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Funding Circle Loans That Offer Cashback

Funding Circle is currently returning cashback to lenders, taken out of the borrowers' fees, in the following loan auctions:

A+, residential property development loan for 16 months in Cheshire

Offering 1.5% cashback. The auction will be over by 10am on Wednesday 10 December at the latest.

This is an 8% interest-rate loan, which will be 7% after Funding Circle fees and an estimated 6.4% after average bad debts. It's a fixed interest rate, so when the loan is fully funded it will close; you will not be able to bid lower to steal the loan part from another individual lender.

70% of this £200,000 loan has already been funded.

This is an interest-only loan, which means you'll receive interest payments monthly and your actual loan will be repaid at the end; since you don't receive partial repayments for your actual loan each month, you will get interest on the full amount without having to re-lend it (although you will need to re-lend the interest).

The loan is 53% loan-to-value (LTV), which means that the borrower is borrowing 53% of the property, giving lenders a buffer of 47% in case of default.

It is a first-charge loan, meaning that you and other Funding Circle lenders will be entitled to the first claim on the property if it becomes necessary to repossess and sell it. Funding Circle deals with late payers and repossessions on your behalf.

A+, residential property development loan for 18 months in Wiltshire

Offering 1.5% cashback. The auction will be finished on Friday at the latest.

This is another interest only, fixed-rate loan for 8%.

90% of the loan has already been funded by Funding Circle lenders out of £172,000.

The loan is 60% LTV and you have a first charge.

A+, commercial property mortgage for 35 months in Kent

Offering 1.5% cashback. The auction finishes in the morning on Monday week.

The interest rate is fixed at 8.5%. You will receive both interest payments and repayment of some of your original loan on a monthly basis, so you'll need to re-lend both.

Two-thirds of the loan is funded of 300,000. Finishes in the morning, Monday week, at the latest.

This is an 80% LTV mortgage with a first charge.

Cashback and interest rates

Cashback can be lent out again swiftly and it is not taxed. Thus, it is more valuable than adding 1.5% to the interest rate for shorter loans. However, for loans over several years this can reverse, because cashback is a one-off and annual interest is not.

Average annual interest for lending to A+ loans without cashback is currently between 6.2% and 6.7%, depending on how much of your money is not on loan and earning interest, which reduces your overall interest rate.

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