Find out everything you need to know about why and how to use LendingCrowd.
LendingCrowd helps to provide you with peace of mind through our Credit Team, who have vast experience of reviewing financial information. We ensure that all borrowers on the platform have passed robust identity and credit checks carried out through reputable suppliers.
For our Self Select accounts, the minimum is £20. For our Growth and Income accounts, it’s £1,000.
Any funds that are held as cash, in other words not lent out on the platform yet, are held in a separate client money bank account. These funds don’t form part of our assets.
If you choose to invest in our Growth Account, we’ll automatically invest your funds in loans available on our Loan Market, with rates that may range from 5.95% to 14.25%. The account automatically invests your repayments in more loans, increasing diversification over time. The 6% target return for the Growth Account is variable, net of ongoing repayment fees, estimated bad debt and before the 1% capital withdrawal fee.
If you have money in your account that you haven’t lent out, you can withdraw it by logging in and clicking on ‘Transfer Out’. The first time you withdraw funds, you’ll need to enter your bank details for us to verify. If you transferred in money by debit card, we’ll need you to email us a bank statement for the same account from within the last 3 months to enable us to verify the details for returning your money. If you transferred in money by bank transfer, we’ll already have your bank details to verify (provided the details you provide match the account that you transferred money from). Once we’ve verified your bank details, complete the amount you want to transfer. We’ll then return it to your bank account within 3 working days, or to your debit card in between 5 and 10 working days (as we use an external card payments provider, we can’t control how long this takes).
This is interest that’s due on a loan but not yet charged. Interest is usually applied each month around the time the loan repayment is received.
No. We currently only accept lender sign-ups from UK residents.
You need to:
- be UK resident
- have a UK bank account
- be at least 18 years old
During the sign-up process, you must supply a residential UK address as we don’t accept PO Box addresses. If you’re originally from outside the EU, you’ll also need to supply evidence of your UK resident status.
You can’t transfer your LendingCrowd loan holdings to anyone else. If a lender passes away, their loan holdings will become part of their estate and dealt with accordingly.
No. Under HM Revenue & Customs guidelines, you would have to sell your existing loan holdings on a public market and use the cash to buy qualifying loan holdings in an IFISA.
You can load funds into your LendingCrowd account by debit card or bank transfer. We don’t currently accept credit card transactions.
If you don’t add funds to your account within 12 months of completing your identity verification, your account will be closed. This is because we have a duty to only hold your data when we have a specific business need. If your account is closed after 12 months of inactivity, you’ll be able to reopen it at any time by completing the verification process again using your passport or driving licence.
The only name that we’ll share on our platform is your chosen username. Borrowers have the right to ask who has funded their loan, but we’ll only provide this information with your permission. We don’t make your personal details visible on the site. However, we may have to disclose them to meet our legal or regulatory obligations – we’ll tell you why if this happens.
Yes, we offer three Innovative Finance ISA products – the Growth IFISA, the Income IFISA and the Self Select IFISA – which allow you to contribute up to £20,000 in the current tax year and you’ll have no tax to pay on your returns. Please visit our IFISA page for more details. Tax treatment depends on the individual circumstances of each lender and may be subject to change in future.
We recognise the importance of reducing risk and increasing diversification in helping our lenders to achieve healthy and stable returns. This was our primary aim in launching AutoBalance and AutoQueue.
AutoBalance and AutoQueue only apply to our Growth Account and Income Account, including the Growth IFISA and Income IFISA. Please note that these features will only be activated on portfolios of £1,000 or more, as this is the minimum required for the Growth Account and Income Account. AutoBalance and AutoQueue are not available for our Self Select Account or Self Select ISA.
Our Growth Account has a target return of 4.9%, and our Income Account targets a return of 4.6%. AutoBalance and AutoQueue are designed to minimise risk by diversifying your portfolio. The aim is to have as many lenders as possible achieving the target rate or better. You may see increased buying and selling activity while accounts rebalance.
Nothing – AutoBalance and AutoQueue will be activated automatically on existing Growth Accounts and/or Income Accounts. If, for whatever reason, you do not want your portfolio to benefit from increased diversification and reduced exposure to individual loans, you will be able to opt out. If you are considering joining LendingCrowd as a new lender, these features will be enabled automatically on the Growth Account, Income Account, Growth IFISA and Income IFISA.
