What Is The Lendwise Secondary Marketplace?
Lendwise’s secondary marketplace is a feature that allows a lender to potentially realise liquidity earlier than the maturity of their loan investments.
The length of time it takes to convert assets into cash is an important consideration for any investor. Cash is the most liquid asset but a diversified portfolio means you may have investments of varying liquidity.
When it comes to peer-to-peer lending, investors should try to ensure that any money they choose to lend won’t be needed prior to the maturity of the loan.
Generally, most peer-to-peer loans range in length between one month and 10 years. At Lendwise, our borrowers are seeking funding for postgraduate degrees and professional qualifications, so the length of a Lendwise loan can go up to 10 years.
As an investor, you will be able to view the duration of each loan on the loan listings page as well as on an individual loan profile page.
The first/next repayment date is also clearly displayed on each loan listed for ‘sale’ on the Lendwise platform.
On the whole, investors should consider carefully (and take financial advice if they need to) before investing money which they might need access to sooner than the maturity date of their investments(s). However, we appreciate that there may be occasions when you do need to access your funds earlier than planned.
It is for that reason we introduced a secondary marketplace into the Lendwise platform to give investors the option to achieve liquidity earlier than the maturity date of their loan.
Through the secondary marketplace, investors can choose to sell either all or part of their investment to other lenders on the Lendwise platform. This is based on there being another lender purchasing the loan investment that has been put up for sale.
Once purchased, the loan sale price – minus a 1% administration fee – will be immediately credited to your account and available for withdrawal or reinvestment.
The sale price is equal to the price you paid for the loan plus any interest accrued up to and including the day before the point of sale.
To protect lenders from acquiring a loan without knowledge of potential repayment issues, we restrict the sale of loans with any arrears, defaults or payment difficulties.
This ensures peace of mind for buyers as well as sellers. The secondary marketplace has become a vital part of the service we provide to investors and means that we are able to increase liquidity and allow people to manage their money in the best way possible.
For more information on using the Lendwise secondary marketplace please click here.
*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 is 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.