you have funded (or that is reserved for loan offers you have made, but that have not yet been accepted or rejected by the borrower) as well as all the collected monthly instalment repayments made by borrowers.
Can I reinvest the money I receive from a borrower's repayments?
We recommend reinvesting your money as often as possible within your chosen investment strategy, as it allows you to maximise the return on your original investment.
You can of course transfer the money in your investment account back to your bank account any time, however, Žltý melón gives you the opportunity to earn higher returns if you reinvest your money in new loans. By doing this you will profit by reinvesting through Žltý melón, especially when compared to the returns you would earn by depositing your money with a traditional bank.
How is the income I earn from investing in loans taxed?
On Žltý melón, the investor earns money from the loan interest paid by borrowers as part of their scheduled monthly instalment repayments, which is taxable in compliance with the Law on Income Tax. Žltý melón does not pay any taxes on behalf of investors that are associated with the earnings associated with the returns on their investments in any loans provided through our platform.
It is for each investor to fulfil this legal obligation in accordance with the laws of the EU and whichever country or countries they have a legal tax obligation in as a result of their employment, residency, nationality or any other factor arising such an obligation under the applicable laws and regulations of that sovereign power.
You can find more information about how to manage and fulfil this legal obligation regarding taxation in the “Taxes and contributions” section of our website.
How do you calculate the Net Interest Rate, Net Investment Returns and Risk Vintages for my investment portfolio?
We are committed to providing you with the most transparent, accurate and helpful statistics about your investment portfolio on Žltý melón, as well as the underlying methodology we use to create those statistics!
How we calculate the Net Interest Rate and Net Investment Returns
The Net Interest Rate statistic for your investment portfolio provides you with a clear indication of what you can actually expect to earn on our platform, taking into account your investment fees, the current mix of loans in your portfolio as well as the expected losses from any loan defaults.
We calculate this statistic using the scheduled monthly installment payments for your current loan portfolio, which includes the repayments of loan principal, interest charges, penalty fees minus our administration fees. We then adjust this amount to take into account the expected losses resulting from any loan defaults as well as expected income you will earn from the legal enforcement and collection of those debts that we undertake on your behalf. These adjustments are based on the historical performance of our loan portfolio and the recovery rates for loan defaults on our platform.
Finally, we take the adjusted monthly installment amount for your investment portfolio and weight it based on the average maturity dates and investment amounts for the individual loans in your portfolio, to provide you with the Net Interest Rate for your investment portfolio on Žltý melón.
This statistic not only allows us to provide you with a simple and highly accurate statistical representation of the current 'real-time' performance of your investment portfolio, but we also use this same methodology to provide statistics about the performance of our entire loan portfolio and the average returns earned by all of our investors.
It also allows us to provide you with a Net Investment Return statistic, which gives you a simple yet highly accurate projection of the future earnings from your investment portfolio on an annual (p.a.) basis, while also fully taking into account the diverse mix of maturity dates and interest rates for the individual loans you have invested in on our platform.
Your Net Investment Return statistic is calculated at the end of each calendar month and therefore reflects the most recent data about your investment portfolio at the end of the previous month.
How we calculate loan default rates and 'Risk Vintages'
Risk Vintages are a standard tool for comparing the quality of a loan portfolio and risk management. The graph we provide you with shows how the levels of loan defaults on our platform has changed over time, based on the most recent loan repayment data and the year loans were provided.
This gives a simple and clear visual overview of the percentage of loans that default on our platform in relation to when they were issued (e.g. the % of loan defaults after 6 months, 12 months or 24 months), as well as how this compares for loans issued in different years (e.g. the % of loan defaults after 6 months for loans made in 2014, 2015 and 2016).
What is the notification centre?
On Žltý melón you have the functionality of the notification centre with unique characteristics.
You can easily try out the new Notification Centre using the new icon at the top of the page to access your personalised “Feed” of investor information.
The notification centre provides you with a constantly updating news feed with all of your notifications about your activity on Žltý melón. The information you can find here is the mostly the same as you have previously received via email, but in an easier to digest format that won’t clog up your email inbox! We have also added several new notifications to help you get the most out of using our platform.
Notifications are divided into several different categories and we have included several filters on the left to help you get the information you want as quickly as possible. You can mark individual messages as ‘read’ or mark multiple messages as ‘read’ at once in order to clean up your news feed.
How do I follow another user, what information will I see and can I stop other people from following me?
As well as provide a central location for all of your notifications we have also added the ability for you to ‘follow’ other users on Žltý melón in the same way you would on Twitter or other social networks. This innovative feature will allow you keep track of what your friends or some of our top investors are doing in order to help you learn from other people in our community and increase the profits you earn from your investments.
You can easily follow another investor by searching for their name within the notification centre, or by using the ‘Follow’ button in their investor profile or from within our discussion form. Once you follow an investor information about their investment activity will be displayed in your news feed and if someone follows you they will be updated about your activity.
We are always conscious about protecting your privacy at all times, so if you do not want to share you investment activity with other users it is easy to ‘Block’ any investor that has decided to follow you.
However, based on the activity in our forums we think that most of users will welcome the opportunity to communicate more with each other and therefore we have also added the ability for you to post a short message via the notification centre that will be sent to all of your followers.
Can I configure which email notifications I receive?
Yes, in our notification e-mails you easily choose to not receive messages of that type in future using the link at the bottom of each email.
You can also easily control your email notification settings and which notifications appear in your Feed using the options in your Profile.
I can access your site on my phone already, why do I need a special app?
We have designed our mobile app specifically for phones (and their small screen size), which means it will load faster, look better and just generally ‘more better’ in pretty much every way to use the app – and you can do it anywhere!
The application will enable you in particular:
• Simple and quick access to your investment account
• Monitor the status, profitability and composition of your investment portfolio
• Access to current investment offers
• Investing in new loans
• Grant, conversion, or withdrawal from your account
• Access the Wallpaper and track all notifications about your portfolio
The app is currently available for mobile devices using the Android operating system that most of our users use. However, we do not forget even the Apple owners of iOS-based devices, for which we are also preparing a version of the mobile app.
You can download the application at Google play
To use the app, you need to have your mobile device connected to the internet. The app currently does not support offline mode.
You can also enjoy other features in the future. It will in particular:
• Overview and detail of active and discontinued investments
• Sales and Investments in the Secondary Market
• Autoinvest Management
• Follow-up of investors and group management
• Overview of transactions
• Additional graphs and analytical tools for the portfolio
• New user registration