Frequently Asked Questions
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Before I Borrow – About Leap Loans
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Leap offers loans to help people pay off their debts and take control of their money. These are called refinancing loans. The range you are able to borrow is from £500 to £15,000 and can be paid back over 12-60 months.
If you’re making repayments on one or more debts, we might be able to reduce your monthly payment by lowering your rate of interest.
Our loans come with incentives to encourage financial wellbeing, our Dynamic Rate, freeing up cash so you can make more of life.
There are no hidden penalties. If you want to overpay your monthly amount or pay off your loan early, you’re free to do so.
We’ll charge you an administrative fee to pay for the searches and reports we’ll use to set up your loan. Your repayment rate will then include a portion of our borrowing fee to enable us to provide an excellent service to our customers.
You’ll be able to see all these details when you get your free quote.
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Right now we offer loans only to pay off existing debts like credit cards, store cards and other unsecured loans.
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We offer loans up to £15,000 over a period of 12 to 60 months.
You choose the amount and the length of your repayment period within these limits. You’ll be able to overpay your monthly amount or pay off your loan early, with no penalties.
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We understand that getting into debt happens and getting out of it is hard. We want to give people the help they need to break this pattern and take control of their money.
We use technology to make the borrowing process faster and more efficient, starting with an easy application process.
Since everything is managed online rather than in branches, we are able to lower our costs and pass the savings on to our customers.
By reducing your debt, you could cut the cost of your loan through our Dynamic Rate, freeing up more cash to do what you love.
Besides helping to pay off debts and free up cash, we’ll support you along the way with tips and insights aimed at building financial skills for the future.
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Our loans, through the Dynamic Rate, come with incentives to encourage good financial behaviour.
Initially, you’ll be offered an interest rate that’s based on your credit profile at the time you apply. The interest rate and the term you chose will determine how much your monthly repayment will be.
Your interest rate will never go up, but it could go down over the lifetime of your loan.
Here’s how. Every three months we’ll review whether you have reduced your debt compared to the day you applied for your loan. If you meet our requirements your repayments will go down, freeing up more cash.
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We’ll look at your overall unsecured debt (that’s any money owed on credit cards, student loans, and so on). We will lower your repayment if:
- Your debt has gone up by no more than 5% from your overall debt amount at the point of application .
We understand emergencies can happen and you might not be able to meet these requirements. In that case, your repayment amount will stay the same.
We’ll show you the total saving you could make when we produce your quote.
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We look for individuals who:
- Are UK residents aged 21 or over
- Can take responsibility for their actions
- Have a UK bank account in their name
- Have an income of at least £25,000
- Have a good repayment history, with no defaults, County Court Judgments (CCJ) or Individual Voluntary Arrangements (IVA) in the last six years
We will also check your creditworthiness and expenditures to make sure you can afford to pay back the loan.
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Your credit score could be affected when you are approved for a loan. It won’t be affected if you ask us for a free quote to see if you qualify.
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You must make your payments on time to your investors in the Leap community and to us, to cover our costs.
We collect repayments using Direct Debit or standing order, so you won’t have to do anything except make sure there’s enough money in your bank account.
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- First, get a free quote. To do that, you’ll need to fill in our application form with the amount you want to borrow and the length of time you want to pay it back.
- You’ll be asked to include information about the debts you want to pay off, as well as a few personal details.
- If you’re happy with the quote offered, we’ll check your identity and your creditworthiness and affordability. That will include connecting your bank account to your Leap account so we can access the information you’ve shared with us.
- As long as you pass our checks, we’ll offer you a loan agreement, which you will need to accept.
- We’ll then ask you to set up a standing order with your bank.
- We’ll find investors who will fund your loan. We always split loans across a number of investors.
- When your loan is fully matched, we’ll let you know the details of your individual agreements with your investors, including your repayment day.
- The money will reach your bank account one working day after you accept these agreements.
- You will then need to use this money to pay off the debts you’ve told us about.
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We charge a one-off administrative fee when setting up your loan.
We will also collect a monthly borrowing fee with your repayments, to cover our services in managing your loan.
We also charge a late payment fee for missed payments.
Both fees are included in the rate that we offer you, along with the interest you’ll pay to your investors. This is known as your APR (annual percentage rate), which helps you see what your loan will cost in total, and can be used to compare our loan with other providers.
Calculating your borrowing fee
We’ll base your borrowing fee on your credit assessment, the amount you want to borrow and the time you’ll take to pay it back.Bear in mind
We won’t be able to refund your administrative fee if you decide to cancel your loan after the 14-day cooling off period.
