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Loanpad Review

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By on 26 March, 2019 | Read more by this author

Here's the Loanpad review from one of 4thWay's experts:

4thWay's Quick Expert Loanpad Review

Auto-spread your money across loans backed by property 2-3 times greater than the loan size

When did Loanpad start?

Established in 2018, lenders have lent around £2 million.

What interesting or unique points does Loanpad have?

Loanpad* partners with a family firm that's done development lending for 40 years. Lenders through Loanpad buy the safest slice of the loans, so that the property's must fall by 55%-65% of the initial valuation before lenders can lose any money. The family firm keeps the riskier part of every loan, taking the first loss above yours of approximately 33%. That's massive.

How good are its loans?

The biggest loan has been for just 46% of the initial value of the property or development site, and the average has been 35%. The intention is to improve on that already astounding figure.

When measuring the loan size against the hoped-for sale price of developments, the loan is just 22%, which is more than three times better than (i.e one-third the size of) a typical development loan on this measure.

No other P2P lending site offers security cover this good across every loan on its books.

How much experience do Loanpad's key people have?

Loanpad's key decision maker was a property lawyer who built up lending contacts, such as this family firm. His property-law experience covers the whole range, which you don't usually get in-house in P2P lending.

On lending experience, the key decision maker worked as CEO of a property lender for two years. This is less experience than I would usually want to see, but it is absolutely acceptable with these loans, where the partner lenders taking a large chunk of skin in the game along with the riskiest loan slices.

Loanpad review: lending processes

Loanpad's role is to assess the partner lenders and take the lowest-risk chunk from them. The idea is that partner lenders will choose borrowers more carefully than a loan broker, due to their skin in the game.

In assessing loans, Loanpad considers top-quality property security to be paramount. Loanpad emphasises getting loans on properties that will be easy to sell, such as two-bedroom flats in a town centre as opposed to farms.

Any checks on borrowers are focused on trustworthiness, with financial and credit checks being part of that.

How good are Loanpad's interest rates, bad debts and margin of safety?

Loanpad pays 4.0%-5.0%, depending on how quickly you'd like access to your money. It hasn't had any bad debts, but it's early days. That said, for any one loan to cause a loss, something really extraordinary would have to happen. It's realistic for lenders to expect to make money with Loanpad* in all market conditions, including a severe recession and major property crash.

Has Loanpad provided enough information to assess the risks?

Loanpad has been very open with us, providing the great volume of data, facts and personal access we need to assess it on an ongoing basis.

Is Loanpad profitable?

Loanpad expects to be profitable by the autumn. It has a large pipeline of loans to grow with, as it attracts more lenders. We have no figures, but I believe it could very quickly have a sustainable business, if it contains its costs this year.

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

The minimum lending amount is £10, which is spread across all live loans and redistributed daily as new loans are made. I believe lenders will be sufficiently diversified across enough loans almost immediately, even bearing in mind the currently low volume of loans.

Does Loanpad have an IFISA?

Loanpad's lending accounts are available as IFISAs.

Visit Loanpad*.

Loanpad: key details of its Premium Account

4thWay PLUS Rating
4thWay PLUS Rating0.5
Interest rate after bad debt
5.0%

Here we show the P2P lending site's own estimate
(or 4thWay's if theirs are not appropriate)

4thWay Risk Score
N/A

Description: £2m in development property lending & short-term property (bridging) loans under 50% LTV against initial property valuation since 2018, with interest reserve fund, auto-lend, auto-diversification & free early access in 60 days. IFISA available

Minimum lending amount
£10
Exit fees - if you sell loans before borrowers fully repay
No with 60 days notice; otherwise 1%

Early exit is not guaranteed. Usually, other lenders need to buy your loans

Do you get all your money back if you exit early?

Yes

Loan size compared to security value
35.34% (avg) and 50% (max); or 21.97% (avg) 45% (max) of future property value
Reserve fund size as % of outstanding loans
N/A, but there is an interest reserve fund worth around 1% of outstanding loans
Company/directors lend alongside you/first loss
No, but partner lenders take first loss of around 33%
Loanpad Quick Expert Review: auto-spread your money across loans backed by property 2-3 times greater than the loan size

Established in 2018, lenders have lent around £2 million. Loanpad* partners with a family firm that's…

Read the full review here

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.

Experts, journalists and bloggers 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 Loanpad 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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Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

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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

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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.

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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 “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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