Compare P2P lending accounts and IFISAs now

Does Landbay’s £1 Billion Deal Affect You?

Click "Learn" to get help

By on 15 July, 2019 | Read more by this author

Landbay has just announced that a “major financial institution” will lend another £1 billion through it. Landbay has previously arranged over £300 million in loans, with most of that coming from regular lenders.

I asked Landbay* some of the key questions that our experts at 4thWay use when gathering information about institutional lending.

Here is the Q&A:

Q: What is the name of the institution?

A: Unfortunately, we cannot disclose the name of the major financial institution.

Q: Over what time period are you targeted/roughly expected to have lent the full billion by?

A: We would expect to deploy these funds over the next three-year period, and can renew the agreement subsequently with mutual agreement.

Q: Will the institution lend in loans with precisely the same characteristics and criteria as P2P lenders?

A: We have a single product set which can be seen on our site. [Loans through] our institutional funding partners and [individual lenders] are [approved using] the same criteria.

Q: Can you tell me anything about the interest rates the institution will be earning?

A: Institutional funders receive the interest rate for the individual loans and are charged servicing and performance fees by Landbay. I cannot disclose these fees for commercial reasons.

Q: When it comes to loans that meet the same criteria you use for P2P loans, how are the loans allocated to the institution or to P2P lenders?

A: Landbay has a carve out [for individual lenders] with all of our institutional funders enabling us to allocate loans to [individual lenders] whenever there are funds available for investment. As such the allocation is randomised based on demand.

Q: Does the institution get to review and turn down individual loans?

If a loan does not meet our criteria it is simply declined – there is no concept of selection or reallocation between [individual lenders] and institutional.

Q: Do you expect your lending criteria for P2P loans to change in any way as a result of the higher number of loans you will be approving?

Landbay’s lending criteria for both P2P and institutional loans will continue to evolve but not specifically related to the higher volumes that we will see from this funding. We are in a growing segment of the market…Landbay has maintained default rates of 0%, showing our commitment to lending quality during a time of scale and we are focused on maintaining this track record.

The bottom line?

It looks like there's no cherry picking the best loans for institutions, since they get loans allocated like anyone else.

The scale of lending can impact quality, but £1 billion over about three years is little compared to the overall market for these loans. I think this lending will be of no impact to individual lenders, except perhaps to offer a little reassurance that a “major” institution is trusting Landbay.

Read more:

Which Peer-To-Peer Lending Sites Have Institutional Lending?

Is Institutional Lending In Peer-To-Peer Good For You?

Visit Landbay*.

Independent opinion: the opinions expressed are those of the author and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA, and does not provide personalised advice. The material is for general information and education purposes only and not intended to incite you to lend.

All the experts and journalists who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.

*Commission and impartial research: our service is free to you. We already show dozens of P2P lending companies in our accurate comparison tables and we keep adding more as soon as they provide us with enough details. We receive compensation from Landbay and other P2P lending companies not mentioned above when you click through from our website and open accounts with them. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.

Comments are closed.

Today’s average interest rates

What is the “4thWay”?

There's the savings way, the property way, the stock-market way, and now there's the peer-to-peer lending way. The 4thWay® to save and invest.
Learn more.

What does 4thWay do?

We help people save and make more money, more safely when they cut out the banks and lend directly to other people and to businesses.

Why use 4thWay?

4thWay® is shaped by investors, bank risk modellers and a senior debt specialist, and we're governed by our users to ensure our comparison services and research are trustworthy and complete.

Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×

Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×

Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×

Why are Orchard’s interest rates different?

Orchard’s lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Orchard’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Got it

×

Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×
Back to top