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LendingCrowd Review

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By on 29 April, 2019 | Read more by this author

What Are IFISAs? Read the Guide4thWay's LendingCrowd Review: with Business loans P2P site LendingCrowd*, you can select loans yourself to earn higher interest.

Alternatively, you can split your money automatically between at least 20 loans – and no more than 5% of your money in any loan.

Target interest rates are currently around 6% with automatic diversification or above 7% if you select loans yourself, although in practice lenders have been earning around 8% in all LendingCrowd's lending accounts.

Here is our experts‘ LendingCrowd Quick Expert Review. (You can find all our experts' reviews in our comparison tables.)

LendingCrowd Logo, used in 4thWay's LendingCrowd review4thWay's Quick Expert LendingCrowd Review

Good results from a unique opportunity

LendingCrowd Review: their best-rated product

LendingCrowd review: excellent PLUS rating for Self-Select Account.

LendingCrowd's Self-Select Account received an Excellent 2/3 4thWay PLUS rating

This account has been paying 7.30% interest after bad debts.

Read about the 4thWay PLUS Ratings, compare more peer-to-peer lending accounts or visit LendingCrowd*.

When did LendingCrowd start?

LendingCrowd has been growing slow but steady since 2014 and has done £72 million in loans.

What interesting or unique points does LendingCrowd have?

For those looking to diversify their risks by lending in different kinds of loans and different parts of the country, LendingCrowd has a number of unique points. It is the only peer-to-peer lending website to focus on lending to small businesses in Scotland, it's the only unsecured business lending site that provides the full details necessary for a detailed analysis of its performance, and it is the only unsecured business lending site that allows you to choose individual loans for yourself, if you want to.

How good are its loans?

LendingCrowd’s results in terms of late loans and bad debts are in line with typical small business lending. It still needs a bit more time to mature, but its interest rates currently look good to us for the risks involved.

Its lending accounts all have the second top 4thWay PLUS Rating. If we rated the loans that LendingCrowd grades as A+ and A separately from the rest, those loans would receive the top 4thWay PLUS Rating of 3/3. In the current economic environment, I would particularly want to put more money in the lower-risk, lower-rate loans over its other loans.

How much experience do LendingCrowd's key people have?

I believe the key people behind LendingCrowd have a lot of directly relevant experience in the key area of approving small business loans. The lead decision maker in particular has had a directly relevant senior role at a major bank.

LendingCrowd review: lending processes

I am pleased to see that a major focus in selecting business borrowers is to try to ensure that borrowers have plenty of cash coming in to cover the loan repayments, which is highly appropriate for these kinds of loans.

Specifically, businesses borrowing through LendingCrowd can typically cover the monthly loan repayments at least 1.5 times over, going up to nine times over for LendingCrowd's A+ loans. In addition, we know that LendingCrowd conducts at least some of the risk modelling that we really like to see for business loans.

Has LendingCrowd provided enough information to assess the risks?

LendingCrowd* is transparent and upfront, providing answers to almost all of our questions and a lot of detailed data to back it up.

Is LendingCrowd profitable?

LendingCrowd is not yet profitable, but, in early 2019, LendingCrowd received £6 million in investment, up from an initial investment of £2 million in 2018. This is highly reassuring and greatly extends LendingCrowd's runway to aid its growth.

What is LendingCrowd's minimum lending amount and how many loans can I lend in?

For these kinds of business loans, you normally need to lend in around 180 or more loans to contain the risks. LendingCrowd is approving around 20 loans a month, so you could build a decent loan portfolio by dripping your money in over a year or by re-lending the monthly repayments in new loans.

The minimum you can lend is £20 if you choose loans yourself, making it easy to choose enough loans to spread the risks. The minimum is £1,000 if you choose for your money to be automatically spread across loans. In this case, you can expect to be spread across just 20 loans to begin with, although this will rise rapidly if you re-lend repayments you receive.

Does LendingCrowd have an IFISA?

LendingCrowd's lending products are available as IFISAs.

LendingCrowd currently has a modest cashback deal running if you transfer in £5,000 from another ISA. More here.

Visit LendingCrowd* and read our IFISA Guide.

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.

The 4thWay® PLUS Ratings are calculations developed by professional risk modellers (someone who models risks for the banks), experienced investors and a debt specialist from one of the major consultancy firms. They measure the interest you earn against the risk of suffering losses from borrowers being unable to repay their loans in scenarios up to a serious recession and a major property crash. They assume you spread your money across hundreds or thousands of loans, and continue lending until all your loans are repaid. They assume you lend across 6-12 rated P2P lending accounts or IFISAs, and measure your overall performance across all of them, not against individual performances.

The 4thWay PLUS Ratings are calculated using objective criteria that can be measured and improved on over time, although no rating system is perfect. Read more about the 4thWay® PLUS Ratings.

*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 LendingCrowd 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.

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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.
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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.

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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

×
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