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Peer to peer

New product updates live!

Since opening our doors back in 2014, we’ve always prided ourselves on living and breathing two key principles at Lending Works: innovation, and putting the customer first in everything we do.

When it comes to the latter, we don't only do what we think is best for our customers. We actually take on board their feedback too, and, in many instances, use these insights to help shape our business. We're very proud of the high regard our lenders hold us in, as evidenced by our feat of winning the Moneywise Customer Service Award for ‘Best P2P Platform for Investors’ four years in a row. But we never rest on our laurels, and, fuelled by popular demand, we're pleased to announce two new investment products for consumers.

What's changing?

Prospective investors can currently lend over either a three or five-year term. Whilst investors will still be able to fund loans with terms from 2-months to 5 years, we're updating our existing products with more dynamic customer-friendly features. 

As things stand, there is little to distinguish between lending over three or five years, other than the fact that returns are invariably higher over the longer term. Both products feel like a long-term commitment despite some investors looking for a more flexible, accessible option. But that's soon going to change when our new 'Flexible' and 'Growth' products set to launch in the next few weeks.

Flexible product

If you're keen to beat the rate of inflation and give peer-to-peer lending a try, but want the flexibility to access your money as and when you need to, without incurring exit fees, then this is the one for you. Here are the standout features of the new Flexible product:

- Ideal for shorter-term investors who may need early access to their investment

- Flexible investment with competitive rates

- Invest across loans from two to 60 months

- No charge for selling loans to access your money early

It is the final point which represents the biggest shift. At present, investors pay 0.6 per cent of the amount they want to sell. The new Flexible product allows fee-free sales to accommodate an unexpected change in your personal circumstances.

The same procedure will still apply for accessing your money early, in that we'll need to find new investors to purchase your loans, but once we've done that, you can expect your money to be back in your nominated bank account within 24 hours. We’ll also cover any discount if the current lender rates are higher than those on your loans.

Growth product

On the other hand, if you're keen to maximise returns, and are confident you won't need to access your money for the near-term future, then our new Growth product is just the ticket. Here's what you need to know:

- Ideal for longer-term investors

- Higher rates for maximum growth

- Invest across loans from two to 60 months

- 0.5 per cent fee for selling loans to access your investment early

With the Growth product, you’ll be able to invest in loan terms from two to 60 months, and we will continue to offer the option to either automatically withdraw repayments weekly into your bank account for supplementary income, or auto-reinvest to earn compound interest.

We will also still be charging a fee for selling loans within this product if you need to access your money early, albeit at a lower rate of 0.5 per cent. As with the Flexible product, the procedure for withdrawals will remain unchanged, and your loans still may be sold at a discount if the current lender rates are higher than those on your loans (as applies currently).

Both the Flexible and Growth products will be available in either ISA or Classic variants. 

Please note, however, that no peer-to-peer lending products, including Growth and Flexible, can guarantee you instant access to your investment, as this will always be contingent on us finding investors to purchase your loans. 

What about existing customers?

Existing three-year investments will be automatically migrated to the Growth product, and thus will not benefit from fee-free access. However, any repayments will be reinvested into the Flexible product (unless otherwise instructed by the investor), thus ensuring that this portion of the investment can be accessed free of charge.

Those who have invested over a five-year term will be automatically migrated to the Growth product, and thus see very little change - other than the reduced fee of 0.5 per cent for withdrawing their investment prior to it maturing.

When will these changes take effect?

New investors will be able to access our Flexible and Growth products from 23rd July 2019, existing investors will be migrated to the updated products in August.

How is this likely to affect lender rates?

Our track record for stability with regard to lender rates speaks for itself, and we don't expect any significant volatility to ensue following the launch of these new-look products. We will, of course, remain at the mercy of market forces, and rates will be based on the supply of capital from investors versus the demand for loans from creditworthy borrowers.

We do expect to see some uplift in investment, particularly within the eye-catching new Flexible product. But we also have a number of initiatives in the pipeline to boost loan origination, and, as such, are confident of maintaining a steady equilibrium between lender capital and loan demand.

Why are these changes being made?

This is what our Lead Product Manager, Robbie Humphreys, had to say:

"We've listened closely to feedback from our customers, and also conducted extensive research into market trends. The clear message was that investors value the flexibility to either invest short-term, or have easier access to their money in the event of a change in circumstances.

"We wanted to develop a more competitive, innovative product catalogue and by providing a clear contrast between our two primary investment options, we'll be in a strong position to cater for the needs of a wider range of investors. It further underscores our ongoing commitment to innovation, and to making peer-to-peer lending a simpler, more accessible investment choice for the typical UK consumer." 

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Our website offers information about saving, investing, tax and other financial matters, but not personal advice. If you're not sure whether peer-to-peer lending is right for you, please seek independent financial advice, and if you decide to invest with Lending Works, please read our Key Lender Information PDF first.

As with all investments, your capital is at risk.