Estimated matching time (LW)

I am well impressed.  Just transferred 10K over from AC ISA, expecting there to be cash drag once it hit LW.  It arrived at LW late on 13th and by the end of 15th all bar £10 was lent out!  So the cash drag turned out to only be AC taking the full 30 days to release my money from their cash account.

Quite swift, the lower end of the 1-7 days,  I have had some "Loan chunk acquired via Quick Withdraw" at 5% that I will live with.

New money credited on the 2nd, chunk created on the 3rd at 6.5%  happy with that.

You will need to wait several months to see how things settle down IMHO.

The fee free sellout finishes at the end of December, but it may take a bit longer for all these to be actioned

When Ratesetter offered the fee free sellout in the past it took several months for things to settle down so i would be wary of trying to deduce anything yet.

I doubt we will really know until the end of 2020 what the new normal is.

There is usually a fairly quiet loan period over end Dec, start Jan so it will be difficult to deduce much.

You could download the whole loan book and see how much of a reduction in new loans there has been vs previous months, but be aware lending volume was variable anyway so you would need to do this over several months. 

Indeed.  It's difficult to overstate just how different the borrowers are on Lending Works compared to their own past and other platforms, It seems to me that LW have decided the best way to compete on loan origination is to target much higher risk borrowers. Hence in 2019 we see an average APR of 14.2% (in 2014 their average APR was just 7.7%),

 Obviously, the extra 'fat' in the gross rate gives a little more room for defaults, but other platforms have typically found that the increase in default rates is higher/worse than a linear trend might suggest. Time will tell how LW will fare.

Well, it is the case, is all I can say.

Check out the top right graph here: www.lendingworks.co.uk/about-us/statistics

and the associated quote: "Average APR by year of origination, weighted by loan principal amount. As we’ve grown, we’ve prudently expanded our risk appetite and average APR to meet demand from a wider pool of borrowers. We do not expect the average APR to increase materially in the future."

edit: LW's Matthew has responded to this point before (check out his recent posts as I can't be arsed this fine Sunday morning ). I still however personally don't fancy it, although at least with the new platform structure the potential short-term consequence will just be poor lender returns rather than possible platform failure.

edit2: Others may take the view that pooled higher risk borrowers might deliver a totally acceptable adjusted return.

The average Apr in the past always seemed very low to me given the rates they were offering lenders. In fact I couldn't see how they could possibly do it long term. One of the reasons they did it was perhaps to help them build their business quicker. 

At the old average rate they were trying to identify some of the best prime borrowers who are rate sensitive. This is not easy, as it is  difficult weeding out the not so good borrowers. It is especially difficult for a new organisation like LW. I can see how they struggled to offer the rates to lenders, cover overheads, make a profit and pay into the PF. I don't think they can compete at the average 7.7 apr market and pay lenders such a high rate. 

For comparison, have a look at the RS website for the range of rates they charge. You can also see the APR for each loan in the updated website. 

With personal debt increasing www.bbc.co.uk/news/business-50671834  and an uncertain economic outlook I can see why it was prudent for LW to review who they were lending to and at what rates. 

It's both. They've lowered our rates and increased their (average) borrower rate.Which, as above, does not necessarily equate to more profit for LW.