General Questions
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A personal loan is a line of credit provided by a bank or a lender. A peer-to-peer loan is a type of personal loan which is funded by everyday investors. Because peer-to-peer is an online only platform, this type of personal loan is often comparatively low-interest.
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You can apply for a peer-to-peer personal loan on our website. When you submit a form we will complete a soft-search, which won’t affect your credit score, and provide you with the best possible interest rates we can offer. The rate you are offered will vary based on on your credit history and the terms and amount requested.
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Credit card refinancing is the process of paying off one high-interest credit card debt with 0% or low-interest credit to avoid paying additional costs on top of your debt. You can also refinance your credit card debt with a peer-to-peer loan which offers a lower interest rate.
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Debt consolidation is the process of streamlining all your high-interest debts and repayments into one account by paying it off. If you pay off your credit cards, overdrafts and high-interest loans with one low-interest unsecured personal loan, your debt becomes more manageable.
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Peer-to-peer loans are a type of unsecured personal loan. A peer-to-peer loan, often shortened to P2P loan, is a loan which is funded by everyday investors. Because peer-to-peer platforms are online, the overhead costs are minimised. This means both borrowers and investors get better interest-rates compared to high-street financial services.
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Peer-to-Peer lending is where you invest money with a P2P platform to fund loans for individuals, small businesses and ‘peers’ directly. Because the online P2P platform acts as the middle man, the interest rates are comparatively high.
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A peer-to-peer loan is funded by investor’s personal money. As the loan comes from a person or ‘peer’, rather than a financial institution, and is matched with borrowers directly online, the interest rates are competitive. This is because there are significantly less overheads to cover in the process.
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A peer-to-peer platform matches the money invested by lenders to fund personal loans. As the online platform automates the process and cuts out middle-man, investors are offered comparatively high interest-rates. In most cases, a lender is matched with several borrowers to diversify the investment and minimise the risk of loss.
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P2P is an abbreviation of the phrase ‘peer-to-peer’. In a financial context, peer-to-peer is a lending platform which uses investments from lenders to fund personal loans for their ‘peers’.
During and after – The process
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Before we approve your loan, we’ll carry out some checks to make sure no one has stolen your identity and you can afford the loan we’ve offered.
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We consider every application carefully. If we turn yours down, it’s because you haven’t passed our credit checks.
You’ll be able to reapply after six months. And there are many ways you can improve your credit rating. You can start by getting a free copy of your credit report from noddle.co.uk.
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You can, as long as you haven’t accepted the quote. Just apply for a new quote with the updated amount.
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We’ll use a credit bureau to confirm your identity. If they are unable to find proof, we’ll ask you to upload documents like your driving licence or passport for checking.
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When you ask for a quote we’ll carry out an initial search that won’t affect your credit score or be seen by other lenders. We’ll use it to help determine the interest rate that we offer.
Once you’ve accepted our quote and given us permission to go ahead, we’ll carry out a search that could affect your credit score and will be seen by other lenders.
Paying off your debts
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Most creditors have information on their websites to show how you can pay off your balance. It could be by card, bank transfer or direct debit.
If you’re struggling to find this information online, give them a call to get the details you need.
Repayments
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We’ll get your permission to set up a direct debit or we’ll ask you to set up a standig order. Then every month, on an agreed date, we’ll take a payment from your account. You must make sure there’s enough money in the account to cover the payment.
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Your monthly repayment includes the loan principal amortisation (portion of original amount of your loan), the interest due to the lenders and a portion of our fee.
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Yes, you can change the date six months after it was set.
You’ll have to wait if it’s within five working days of your next repayment, since the direct debit will already have been processed.
If you change your repayment day, the amount might go slightly up or down. That’s because the number of days from your current to your new repayment date has changed, and so has the interest that’s repayable.
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If you’re at all worried about or struggling with payments, please get in touch immediately and we’ll work with you to find a suitable solution.
It’s important to know that if you miss or are late with payments, it could affect your ability to take out a loan in the future. So it’s really worth contacting us.
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If you’re having difficulty making payments, please get in touch before you miss one so we can find an alternative solution.
We charge £10 for each missed payment. This is to cover the cost of contacting you to try and recover your repayment.
It’s important to know that if you miss or are late with payments, it could affect your ability to take out a loan in the future. So it’s really worth contacting us.
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If you are unable to make a full repayment it’s important that you contact us.
If you miss or are late with payments, it could affect your ability to take out a loan in the future. So it’s really worth getting in touch.
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Yes, you can. It will reduce the amount of interest you pay overall and, depending on the amount, it can reduce your overall loan term.
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Yes, you can. We don’t charge early repayment fees.
