Lending Works – An introduction

Introduction

Lending Works is on online P2P platform. They offer unsecured personal loans at competitive rates, financed by individual lenders (consumer 87.3%, institutional 12.7% as of December 2017). Lending Works launched in 2014 operating out of an office in London and their total loans now amount £85’000’000 to date.

Funds can be deposited either by debit card (1 day clearance) or bank transfer (2-3 days). There are two rates of return on the Lending Works platform, either 4% for 3 years or 5.5% up to 5 years (correct as of December 2017). The projected rates can change with a weeks notice at the desecration of Lending Works.

The minimum you can deposit at any one time is £10. Interest earned on your ‘On Loan’ balance is paid out on the last day of the month. This balance will either go in to the ‘Classic Wallet’ for withdrawal or ‘Offers’ for re-lending as per your instruction.

You will notice there is a residual balance in the ‘Classic Wallet’, in this case £0.09. This is because unlike some platforms you can not manually choose which individual loans to invest in, Lending Works dose it for you. So the loans are broken down in to microloan parts ( in the region of £0.85 ) so you are usually left with a few pennies waiting for further funds before being loaned out. One advantage of this is risk can be spread very wide, even with a relatively small balance. This insulates from most bad debts of defaults.

Lending Works also operates a provision fund that it calls the ‘Barrier’ to further insulate a lender from bad debts or defaults. This platform also operates a withdraw charge (on quick withdraws) of £20 or 0.6% of the balance, whichever is higher, designed to enforce stability of funds, this charge puts Lending Works straight in to the mid term investment prospect (2 – 5 years) before realising a profit. The only way to avoid this charge is to use the option to auto-withdraw monthly returns (for which there is no charge), this however means sacrificing compound growth.

The Lending Works dashboard

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The Lending Works dashboard

The dashboard for Lending Works is very simple to understand –

Classic Wallet – is the balance in your account unassigned to loans (this amount is available for withdrawal at any time).

Offers – is any balance you have instructed to lend out but has not yet been assigned to a loan. Loan assignments can take 5 to 10 working days depending on availability, and you do not earn interest on the offer balance.

On Loan – is the balance you have successfully lent out to borrowers. This balance is where the interest is earned.

Withdrawn – details all your withdrawals made from your account to date.

My repayments – shows the instruction you have given Lending Works regarding what to do with your repayments. You can either return them to your classic wallet for withdrawal or auto invest to maximise returns.

Referral Link for Lending Works

This link provides a referral bonus of £100 when a new customer signs up and invests £1000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

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