While incredibly low interest rates have been great news for borrowers, prudent savers have been left counting the cost of rectifying the country's economic problems. Inflation has been significantly higher than the rates of interest being offered by high street savings accounts for several years now, and that is a situation that will shrink your capital over time in real terms. If you are in that position, it may be time to consider an alternative to traditional savings accounts – peer-to-peer lending with Lending Works.
Whilst the level of interest in this form of investment has risen significantly in recent years, for many there is still an element of the unknown surrounding peer-to-peer services. However, Lending Works has put in place a number of protective features to allay those fears – proving that it is a credible and potentially lucrative alternative to traditional savings accounts.
All Loan Applications are Comprehensively Underwritten
If you have any concerns about lending your hard-earned capital to anonymous borrowers, Lending Works has a series of strict protective measures in place that should put your mind at rest. Firstly, all loan applicants are subjected to a thorough credit checking process using Equifax, a leading credit referencing agency. Each applicant's credit file will be reviewed against Lending Works' strict credit criteria which ensures that only the most creditworthy borrowers are approved. Previous issues in managing credit will preclude applicants from having their loans approved.
Anyone looking to borrow money via Lending Works will need to provide evidence of their monthly expenditure and income. This information is mandatory, and it helps the underwriters to ascertain the applicant's ability to keep up with the monthly repayments. Applicants are also required to submit to sophisticated identity checks and anti-fraud checks against the CIFAS register.
The Lending Works Shield Offers Unrivalled Protection for Your Capital
Protecting lenders' funds is Lending Works' highest priority. The Lending Works Shield consists of a reserve fund, which is designed to cover any missed payments or defaults, and a series of insurance policies which protect against borrower defaults, fraud and cybercrime.
Part of the fee paid by each borrower is transferred to the reserve fund, which is maintained at a level in excess of the company's expected default rate. This ensures that should a borrower miss a payment or default on their loan, those lenders receive their expected repayments.
However, we all know that past performance does not always predict the future, and macroeconomic events could lead to a widespread rise in default rates. The Shield's default insurance, which is an industry first, provides protection up to an overall 10% default rate. To put this into context, default rates experienced by banks and peer-to-peer lenders throughout the recent financial crisis, one of the worst recessions experienced in the UK, were not even close to this level. This level of protection should provide sufficient assurance to lenders whilst still ensuring that they can enjoy the fantastic rates associated with peer-to-peer lending.
Your Funds Are Kept Separate from Those of Lending Works
Lending Works has been way ahead of statutory regulations imposed by the Financial Conduct Authority (FCA), in that all funds contributed by lenders are held in a ring-fenced trust, segregated from the day-to-day operations of the company. This ensures that in the unlikely event of the failure of the company, these lending funds can be returned to lenders.
In addition, Lending Works has an agreement with a back-up services provider which ensures that an orderly run-off of the company's loan book would be carried out in the event that Lending Works no longer existed. This ensures that lenders would continue to receive their expected repayments on existing loans.
Why Choose Lending Works?
Interest rates are widely expected to remain at all-time lows for some time, putting your savings and economic future in doubt. Lending your capital with the help of Lending Works can provide you with a return that is simply impossible to achieve from traditional products offered by banks.
Lending Works keeps your money working on a continual basis, so you can maximise your returns. You can top up your account if you feel you want to invest more, and you even have the opportunity to withdraw from a loan agreement for a small fee – should a replacement lender be found. And with interest rates of more than 10 times those offered by standard savings accounts, you can grow your capital more quickly for a brighter financial future.
Lending Works' unique, three-tier protection allows you to grow your savings in the knowledge that they are protected from fraud, borrower default and economic problems that are beyond your control.