FUNDING Circle has changed the way its projected returns are calculated, so that the data applies to a larger proportion of its investors.
The peer-to-peer business platform previously provided an estimate based on the minimum annual returns that 50 per cent of investors could achieve, after fees and bad debts but before tax.
Funding Circle said on Friday that its projections will now show the minimum rate that 65 per cent of investors could achieve.
The target rate on the Balanced return portfolio is now 7.2 per cent rather than 7.5 per cent, while the Conservative product remains at 4.8 per cent.
Investors will still see their own personalised return on their summary page based on the amount they are investing and their portfolio.
The platform has also said it will expand the range of rates on offer to borrowers in different risk bands from the existing six.
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“Currently, the projected return shown for either the Balanced or Conservative lending options is the median estimated return, after fees and bad debts but before tax, across all investors using that option,” Jack Pritchett, customer communications manager for Funding Circle, said in a blog post on the company’s website.
“As you lend to your own individual portfolio of loans your own personal estimated return may be higher or lower.
“The median shows the lowest projected return that 50 per cent of investors can expect to earn by lending through that option. We want more investors to experience a higher personal estimated return than the overall projected return, so we are refining the calculation.
“It will now show the lowest projected return that 65 per cent of investors can expect to earn by lending through that option.”