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Your loan is funded by at least five investors, so we’re not able to offer a break from repayments.
If you’re having difficulty making payments, please get in touch before you miss one so we can find an alternative solution.
It’s important to know that if you miss or are late with payments, it could affect your ability to take out a loan in the future. So it’s really worth contacting us.
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We’ll use your details to help make decisions about your loan and to update your credit information. We will never sell your information to third parties.
Making decisions about your loan
We’ll check that you’re creditworthy and can afford your loan by reviewing information provided by you, credit reference agencies and other organisations.This information will then help us decide whether we can offer you a loan or not.
Updating your credit information
We’ll add details of your loan to your file at credit reference agencies. That includes late or missed payments, your loan balance, and any change in personal details that we discover.Protecting against fraud
We’ll check your details and those of anyone whose finances are linked to yours with fraud prevention agencies.
Before I Invest
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Currently, all Leap vetted borrowers will have a similar risk profile. Hence, a higher investor rate does not mean that the borrower has a higher probability of not paying.
However, as with all investments, your capital is at risk.
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We require your bank details to validate your bank account and protect you from fraud. We use sophisticated software to perform these validation checks to make sure that your details are not being used fraudulently.
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As Leap is launching under a new brand with a new way of operating, the default rate will be calculated as loans are originated on the platform. After 12 months, we will be able to publish actual default and arrears statistics.
Currently, we will provide projected losses for the next 36 months based on assumptions we made while building our credit model. These can be found on our Investing Risks page.
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Provided that your money has not been lent out to borrowers, you will be able to withdraw it from your account.
In the case that your money has already been lent out, you can sell your loans to other investors on the platform, but this is only available after one year of the investment being active.
You should be aware that the return of your money is not guaranteed and requires the availability of other investors creating new loan offers and your loan agreement not being late.
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There is no charge for investing on the Leap platform.
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We have a plan in place to ensure that our lenders’ loans are repaid according to the schedule on their contracts. The funding of the plan will come from a combination of the money Leap receives from loan servicing, which is paid by borrowers, and capital from the business as required.
Contracts between Lenders and Borrowers are still legally valid and will not change. Borrowers will have to make payments to Lenders as scheduled. You can find more information on this on our Platform Risks page.
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To invest with Leap, you will need to meet the following requirements:
- A UK resident
- Aged 18 or over
- Have online access to a UK bank account in your name
- Be willing to invest a minimum of £50
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Leap provides unsecured personal loans to UK individuals that are seeking to refinance existing credit that they have.
All have been assessed by Leap to ensure they are creditworthy and can afford the loan before they are matched up with investors.
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When you invest on the Leap platform, your money will go to UK individuals who are wanting to refinance existing credit that they have with one lower rate personal loan.
All borrowers have been assessed by Leap to ensure they are creditworthy and can afford the loan before they are matched up with investors.
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Traditionally, individuals or businesses would save their money in a bank, and the bank would then lend that money to other individuals or businesses. Leap uses technological advances so that investors bypass the bank and lend direct to responsible borrowers.
Leap shares the efficiencies of a secure online platform so that everyone benefits – Investors get a healthy return and borrowers get lower rates.
Your Investment
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Your investment is the amount of money you have decided to lend to borrowers at an agreed rate of return. It could be money already lent to borrowers, as well as money waiting in a queue to be matched.
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- Your money. This is the amount you have decided to invest.
- Your rate. This is the rate of return you want to make, before tax or any losses.
Your money will start earning a return after it has been matched to borrowers.
We let borrowers pay off their loans at any point between their 1-5 year term, and this could affect your rate of return.
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Because you are lending your investment directly to borrowers, there is a chance that they will find themselves in a situation where they can’t make repayments.
We carry out a creditworthiness check to make sure borrowers can afford to repay the loans they are applying for. Once they are approved, we have a system that rewards those who stay on track, giving up part of our fees to reduce their monthly payment if they meet our criteria.
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Initially, borrowers are offered an interest rate that’s based on their credit profile at the time they apply. Then every three months we review how they’re managing their overall unsecured debt (that’s any money owed on credit cards, student loans, and so on).
We will then lower their repayment if:
- Their debt has not gone up by no more than 5% from our last review
We also diversify your investments to reduce your exposure to loss. Each investment you make will be spread across at least five borrowers. The more it is divided up in this way, the less exposure to loss you have: if one person misses a repayment, it will only affect a portion of your capital.
However your capital remains at risk and it is not covered by the FSCS.
Net worth
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Your net worth is the current value of your investments and any cash that is available to reinvest or withdraw.
Making an investment
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- We will suggest a rate of return to you, or you can set your own.
