Loanpad launches first hybrid peer to peer lending platform
Loanpad has announced the UK launch of a unique prime peer-to-peer (P2P) lending platform. Fully authorised and regulated by the Financial Conduct Authority (FCA), Loanpad gives investors the operational simplicity and control of an online account in one easy-to-use online lending platform that’s built for lower-risk property loans.
The Loanpad lending model is the first of its kind in this sector to offer investors the chance to share loans with established property lenders (lending partners). The lending partners take on the higher risk part of each loan for a higher rate of interest; Investors receive the safer senior part and are shielded from much of the risk. Investors’ money is then spread evenly every day across a portfolio of secured property loans to ensure diversification.
Targeting investors looking to diversify an investment portfolio, or an everyday saver looking for other ways to grow their money, Loanpad focuses on making lower-risk secured lending accessible to smaller investors.
Describing the platform’s unique lending model, Louis Schwartz, pictured, Loanpad’s Founder and CEO said:
“We wanted our model to give everyday investors access to a premier lending experience. By partnering with lending partners who originate our loans, we’re able to offer greater security than a typical property loan. As a Loanpad investor, you only fund the lower-risk senior part of the loan, while the lending partners fund the junior part and retain the first loss position. So if a loan goes bad, their investment suffers a complete loss before investors are affected.”
“Every aspect of the model is laser focused on protecting our investors’ money as much as we can. We only take on carefully vetted lower-risk property loans, originated by experienced lending partners; investments are diversified across our entire portfolio of loans which helps reduce the impact of any one borrower defaulting; interest is paid daily and access to money is free every day with our Classic account*. Of course, no lending account is completely risk-free, but Loanpad is built to keep the risk to people’s money as low as possible.”
Investors will be able to choose from two different accounts: the Classic account gives investors daily access to their money for free, and the Premium account offers a higher interest rate, with a 60-day notice period for free withdrawals or a small charge for early access. The minimum investment for either account is £10 with a maximum balance of £20,000 in the Classic account and £250,000 in the Premium account. The interest rates on the Classic and Premium accounts are variable and will be updated on the platform in real time.
Loanpad also offers a flexible innovative finance ISA, a new type of ISA which allows investors using P2P lending platforms to receive tax-free interest. The Classic and Premium accounts are both ISA eligible; investors can put in up to £20,000 per year and/or transfer funds from an existing ISA.
Loanpad was founded by Louis Schwartz, an experienced lawyer who has specialised in real estate finance since 2007.