Don't invest unless you're prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 minutes to learn more.

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Category: P2P Lending

Are ISAs Worth It?

Posted on 15/03/202421/10/2024

As we step into 2024, many individuals are contemplating whether ISAs remain a viable option for their financial goals. Is it?

5 Reasons You Should Invest In An ISA At The Beginning Of The Tax Year

Posted on 19/05/202226/11/2024

Now we’re in the 2022/23 tax season, we look into 5 reasons you should invest in an ISA at the beginning of the tax year.

Create A Free IFISA Account And Finance Postgraduate Student Loans

Posted on 05/05/202221/10/2024

Investors can now open an Innovative Finance ISA (IFISA) with Lendwise and earn up to 9% p.a. in tax free interest.

What Is The Lendwise Secondary Marketplace?

Posted on 08/07/202119/11/2024

Lendwise’s secondary marketplace is a feature that allows a lender to potentially realise liquidity earlier than the maturity of their loan investments.

Diversifying Your Risk With The Help Of The Lendwise AutoLend Feature

Smart Risk Diversification: Lendwise AutoLend

Posted on 10/06/202111/07/2024

Diversify your investments for better returns and reduced risk. Build a balanced portfolio with Lendwise AutoLend feature.

An Investor’s Guide To Peer-To-Peer Lending

Posted on 14/05/202110/06/2024

Peer-to-peer (P2P) lending involves matching someone who wants to lend their money with someone who wants to borrow money.

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Lendwise Ltd
3 More London Riverside
London, United Kingdom
SE1 2AQ

Lendwise Ltd is authorised and regulated by the Financial Conduct Authority under firm registration number 782496. Lendwise Ltd is not covered by the Financial Services Compensation Scheme. Registered in England (Co. No. 10466048) with registered office at 3 More London Riverside, London, United Kingdom, SE1 2AQ. Registered with the Office of the Information Commissioner (No. ZA281795).

Legal Terms and Policies

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

You could lose the money you invest
- Many peer-to-peer (P2P) loans are made to borrowers who can’t borrow money from traditional lenders such as banks. These borrowers have a higher risk of not paying you back.
- Advertised rates of return aren’t guaranteed. If a borrower doesn’t pay you back as agreed, you could earn less money than expected. A higher advertised rate of return means a higher risk of losing your money.
- These investments can be held in an Innovative Finance ISA (IFISA). An IFISA does not reduce the risk of the investment or protect you from losses, so you can still lose all your money. It only means that any potential gains from your investment will be tax free.

You are unlikely to get your money back quickly
- Some P2P loans last for several years. You should be prepared to wait for your money to be returned even if the borrower repays on time.
- Some platforms may give you the opportunity to sell your investment early through a ‘secondary market’, but there is no guarantee you will be able to find someone willing to buy.
- Even if your agreement is advertised as affording early access to your money, you will only get your money early if someone else wants to buy your loan(s). If no one wants to buy, it could take longer to get your money back.

Don’t put all your eggs in one basket
- Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.
- A good rule of thumb is not to invest more than 10% of your money in high-risk investments.

The P2P platform could fail
- If the platform fails, it may be impossible for you to collect money on your loan. It could take years to get your money back, or you may not get it back at all. Even if the platform has plans in place to prevent this, they may not work in a disorderly failure.

You are unlikely to be protected if something goes wrong
- The Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover investments in P2P loans. You may be able to claim if you received regulated advice to invest in P2P, and the adviser has since failed. Try the FSCS investment protection checker here
- Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here

If you are interested in learning more about how to protect yourself, visit the FCA’s website here

For further information about peer-to-peer lending (loan-based crowdfunding), visit the FCA’s website here

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