W*** H***** loan

I am yet to receive my email detailing LC's proposals. However, in the meantime, my view is that accruing interest from the point of bidding is great but only available in a few places. For all the others interest should either be accrued from the end of the auction period (or date of drawdown if before end of auction period) to help speed up the slow processes on some lending sites such as LC OR from the date the borrower actually takes the money. However in the case of the latter the time allowed after the end of the auction period has to be very clear and strictly adhered to (be it 5 days, 7 days, 10 days or whatever - that is for LC to decide). Currently this appears to be a vague wishy-washy period which is not good for lenders or borrowers.

One of the big problems with how this loan was handled was the lack of clarity and communication - I have not been with LC long so please forgive me if this was spelt out clearly in the past and I missed it. Lenders and borrowers alike should know ahead of any auction exactly how it is going to work. Loan auction will last X days, after it ends there will be Y days for the borrower to decide whether to collect or not, interest will paid either from end of auction or Y days after auction, but definitely from when the borrower takes the money. Everyone knows where they stand. I don't have a problem with being told that Auction A will last 7 days and the borrower will have up to 5 days to decide and that Auction B will be 14 days and the borrower will have up to 7 days to decide. They don't have to be the same, but it may cause a headache for LC to implement. The point is it is clear and I can decide whether I want to invest in either of the auctions and the borrower is clear what is expected of them.

It is up to LC which way they go, but please, please, please make it very clear and up front for everyone to see. It will benefit borrowers and lenders alike - we don't like being kept in the dark or feeling that some-one is trying to pull a fast one on us (borrowers or lenders). Sneaking through a month's interest-free loan for this borrower was an example of that.

Bottom line - once the borrower has the money they should be paying interest on it. 

Lastly this wasn't an attack on this particular borrower (who happens to be not too far away from where I live - one of the reasons I invested), but on the principle of how the loan was handled. I am hopeful that future loans will be handled and communicated better.

Here is where I totally disagree with you. It is MY money (lender's money) that is lent. So it cannot be LC to decide arbitrarily the number of days it takes to pass the money to the borrower, or impose things which are out of the world (like giving a borrower 3 weeks to decide or give them free money for a month).

Of course the interest must start accruing at very least when this is transferred to the borrower, but also the time needed between the end of the auction and the delivery of the money to the borrower MUST be very limited and well known in advance (for example 5 days maximum).
As of now, LC timings are honestly disastrous. An auction lasting 10-15 days or 15-20 days to pass the money out are honestly unacceptable when there are plenty of alternatives which work fast and efficiently.

Instant returns are a bonus, but interest simply must start accruing once funds are drawn down by the borrower, as that is when a risk is started.

Well,
good luck to those happy with the platform. I will be happy to see you all buy my loan slices on the secondary market :-)

The LC letter with their review decision was an answer to a direct complaint I made, but it mentioned that the 'compensation' they offered was applicable to all lenders in this loan, so I assume they will communicate to them all. Ask them and I am sure they will pass to you all their decisions.

Well, I have been investing in p2p for a long time and cannot remember any platform giving borrowers money for free or not asking payment for any single day they had their money.

The most important thing is fairness and openness to me.
FC tells me that the interest starts accruing the day the auction ends (and it does!). It is a clear and very precise statement.
SS gives interest on any single day you invest (whether or not the borrower has withdrawn does not matter at all) instantly and is clear about this as well.
Same for RS. Immediate accrual from the start of investment.
All of the above are very fair mechanisms.

On the other hand, LC had a policy which was totally arbitrary (i.e. they will help the borrower as much as they can, even giving 3 weeks total free money).
This is a point which is unacceptable to me.

They seem to wish to change, but instead of taking a clear stance they are still proposing an arbitrary and unknown date, i.e. the interest starts accruing when the borrower gets the money, which is still totally unknown (and unpredictable) beforehand. This is an unknown date, not verifiable by lenders and LC could agree it anyway arbitrary with the borrower so that money does not get interest for weeks, so to me this is not a sufficient step forward.
I have passed the feedback to LC, even if I will not invest on here until (if and when) things start moving faster and clearer.

Why should I risk my money or even see it given for free for weeks to unsecured borrowers when I can have it at a given certain rate from day one of my inestment an with additional security?

An update re W** H** / future loans has been emailed to active investors - the exact details of how this is to be resolved to follow early next week. Looks promising.

Clarity is very important to build trust and confidence (thank you registerme - that was what I was saying). So we now know that from now on the 1st interest payment will be 4 weeks from drawdown, ie interest will start to accrue once the borrower has the money. The next point that needed clarity was how long after the end of an auction before a borrower draws down. I emailed Lending Crowd about that and their reply is

"The Borrower has 5 working days to accept the offer, in exceptional circumstances we will extend this on the basis that there has been a lot of effort by the Borrower and the Investor to fully fund the loan. Once this is accepted the paperwork is issued and in accordance with our Terms and Conditions (8.2) they have 14 days to return the paperwork. This period of time covers any possible holidays and any legal advice that may be required, they are obviously not going to arrange a meeting with a solicitor if they are sure they are proceeding with the loan.
In most cases the paperwork is returned in a couple of days, and we accept scanned copies pending receipt of the original paperwork in the post."

That also is now very clear, although potentially nearly 3 weeks if a borrower takes their fully allotted time, however most don't. I am now much, much clearer on how Lending Crowd work and this is rebuilding my trust in them. Balancing investors and borrowers needs in a practical way to keep all sides happy cannot be easy and I think Lending Crowd have reacted quickly and positively to sorting this problem, for which they should be commended. Their solution may not please everyone, but we are now clear on how this works.