On Wednesday, Lending Works announced as of Monday, it five-year lender rate has increased to 5.5%, which is considered the highest level it has reached since August 2016. The company revealed that the reason for the rate increase is due to the fact that it has more lenders on its platform than ever and the lenders, on average, are also funding more into their Lending Works account than ever before.
“For the past 24 months, we have focused intensively on two things: making our software better so customers are more likely to use Lending Works, and integrating with more partners through which customers can access our platform. As a result, we are approving vastly greater volumes of loans for creditworthy customers each day. The nature of a platform like ours is such that the challenge of balancing the supply of lender capital with demand for loans from borrowers is an ongoing one, and fluctuations in rates tend to be indicative of the status quo of this equilibrium. We expect to issue over £5 million in loans this month for the first time ever. And, with a number of new partnerships set to launch in the coming months, we expect that figure to double to £10 million per month by mid-2018.”
Lending Works also noted:
“However, in order for us to break new ground in this manner, we need a little bit of help from investors like you. Fortunately, the gains are mutually beneficial. Not only will you reap the rewards of our tremendous five-year returns, but your money will also be matched with creditworthy borrowers in just a few days (given the current shorter lending queue), so your money will start working for you almost immediately – and enable you to stay one step ahead of inflation (currently 2.9%). Of course, it’s important to remember that peer-to-peer lending is not a savings product. Capital is at risk, and not protected by the Financial Services Compensation Scheme. In order to help mitigate these risks, we developed the Lending Works Shield; a threefold lender protection model which includes a unique insurance that covers some of the key reasons for borrowers defaulting, and a reserve fund to cover missed loan repayments.”
The lending platform then claimed that there really has never been a better time to lend money through its site.