Suspended loans in new ISA 30DAA

QAA and 30Day work differently in that you only really have notional ownership of any loan based on the percentage of the QAA/30Day you have and the amount of that loan in the QAA/30Day. You can still sell out as long as there is cash in the QAA/30Day or other loan units can be sold to fund your withdrawal. In theory someone may be left 'holding the baby' if everyone tried to sell out.

EDIT: interest is paid irrespective of defaulted loans, assuming the non-defaulted loans are earning enough interest to pay and/or the PF is funded enough to support the interest missing payments... and of course forgot to mention the IFISA QAA/30Day is the same QAA/30Day as the non IFISA accounts, it is not a new pool of loans.

in some ways investing in the QAA/30Day is like investing in an investment trust where technically you could say you are invested in the stock the investment trust is invested in but you are not actually in that when you invest the trust does not go and buy a portfolio of stock for you however the fund is managed for all investors.

As far as I understand interest will always be paid at the advertised rates assuming the PF is funded and there is enough income from the loans in the QAA/30Day to support full payment of interest. In the event of the loans held in the QAA not providing enough interest I believe that interest rate can be reduced however I understand this to be only happen once a month. Having said that, AC have never actually put in writing what thresholds exist and therefore at which point interest may be reduced in the future. Bottom line is it is a capped rate that will never exceed 3.75%/4.25% but there is a possibility it could be reduced by AC if conditions dictate.

Hope this helps.

Well, that's one way of looking at it. I might point out, though, that exactly the same is true of pretty much every "investment" you might make. If all the buyers in the stock market go away, your shares are worth nothing. Ditto art, gold, property...

Sure, there is a possible failure mode for the P2P market where there is massive loss of confidence (for whatever reason), followed by a run on all the easily accessible money and a disappearance of new investors. In such a scenario the best you can hope is that most of the borrowers do pay up and that you get your money back at the end of the set loan periods. You can slightly reduce this risk for yourself by keeping to shorter loans so that you won't be the last one out, though that is usually at the expense of reduced return. Although its likely that such a massive market failure would be accompanied by general economic turmoil and thence high loan failure rates.

That's the risk which you incur for the benefit of a rate of return ("in normal market conditions") which is a lot higher than a measly 1% on cash.

Your choice.

Suspended loans are only tradable in the access accounts as long as funds have been ring-fenced in the provision fund to cover the expected losses, and then only with others in the access accounts.  Otherwise trades in those loans cease and lenders are stuck with holdings in those loans.  If that ever happens then lenders will be informed.  Customer services will be able to talk you through the detail should you have more questions.

As the account grows your holding will be rebalanced to match the average, so you will hold less and less in each loan as new loans are bought with fresh funds, as your holding is then rebalanced into those loans.

What I said is true and the customer service rep was incorrect.  I suspect they've confused your question with the other non-access accounts.  I'll make sure they are corrected.

cb25 - I suspect that the answer could be deemed a financial promotion as it is related to an inducement to lend and hasn't been explicitly stated elsewhere, in which case it has to go through our compliance process for sign off as per FCA regulation and general best practice.