SAVING Stream has updated its policy on defaults and secondary market rules.
The peer-to-peer lender said on Wednesday that its previous default policy was not formalised or publicised widely, so now borrowers and investors will have more clarity on how defaulted loans are managed.
A loan will be deemed to be in default if the amount owed is not paid within 180 days, which Saving Stream is calling a tolerance period.
Interest will still be paid to the lender for the first 90 days of the tolerance period, but after that it will be accrued but not credited until the underlying security is sold. The final interest credit will depend on the repayment secured from the asset sale.
The borrower may also get a loan extension if they are able to provide funds to pay the interest owed within the tolerance period.
Read more: Saving Stream warns of “funding gap”
In another change on the platform, secondary market purchases will only be possible if lenders have cash in their account. Previously lenders have been able to invest first and pay later, but this option will now only be available on new loan launches.
Saving Stream also announced on Wednesday that its investors have been paid a cumulative total of £20.5m in interest.
The P2P property specialist said it has already credited February’s interest to all investors’ accounts.