- Each time you make a deposit it will join the queue to be matched to a loan.
- Lower rates will be matched first, so you might decide to adjust your rate and move closer to the front of the queue.
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You can pay by debit card or by bank transfer. You’ll find more details when you start the process.
The repayments you receive will automatically be reinvested. Alternatively, you’ll accumulate cash in your wallet, from repayments or from the settlement of a loan, which you can then choose to reinvest or withdraw.
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The suggested rate is the default rate you will make your offer to invest. It represents your annualised expected return, which assumes that you will re-invest all repayments of capital and interest at the same rate. Interest on Leap loans is calculated daily and paid monthly, so the annualised return includes the effect of compound interest. Please note that you will not earn interest while your funds are not allocated to loans.
Borrower repayment is not guaranteed; hence this will also impact your expected return.
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Leap, when deciding which suggested rate to offer reviews the following factors: economic conditions (strength of the economy, fiscal and monetary policy, inflation, credit conditions), credit and investment seasonality (holiday season, tax season, start of school year, etc.), management of our marketplace liquidity and matching time (supply of investors’ funds versus borrowers’ demand), borrowers’ risk profile and competitive offers.
There is a balance between all these factors that is key to the suggested rate we offer. For example, if we increase investors’ rate, borrowers’ overall rate will increase, potentially reducing borrowers demand. Inversely, lowering investors’ rate could create an excess of loans to be funded relative to the availability of funds, hence resulting in longer wait times for borrowers and investors.
We review the suggested rate on a weekly basis. Please note that a review does not mean an automatic adjustment of the rate i.e the rates are subject to change, but they could remain at the same levels post-review.
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You can select a different rate than the Leap suggested rate. Hence, selecting a lower rate may match your money faster, but you may not receive the maximum expected return possible. Alternatively, by selecting a higher rate, your funds could take longer to be matched while not earning interest. This option provides you with complete control.
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As we are an online platform, we do not accept cash payments. Adding money to your account will need to be done by bank transfer or debit card.
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We do not accept and transfer of money by cheque. Adding money to your account will need to be done by bank transfer or debit card.
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You can start your investment account with a minimum of £50. Thereafter, you can invest as little as £10.
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All approved borrowers are matched up with investors based on the rate that an investor has offered money at. You will not be able to choose individual borrowers to lend to.
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Your investment will be matched to borrowers who will make monthly repayments over a period of 1 to 5 years.
These repayments will be automatically invested in new loans. Alternatively, you can choose to have this cash paid into your wallet.
By reinvesting your repayments, you’ll enter into new loan agreements. These could extend the length of time your money is invested, beyond the original period.
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Every investment is matched to at least five borrowers. This is just one of the ways we work to reduce your exposure to risk.
After making an investment
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We split a borrower’s loan agreement into smaller agreements. Each of these is then matched with money from investors, until the loan agreement is fully funded. This allows us to diversify your investments to at least five borrowers.
This process can take time, since it depends on levels of demand from borrowers as well as investors.
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Money on loan has been matched to borrowers and is earning you interest.
Queued money has not yet been matched to a borrower and so is not earning interest.
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Your cash won’t all be invested in one go. It will be matched to borrowers in smaller amounts to help reduce your exposure to risk. That depends on there being enough borrowers looking for loans. You might also have to wait for other investors to get involved before a loan is funded in full.
You might be able to cut down your waiting time by lowering your rate. However, your expected return may be lower than the maximum possible by lowering your rate.
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You can change your rate before your investment is matched. Once you change your rate, it will then be applied to all future investments.
It’s worth knowing that whatever rate you choose, it will be the minimum you receive. There’s every chance you could be matched to a loan with a higher rate.
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Rates are only locked in once your funds are matched with borrowers and loan agreements have been made. There is a chance that rates could change during the matching process; thus, you could end up with a different rate than the one suggested when you first made your offer.
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You can withdraw any cash that’s in your wallet.
You can withdraw money waiting to be matched to a borrower by first moving it to your wallet.
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A loan agreement sets out the terms that contractually bind a borrower to the individuals lending them money.
At Leap, you lend directly to borrowers. You will therefore have an agreement with each borrower, in which they promise to repay your money at an agreed interest rate and number of instalments.
Leap then acts on your behalf to enforce your rights under this agreement. That could include collecting payments on your behalf, using a debt collection agency to recover unpaid debt or ending an agreement.
Your loan agreements will still be legal and enforceable, even if Leap stops trading. Your loans would continue to be managed and collected according to the process set out in the wind down process we’ve put in place.
You’ll find more about your loan agreements and our role, including our wind down process, in your terms of use.