This will depend on the amount deposited and the availability of loans on our Loan Market. Your funds will be held as cash and deployed as loans become available. If insufficient loans are available on the Loan Market, you may experience a short delay in your funds being lent out, with the overall objective of ensuring a diverse allocation of risk within your account.
|Portfolio value||Maximum target exposure|
|£1,000 to £1,999||2%|
|£2,000 to £4,999||1%|
|£5,000 and above||0.5%|
Please note that the maximum target exposure is measured across each individual Growth Account/IFISA and Income Account/IFISA. It is not measured across a lender’s entire portfolio with LendingCrowd.
*£1,000 is the minimum required for the Growth Account and Income Account.
In our Loan Market, you can place bids to fund British business loans. All of the businesses available to bid on have been thoroughly assessed by our Credit Team and have met our stringent credit criteria. Each business loan has a Risk Band (A+ to C+) that corresponds to the minimum interest rate for that loan.
You can place bids on businesses in the Loan Market by choosing Bid Now, or you can choose to See More about the business and the loan it’s applying for.
If you choose Bid Now, you’ll be taken to the bid page, where you choose the amount you want to bid and the interest rate. The minimum bid you can place is £20, and the minimum and maximum interest rates depend on which risk band the loan is in.
If you choose See More, you’ll be taken to the loan details page, where you can see information about the company and its loan, and then select the ‘Bid Now’ tab to place a bid.
The minimum bid you can place is £20, and the maximum you can bid is £10,000.
You’ll be able to see the amount and interest rate you’ve bid at, alongside the number and total value of bids placed by other lenders at each different interest rate. Other lenders won’t be able to see your individual bids. Your bids could be accepted or rejected depending on whether other lenders place bids at lower rates once the loan is fully funded.
Your bid will be accepted once the borrower accepts the loan offer, which can happen either when the loan is fully funded, or after the end of the loan auction period.
If the loan becomes fully funded before the end of the auction period, the borrower may choose to keep the auction open. If this happens, bids at higher interest rates may be ‘knocked out’ if another lender places a bid at a lower rate.
You can place as many bids on the loan as you want, so long as you have enough funds in your account.
Once you’ve placed a bid, it’s final. Bids can’t be modified, so please take care when you’re bidding.
You can see the Company Overview (including what the business does and what the loan is for), the business’ most recent credit scores, its Financial Summary, the Q&A where the borrower answers lender questions, the Current Bids that have been placed in the auction, and a repayment schedule.
When a loan auction is live, lenders can ask questions to borrowers about the business and the loan. Please go to the Questions & Answers tab in the loan details page to ask the borrower a question. When the borrower answers the question, the asking lender will receive an email containing the borrower’s response, as well as being able to see the response on the loan details page.
The Risk Band assigned to each loan is based on our Credit Team’s assessment of the business. The bands range from A+ (lower risk loans) to C+ (acceptable risk loans). Each Risk Band corresponds to a minimum interest rate, as shown below:
As an example, the minimum interest rate on a B+ Risk Band loan will be 8.95%. The maximum bid for each Risk Band is 2% above the minimum.
The length of time that a loan is in the Loan Market section of the website will vary. The auction end date is clearly displayed on each loan.
When a loan in the Loan Market is fully funded, the borrower has a choice: they can either accept the loan and the rate as it currently is, or they can wait until the end of the loan’s auction period to allow the loan interest rate to potentially fall. The borrower could also decline the loan at this point. If this happens, your funds will be returned to your account.
The borrower must accept the fully funded loan before it can be finalised. Once the loan has been finalised, and the borrower has returned the necessary paperwork, the loan funds will be paid to the borrower and the monthly repayment dates will be set. Interest then starts accruing.
You can choose to buy partial or whole loan parts that are listed on the Loan Market. First choose the business loan, then enter the amount you want to buy, from a minimum of £20 up to the entire available value.
When you buy a loan part, you take on the repayments from that loan and the 1% ongoing repayment fee.
How much of an available loan part you buy is up to you. The minimum purchase is £20, up to the entire available value. Just enter the amount you want to buy.
The Loan Market displays a single indicative interest rate that’s a weighted average of all the loan parts available for sale.
