Peer2Peer Finance News
The UK's first peer-to-peer finance magazine for investors and the industry
  • Home
  • News
    • Personal Finance News
    • Industry News
    • SME News
    • Global News
  • Property
  • IFISA
    • IFISA Guide
  • Video
  • Open Banking
  • Cryptocurrency
  • Features
    • Joint Ventures and Promoted Content
  • Comment & Analysis
  • What is P2P?
  • Partners
  • Events
    • Past Events
  • P2P Power 50
    • Power 50 2020
    • Power 50 2019
    • Power 50 2018
    • Power 50 2017
  • Sign up to our e-newsletters
  • Magazine
  • Directory
  • Jobs
  • My Account
    • Manage Account
    • Change Password
    • Log In
    • Log Out
Samir Desai 1
October 31 2016

Funding Circle changes rates

suzie10 Industry News, News Autobid, borrowing rates, cost of borrowing, Funding Circle, interest rates, p2p borrower, p2p investor, SME borrower, SME lending, Zopa

FUNDING Circle has altered its interest rates, lowering the cost of borrowing for lower-risk loans and raising the cost for higher-risk ones.

The peer-to-peer lender said that the new rates, which come into effect on 7 November, will not affect loan parts currently held by investors and will not apply to property loans that are priced individually.

An A+ loan, the lowest level of risk offered by Funding Circle, now has an interest rate of 4.9 per cent on a six-month loan and 5.5 per cent on a 12-month loan. In contrast, last September a 1-12 month loan in the same risk category had an interest rate of six per cent.

At the other end of the risk bands, an E-grade loan now has an interest rate of 17.9 per cent on a six-month loan and 18.9 per cent on a 12-month loan. Last September a 1-12 month loan in the same category offered an interest rate of 17.4 per cent.

It said investors with a diversified portfolio should expect returns of around seven per cent, taking into account fees and bad debt – which is similar to the returns that they can expect now.

“We regularly review our rates, taking a number of factors into account including macroeconomic trends, expected bad debt rates and wider competition in the market,” said the company, which is the third largest lender to small businesses in the UK.

“Over the last six years you have helped over 17,000 small businesses access finance. This has provided us with more credit performance data, allowing us to make even more accurate pricing decisions.”

Funding Circle added that there will be no change to its estimated bad debt rates as a result of the interest rate alterations. It also said that investors who use the platform’s ‘Autobid’ function do not need to do anything as Autobid will continue to place bids on new loans at the new rates.

Funding Circle is not the only P2P lender to change its rates recently. Consumer P2P platform Zopa has cut its rates twice in two months, which it attributed to increased competition and the lower base rate.

NACFB chief Adam Tyler to step down after 11 years VPC streamlines whole loans portfolio, but Funding Circle makes the cut

Related Posts

geld

Global News, Industry News, News, Top 3

October heralds record December despite Covid-19 crisis

fca-building

Industry News, News, Top 3

FCA lumps P2P lending in with higher risk products again

Business process automation concept. Gears and icons on abstract background.

Global News, Industry News, News, Top 3

Mintos updates algorithim to boost diversification

Popular posts:

  • Government responds to P2P fraud query
  • MP queries level of fraud in P2P lending
  • Aave launches higher risk, higher return option for…
  • The alternative lenders accredited for CBILS
  • Some firms set to pay more than maximum CBILS interest rate
  • Growth Street to return 100pc of investor funds
Back To Top
  • Home
  • Contact
  • About
  • Team
  • Advertising
  • Subscribe
  • Privacy
  • T&Cs
  • Disclaimer

Follow Us on Social Media

© Peer2Peer Finance News 2020
• Additional design by