Compare P2P lending accounts and IFISAs now

Lending Works Interest Rates: Up Yet Again

Click "Learn" to get help

By on 20 July, 2015 | Read more by this author

This article is updated as and when Lending Works changes its rates. Last updated on 20 July 2015.

Lending Works* interest rates don't change often, but it can be worth paying attention when they do.

Today, the “super prime” personal loans P2P lending website has increased its interest rate in the five-year market from 6.4% to 6.6%. The three-year deal stays the same at 5.1%.

These are the rates after fees and expected bad debts – which are intended to be covered by a bad-debt provision fund, as well as insurance to cover losses from borrowers who can't pay due to accident or unemployment.

How Lending Works interest rates compare

Lending Works is currently about the same or slightly less than RateSetter* over three years, and ahead of other P2P lending websites with three-year deals that position themselves as low risk, including Landbay*, Wellesley* and Zopa*.

At 6.6% over five years, Lending Works is ahead of the crowd. RateSetter is the next highest paying, but currently its rates are staying doggedly below 6%. To see more on how Lending Works now compares to others, go to Safest Peer-to-Peer vs Savings Accounts.

Why the increase?

Lending Works sets interest rates for us lenders. Perhaps this increase was to compensate for Lending Works' first bad debts? But probably not.

More likely it is market forces: the balance of demand from borrowers and supply from lenders. This is the prime factor that controls the interest rates, regardless of whether the P2P lending website sets the rates or lenders do themselves.

Lending Works changes its rates irregularly. It has only done so a small number of times since it started back in January 2014.

If your money sits around idly

It can take days, or even weeks, to get your money out on loan, since it has to be allocated to borrowers. A three-week wait will effectively reduce the interest you earn in a year by a few tenths of a percentage point. That's because you won't earn 6.6% for the full year, but for three weeks less.

You will also receive loan repayments that will need to be re-lent, although Lending Works will do that automatically for you, if you want. You can read about Lending Works' automation options in Get A Regular Income From Lending Works.

However, an increase in the rate suggests – but doesn't promise – that Lending Works* is looking to get more lenders on board. This could mean that currently it's relatively easy to get your money lent out quickly.

More: to read about the risks and rewards of Lending Works and similar P2P lending websites, visit Get Started With the Safest Peer-to-Peer Lending Websites.

*Commission: our service is free to you. All P2P lending companies will be included in our fair and accurate comparison tables once we have finished adding them all. We receive compensation from all the companies mentioned in this article for providing you with their 4thWay® Risk Ratings and 4thWay® Insight Reports for free, and then we’re paid when you click through from us and open accounts with them. This doesn't affect our editorial independence. Learn How we earn money fairly with your help.

Leave a Reply

Your email address will not be published. Required fields are marked *

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