If you buy a loan part midway through a repayment cycle, both you and the seller will receive partial capital and interest payments. The seller will receive the returns relevant up until the date of the loan part sale, and you will receive those after the date of sale.
When you decide to lend through the Loan Market, you buy parts of the loans from other lenders. LendingCrowd guarantees that a lender is never left with a part of the loan that’s too small and would therefore be difficult to manage. That’s why we may adjust the amount if the selling lenders are left with a loan part that’s worth less than £20.
The interest rate listed for each loan on the Loan Market is indicative of the weighted average interest rate of all the parts available for that loan. When you enter the amount you want to lend, the currently available interest rate for the amount you’ve chosen is displayed. This may be higher or lower than the rate available for the amount you’ve chosen. This could be because another lender has bought a part of the same loan, or because a lender has listed or unlisted a loan part.
The Loan Market offers you the opportunity to buy loan parts that you might have missed when they were first listed for auction. It allows you to take control of your portfolio and continue to choose where your money is going, based on the businesses you want to support.
Buying parts on the Loan Market can also help you to further diversify your LendingCrowd portfolio across more loans to help spread risk.
We don’t charge you any fees for buying parts on the Loan Market. However, with a purchase, you take on the 1% ongoing repayment fee.
The amounts and rates shown on the Loan Market take into account all of the parts available in a particular loan at the current time. If you’re looking at the Loan Market before you sign in, you’ll see information for all of the currently available loan parts. However, after you’ve logged in to your account, the loan parts that you currently have up for sale on the Loan Market won’t be shown, as you can’t buy loan parts you already own. This may mean that the amounts and rates you saw before logging in may be slightly different.
We offer a secondary marketplace where LendingCrowd lenders can buy and sell their loan parts. You can list a loan part for sale via the Manage function in your account. Other lenders can buy some or all of your listed loan part and take on the repayment benefits and the 1% fee associated with that loan.
In your account, use the Manage function to view your existing loan parts. Next to the loan you want to sell, slide the bar to ‘list’ or ‘unlist’ a loan part.
When a loan part is listed, it’s shown for sale on our Loan Market for other lenders to buy. All loan parts are listed at the interest rate at which you initially bought them. Each loan will have a single interest rate displayed on the Loan Market, which is a weighted average interest rate of all the parts in that loan that are currently available.
We charge a 0.5% fee of the value of loan parts sold on the Loan Market.
If you change your mind before your loan part sells, simply slide the bar to ‘unlist’ and return it to your LendingCrowd portfolio.
You can list your loan holdings for sale on our Loan Market at any time. Please remember that the time taken to access your funds depends on how quickly your holdings are sold. The ability to sell depends on other lenders buying your loans.
Please also note that you can’t list loans for some borrowers if:
- the borrower’s repayments are overdue
- the borrower has indicated to us that they’ll repay the loan early
- there’s only one repayment left for the term of the loan
- the borrower is (at our discretion) likely to miss future repayments
If a loan part is valued at more than £100, you can split it to create a new loan part that you will be able to list for sale. You cannot split a loan part of £100 or less, so this would have to be sold in full.
There are no restrictions on how long you have to wait before you can list a loan part for sale on the Loan Market. Although it’s unlikely that you would choose to do so immediately, that’s up to you.
You may choose to sell a loan part to allow you to free up capital to lend to other businesses, or withdraw from your LendingCrowd account. If you change your mind before your loan part has been sold, simply unlist it to add it back to your LendingCrowd portfolio.
Lenders are charged a fee of 0.5% of the loan part capital value sold. This fee is automatically deducted from the value of the sale. You’ll receive an email after the sale showing the value of the loan part sold, the fee amount, and your net earnings. Your statement will show the net earnings.
Loan parts that you choose to list for sale on the Loan Market will remain listed for sale until they’re bought by another lender, or until there are only 2 repayments remaining, whichever event takes place first.
The Innovative Finance ISA (IFISA) lets lenders include their peer-to-peer loans in an ISA. This means there’s no tax to pay on your returns. It’s subject to the same rules on eligibility and contribution limits as other types of ISA. Please note that tax treatment depends on the individual circumstances of each lender and may be subject to change in future.
These accounts are the tax-efficient way to hold our Growth Account, Income Account and Self Select Account. Tax treatment depends on the individual circumstances of each lender and may be subject to change in future.
