Why our lender rates are increasing
We’re thrilled to announce that, as of Monday, our five-year lender rate is increasing to 5.5 per cent – the highest level it has reached since August 2016. So why are our rates on the rise? We have more lenders on our platform than ever, and our lenders are, on average, funding more into their Lending Works accounts than ever before too. However, the change has actually come on the other side of the equation - we are rapidly growing our loan origination volumes; or, simply put, more high-quality loan customers want to take out a loan with us.
Unlocking new channels of loan origination
For the past 24 months, we have focused intensively on two things: making our software better so customers are more likely to use Lending Works, and integrating with more partners through which customers can access our platform. As a result, we are approving vastly greater volumes of loans for creditworthy customers each day.
The nature of a platform like ours is such that the challenge of balancing the supply of lender capital with demand for loans from borrowers is an ongoing one, and fluctuations in rates tend to be indicative of the status quo of this equilibrium. We expect to issue over £5 million in loans this month for the first time ever. And, with a number of new partnerships set to launch in the coming months, we expect that figure to double to £10 million per month by mid-2018.
Smashing records; mitigating risks
However, in order for us to break new ground in this manner, we need a little bit of help from investors like you. Fortunately, the gains are mutually beneficial. Not only will you reap the rewards of our tremendous five-year returns, but your money will also be matched with creditworthy borrowers in just a few days (given the current shorter lending queue), so your money will start working for you almost immediately – and enable you to stay one step ahead of inflation (currently 2.9 per cent).
Of course, it's important to remember that peer-to-peer lending is not a savings product. Capital is at risk, and not protected by the Financial Services Compensation Scheme. In order to help mitigate these risks, we developed the Lending Works Shield; a lender protection model which includes a contingency fund to cover missed loan repayments.
Seize the day - grow your money with us
In short, there really has never been a better time to lend your money through our platform. At a time when savers are seeing their rainy-day funds eroded (in real terms), and investors are navigating stock market volatility, P2P offers a credible alternative which strikes a sweetspot between risk and reward that is hard to beat. The latest uptick in returns only underscores this further. Now is the time to get more bang for your buck, and Lending Works is the place to do it.
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.
Wednesday’s Budget speech, coupled with the cut to Bank of England rates, represented a decisive response to the coronavirus. Here we analyse the impact it will have on mitigating disruption from Covid-19, along with the long-term implications of this significant fiscal stimulus.
Rumblings from the Treasury ahead of next week's Budget suggest tax grabs will be needed to fund increased spending, and it appears UK enterprise could be in the firing line. Here we articulate why targeting entrepreneurs and small business is ill advised.
In a difficult climate, customer acquisition and lead generation present stern challenges for UK retailers, and a great deal of marketing spend invariably gets directed towards getting feet through the door.
Over the last decade, there can be little dispute that the reputation of mainstream banks – and particularly the so-called ‘Big Four’ (HSBC, Barclays, Lloyds and RBS) – is at its lowest ebb.
The 2019-20 ISA season has been a damp squib, with banks disinterested in attracting savers’ cash, rates cut, and the stock market in freefall. However, the emergence of the IFISA means alternatives beckon for those seeking a stable middle ground in terms of risk and reward.
In a decade of slow recovery, the rapid rise in asset prices has been the standout. But how sustainable has price growth been, and could we be in the midst of a bubble?
Most people consider income tax to be a given, but in the UK it is barely two centuries old. In this article, we look at how this tax has developed over the years, and also why it is set to remain at the core of our tax system for many decades to come.
Open banking celebrated its second birthday last month, but has the ‘revolution for financial services’ that was promised actually come to pass? In this article, we look at the progress the initiative has made so far, and what the future holds in the face of high levels of scepticism.