Lending Works

Not I, but if you ask them to contact the forum, and a board set up for them, it might attract some opinions from 'the crowd'.

I've dipped a very small toe in to see how it compares.

I've met them on several occasions, they are members of an industry fraud trade body. Nice, professional people and I expect they'll do well. I have asked them to set up here, perhaps if they do they'll even get some of my lender cash!

They have an interesting additional layer of protection from "insurance". I'd be interested to know more about this. They get a mention here:

www.independent.co.uk/money/spend-save/money-alert-alternative-finance-9862551.html

but this only mentions job loss, illness and death. Whereas the primary reasons/definitions for default are debt spiral and over-indebtedness. But perhaps this was just the newspaper not being thorough, and the insurance covers everything?

Kevin.

Email came in Friday with the rates for the next week.
Up to 3 year loans - 4.1%
Up to 5 year loans - 5.5%

No change from last week.

They are also having a cashback promotion (not sure if it's for new as well as current lenders)
so I added some more and received the email telling me it had arrived within an hour. I've just set up the Autolend* facility with 80% of the funds up to 3 years and the remaining 20% up to 5 years. It'll be interesting to see how quickly they get allocated.





* Autolend
There are three options:

up to 3 years

up to 5 years

wallet (your cash account)

You decide how much to reinvest by typing a number in the % box. Nice, simple and easy (if it works).

Hi guys

Just wanted to introduce myself as a representative of Lending Works. We're certainly happy to discuss any issues you have on here.

Thanks for taking the time to post. To address a couple of earlier comments:

In insurance terms, loan defaults generally fall into either "can't pay" or "won't pay". Our Shield seeks to minimise the risks to lenders as far as possible using insurance to cover defaults from the "can't pays" and a reserve fund to cover loan arrears and defaults from the "won't pays". The insurance covers redundancy and loss of employment, critical illness and death, in addition to systemic fraud and cybercrime.

Westonkev makes a good point regarding debt spiral/overindebtedness - this is certainly true of a loan book which covers a wide risk spectrum, including loans originated with high indebtedness ratios. However, for a prime loan book with extremely prudent indebtedness/DTI requirements, this risk diminishes (albeit can never be eliminated). There of course exists a risk that we lend to a borrower at the very start of a debt spiral, however this is deemed to be an acceptable risk given the robustness of our underwriting process. The thought process behind the insurance was to provide protection against the effects of major negative economic events such as widespread unemployment during and following recession, whilst still offering extremely competitive lender returns.

Our arrears and default rates are both still 0.00% almost 11 months in - clearly we do not yet have a mature loan book but as time goes on this should start to increase confidence in our underwriting process. 

I'd also add that our reserve fund currently covers in excess of 2x our overall (prudently calculated) expected default rate. So even without any insurance cover this is still a healthy safety net. I hope that helps clarify a few points.

Thanks

Hi Bob

Our 3 year market is very active at the moment - funds are typically being matched within 24-48 hours. When we increased our 5 year rates we had a large influx of lending capital so it's taken some time to work through that queue - apologies for any delays in matching your 5 year funds. We'll be turning on additional loan channels in the new year which will increase the demand for 4 and 5 year loans, so matching times will improve accordingly.

We do have some general loan stats on our Statistics page: www.lendingworks.co.uk/community/statistics-centre

However, we are keen to hear from our lenders if there is additional information you wish for us to show. We're constantly looking at improvements in this respect so welcome your comments. We're also fully committed to transparency - we started off from the viewpoint of keeping things simple, but this has to be balanced with availability of information.

You'll receive lender statements on a monthly basis (downloadable pdfs from the Statements screen). However, adding a live transactions trail to your Lender account is something we'll look to implement Bob, thanks for noting.

Just to clarify - the rates you see advertised apply across all loan terms within that pool. For example, if you lend "Up to 3 years" you'll receive that rate on 1, 2 and 3 year loans. With no fees for re-lending, you will not be any worse off by being allocated 1 year loans. In fact, you'll be better off as 4.1% is a market leading 1 year rate of return. Clearly though you should expect that some of your funds would be allocated over 3 years so you should bear this in mind.

Thanks for the feedback - any ideas are welcome and will be considered.

Regarding your cashback promotion - you should receive this next week.

Thanks