Within a LendingCrowd IFISA, you don’t pay tax on interest earned from peer-to-peer loans. Please note that tax treatment depends on the individual circumstances of each lender and may be subject to change in future.
Yes. To get this process started, download and complete our ISA transfer form and post it to us. We’ll take care of the entire transfer process.
Following the correct transfer process ensures your ISA maintains its tax-free status. Tax treatment depends on the individual circumstances of each lender and may be subject to change in future.
For the current tax year, you can contribute a maximum of £20,000 to ISAs.
You can lend as much as you want with LendingCrowd, but you have to adhere to the ISA allowance within the LendingCrowd IFISA.
If you’ve subscribed to the maximum amount in your LendingCrowd IFISA (£20,000 for the current tax year) and want to lend more, you can do so via our Growth Account, Income Account or Self Select Account.
We prevent you from contributing more than the ISA allowance to your LendingCrowd IFISA. However, if you have more than one ISA provider, it’s up to you to make sure you don’t exceed the ISA allowance across all your accounts. If you do exceed that total, HM Revenue & Customs will tell you and your ISA provider about any action that needs to be taken.
Yes, the LendingCrowd IFISA has been designed as a Flexible ISA. This means that you can withdraw cash and then add it back to your LendingCrowd IFISA during the same tax year without reducing your current year’s allowance.
It’s quick and easy to open a LendingCrowd IFISA once you’re registered with us.
Log into your account, go to the My Accounts page, click ‘Open new accounts’ and then select the IFISA account you’d like to open. We’ll already have your details, so all you’d have to do is tell us your National Insurance number and accept the ISA declaration and terms.
The LendingCrowd Growth IFISA has a target rate of 4.9%* per year, the LendingCrowd Income IFISA has a target rate of 4.6%* per year and rates for the Self Select IFISA start from 5.95%**.
*Capital at risk. Target rate is variable, net of ongoing repayment fees and bad debt.
**Capital at risk. Lend at rates between 5.95% and 14.25% based on LendingCrowd’s Risk Bands. Interest rates are guided by the credit grading allocated to each loan. Higher-risk loans may yield greater returns but can also lead to lower returns if the business can’t fully repay its debts. This is known as bad debt. Find out more at our Risk Matters page.
No. The rate of return depends on the performance of the loans in your portfolio. When lending to businesses, it’s important to remember that your capital is at risk.
There is a risk that the value of your loan holdings could fall. The main risk is that the companies who borrow money fail to make their repayments. We have a rigorous credit-screening process so that we fully understand the risk exposure for each borrower.
Yes, but you can only contribute to one IFISA in any single tax year. This means you could open one IFISA this year and in future years open additional IFISAs.
In a single tax year, you can open and contribute to one Cash ISA, one Stocks & Shares ISA, one Lifetime ISA and one IFISA. The total you pay in must not exceed £20,000 for the current tax year.
Anyone who is at least 18 years old and is resident in the UK. You can also apply if you’re a Crown employee (such as a member of the armed forces or civil servant) serving abroad, or the partner of a Crown employee. You don’t need to be a taxpayer to have an ISA but you must have a National Insurance number.
No. Your ISA earnings are exempt from tax and there’s no need to declare them, provided you meet the ISA rules. Our tax statement excludes your earnings within your ISA. Tax treatment depends on the individual circumstances of each lender and may be subject to change in future.
Simply go to the withdrawal section of the Manage page and change your Cash Reserve target to the amount you’d like to withdraw. Some of your loans will be sold to reach this target amount, and you can then transfer the cash to your Self Select Account to withdraw it. Please note there’s a withdrawal fee of 1% of the capital withdrawn from the Growth IFISA or Income IFISA.
LendingCrowd oversees this entire process on your behalf and we’ll automatically seek buyers for your loans on the Loan Market. We’ll do this as quickly as possible but please note that the ability to sell depends on other lenders buying your loans. However, repayments from the loans you hold will also be set aside and contribute to your requested withdrawal amount.
You can’t list non-performing loans (those that are overdue, in arrears or marked as a default) for sale until they’re performing.
You first have to list the loans you want to sell. Listing loans for sale will place them on the Loan Market for other lenders to buy.
