Peer-to-peer (P2P) lending involves matching someone who wants to lend their money with someone who wants to borrow money.
The person lending money is doing so for the purposes of investment and wants to generate a healthy return. The borrower is looking for a low, competitively priced loan and flexible repayments terms.
At a time when interest rates are at an all-time low and banks and building societies are offering minimal returns on most savings accounts, peer-to-peer lending offers the potential to earn higher rates of interest.
Why invest with Lendwise?
We specialise in education finance and help individual borrowers to achieve their academic and career aspirations. Lending for this purpose increases an individual’s probability of securing a higher future income and subsequently enhances their ability to repay what they have borrowed. This type of socially responsible investment offers both a positive social impact and a significant financial gain for the lender.
Who are our borrowers?
Our borrowers are primarily UK residents studying for a postgraduate degree or professional qualification who require a loan to fund their studies. However, we also welcome applications from European or international candidates with an offer from a leading (Tier 1) UK university or another renowned university internationally.
To qualify for a loan, our borrowers must complete a loan application which is assessed by our credit officers using a robust credit scoring algorithm, and if successful their loan requests are presented to Lendwise lenders for funding.
What are the risks involved with peer-to-peer lending?
We work hard to minimise the risk involved with peer-to-peer lending but as with any form of investment, it is never guaranteed that you will get back your capital or interest. The main risk you face as lender is non-payment by a borrower, but as highlighted above, we believe our lending model and borrower profile helps to minimise this risk.
Diversifying your portfolio is also an effective way to significantly minimise risk. We offer several tools to help you do this such as our AutoLend functionality which allows you to set customised lending criteria thus personalizing your lending strategy to be aligned with your desired investment objectives. You should also consider how balanced your investment holdings are in general and whether you could reduce your overall level of risk through further diversification.
How much could I expect to earn in interest?
Benjamin Franklin, one of the founding fathers of the United States, once said: “An investment in knowledge always pays the best interest.”
In addition to enabling people to progress with postgraduate education and professional qualifications, investors of Lendwise can also expect to achieve returns of approximately 8% per annum from a diversified pool of loans. Meanwhile, investments in individual loans can go up to 10% a year.
If you would like more information about investing with Lendwise have a read of our FAQs for lenders.
As with all peer-to-peer loans, our products place capital at risk. You may not get back the full amount you lend and/ or the interest you expect. Loans are made to individuals over a period of up to 10 years and as such, loans can be illiquid. You should consider seeking independent tax and financial advice before making a peer-to-peer loan. The tax treatment of interest and reliefs on defaults may be subject to change and tax treatment will depend on individual circumstances. Any reference made to past performance or forecasted performance of interest rates are not a reliable indicator of future performance. Lendwise Ltd, trading as Lendwise, does not provide investment or tax advice, and information included in this document should not be construed as such.