Proplend has made use of an exit fee charged to borrowers on late loans for the first time.
The peer-to-peer commercial property lending platform has always had compulsory exit fee on some of its loans as well as early redemption charges.
But the platform’s chief executive Brian Bartaby (pictured) says a different exit fee for if a loan is not redeemed on maturity was triggered for the first time in September as part of the agreed finance contract.
Under Proplend’s terms and conditions, some loans may have this type of exit fee if repaid late and this is decided as part of the underwriting processing.
The charge is paid to Proplend and then split equally with investors.
This is separate to the early repayment charge on loans, which is paid to investors and Proplend then takes 10 per cent.
It is also different to the compulsory exit fee, which is all payable to Proplend.
“A loan not paid back on time exit fee is only payable if the loan isn’t redeemed at maturity,” Bartaby told Peer2Peer Finance News.
“We are trying to encourage borrowers to pay their loan back on time, if they don’t do it then the exit fee kicks in.
“It could be on any type of loan and depends on the underwriting.
“We engage with borrowers six months before a loan is due to encourage them to start thinking about repaying.”
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