The ability to sell your individual loans depends on other lenders buying them. You still earn interest while the loan is on the Loan Market and money due to you will be paid at the end of the month when the borrower makes a repayment. Once your loans have sold, you can transfer the cash to your Self Select Account to withdraw it, or hold it in your Self Select IFISA to transfer to another provider.
You can’t list non-performing loans (those that are overdue, in arrears or marked as a default) for sale until they’re performing.
First you’ll need to list and sell your loan holdings on our Loan Market to return them to cash. Once other lenders have bought your loan holdings, you can transfer out the cash value of your IFISA. You should contact your new ISA provider to arrange this.
There’s no withdrawal fee with the Self Select IFISA, but selling a loan carries a 0.5% fee.
The withdrawal fee for the Growth IFISA and Income IFISA is 1% of the capital being withdrawn.
No, you can’t offset losses on loan parts held within an IFISA against other chargeable gains made on loan parts held outside it.
No, peer-to-peer lending isn’t the same as having a bank or building society account and isn’t covered by the Financial Services Compensation Scheme.
We pay returns on your loan holdings without deducting any tax. It’s your responsibility to declare any interest and gains earned outside one of our Innovative Finance ISA products to HM Revenue & Customs on a self-assessment tax return, or tell your local tax office. We provide all our lenders with an income statement for tax return purposes. Download yours from the ‘Summary’ section of your account.
Diversifying your lending helps to manage the risk to you by reducing the overall impact of debt on your portfolio if a business is not fully able to repay its loan. If a business stops repaying its loan, we will take the necessary steps to recover the maximum amount possible, but a recovery cannot always be achieved, in which case the value of the loan could go down.
It is important that you read the information about the risk involved in LendingCrowd loans and how to manage this risk carefully before you lend and seek advice from a qualified adviser if necessary.
If LendingCrowd was unable to operate the service, lenders would still continue to receive repayments on loans originated with LendingCrowd, because all loan contracts are between borrowers and lenders and would remain valid. Under Financial Conduct Authority rules, peer-to-peer platforms must appoint a third-party standby servicing company to administer the loan book in the event of the platform ceasing operation.
We have appointed a standby servicing company to oversee the repayment of loans should this situation arise. The standby servicing company is also an ISA manager and would continue to administer loan holdings held in a LendingCrowd IFISA. All lender funds are held in a separate client money bank account and don’t form part of LendingCrowd’s assets.
We take a number of factors into account to determine our credit decisions, and you can find more detail in this blog post. In short, we look at cashflow, management ability, a business plan and the industry the business is in.
The credit scores shown for each loan are supplied by a third-party credit reference agency. They’re independent of the Risk Bands assigned by our Credit Team, who consult the company and consumer reports from credit reference agencies to form part of their assessment.
Our Credit Team assign the Risk Bands for each loan, based on their assessment of the loan using their experience, our in-house credit assessment tool and affordability models. Each Risk Band corresponds to a minimum interest rate, listed below:
We take debentures or bond and floating charges over the company, or third-party guarantees where appropriate. We decide security arrangements on a case-by-case basis.
If a repayment is late, we’ll contact the borrower as soon as possible to establish the reason for this and when we can expect payment. If we don’t receive the payment within 4 days of the due date, we consider the repayment to be overdue and will charge the borrower a late payment fee. We’ll also inform credit reference agencies that the borrower has missed a payment. This could affect the business’ and the director’s credit ratings and therefore their ability to borrow more money.
If the borrower hasn’t paid within 45 days of the repayment date, we’ll consider the loan to be in arrears.
When a borrower can no longer meet their repayment schedule nor pay the outstanding loan, we’ll declare the loan as a default. We’ll identify the outstanding capital as a bad debt. This happens after 90 days – this is a standard adopted in December 2019. For accounts held outside an ISA, lenders can declare bad debts against earnings on their tax statement.
If a loan is declared a default and there’s no clear indication of how and when we’ll receive the payment, we’ll take recovery action. This will include referring the matter to our panel of experts – which includes solicitors, accountants and debt collectors – who’ll provide guidance or act on our behalf, whichever is the most appropriate course of action. Our loans have various types of creditor protection in place, so our recoveries process can involve forcing the sale of assets through a legal process, which can take time.
Read more about our default process.