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Each loan agreement will bring one repayment a month.
- This will automatically be reinvested and lent out to new borrowers.
- Or you can choose to have it paid into your wallet, where you can withdraw it to your bank account.
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Repayments are made by the borrowers you’ve invested in. Each repayment will include a portion of the amount you originally invested and the interest being earned at the rate you agreed.
Interest will be applied to investments every day.
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Your account is automatically set to reinvest the repayments you receive, keeping your money active and earning a return, rather than sitting idle. This will be shown as queued money, until it is matched with new borrowers.
You can turn off autoinvest by going to the Invest page in your account.
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Once you have made an investment, you will be able to view more details in your online account. In the portfolio section, you will see exactly how much money you have out on loan and what has been repaid.
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The Summary page in your online account will give details on how much interest you have earned on your investments. If you wish to see a more detailed view, this can be done on the Portfolio page.
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Every time one of your borrowers makes a repayment it will automatically be reinvested in a new loan. If you switch off autoinvest, repayments will appear in your wallet instead and will be available for manual re-investment or withdrawal.
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Your repayment will be late.
Interest is still applied, so your next repayment might be slightly larger than expected.
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You will get your repayment when the borrower makes it.
If the repayment date moves to later in the month, you will receive a slightly larger amount because of the extra interest it generates.
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You will get a larger payment.
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There are a few things that could affect your repayment. Your borrower might miss payments (known as ‘delinquency’), be unable to pay the full amount and enter into an arrangement or even die. Here’s how we would handle each situation.
Delinquency
This could cover all sorts of situations including late payments, defaulting on the loan, entering into an Individual Voluntary Agreement (IVA) or declaring bankruptcy.
- We will try to recover the outstanding amount by following the steps outlined in our arrears policy.
- If we can’t recover the loan it will probably be written off and you will lose some or all of the money invested in that loan.
Arrangement
This is normally put in place when a borrower can’t make the full monthly repayment and instead pays back what they can afford.
- Any repayments they make will be passed on to you, even if the amounts are lower than expected.
- Your original investment amount might be recovered, however this could take longer than initially expected.
Death
- The executor will be given a copy of the agreement and the outstanding amount. They can decide whether to pay off the loan in a lump sum or monthly repayments. If the estate is unable to cover the loan, it will be written off.
- If there is no executor, we’ll search for a probate record online. If we can’t find one, we’ll get a ‘standing search’ for six months, which means we’ll be informed if anyone applies to legally represent the estate.
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You will receive the outstanding balance on your agreement.
Depending on your settings, it will be automatically reinvested or put into your wallet where you can decide to withdraw or reinvest it.
If the balance spends time in your wallet or waiting to be invested it will not earn interest, and so will affect your return.
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You can sell your investments on to other investors provided the loan has been active for at least 12 months and the borrower is up to date with all the repayments.
Please note that this is not a guarantee and is dependent on other investors making offers to lend on the platform.
Managing my lending
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You can withdraw cash that’s in your wallet or is waiting to be invested.
You won’t be able to withdraw cash that you’ve lent to a borrower, since they will be making repayments in line with your agreement.
However, you can sell your investments on to other investors provided the loan has been active for at least 12 months and the borrower is up to date with all the repayments.
Please note that this is not a guarantee and is dependent on other investors making offers to lend on the platform.
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You can withdraw cash through your dashboard. This is usually credited to your bank account within one working day.
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We don’t deduct tax from your interest, so you’ll need to declare your earnings to HMRC in your tax return.
At the end of each tax year we’ll give you an income statement with details of the interest you’ve earned. You’ll be able to download this from your dashboard and use it to fill out your tax return. We will also report any earnings to HMRC.
You can get more guidance here: www.gov.uk/guidance/peer-to-peer-lending
ISA investors
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ISA stands for “Individual Savings Account” (“ISA”). An ISA is a special type of account which acts as a “tax wrapper” around certain investments which allows any income and profits from those investments within the ISA to be free of income tax and capital gains tax.
There are three types of ISA available to individuals in the UK: a Cash ISA, a Stocks & Shares ISA, and an Innovative Finance ISA (IFISA).
The Leap ISA is an Innovative Finance ISA. We will act as your ISA manager and report to HMRC in relation to your Leap ISA account.
Leap offers an IFISA which allows you to invest up to £20,000 in peer-to-peer lending (P2P) without paying tax on your earned interest. The interest earned on your investments in an IFISA will not count towards your Personal Savings Allowance.
It is your responsibility to ensure you do not exceed the Annual ISA Limit in any tax year.
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There’s a limit on how much you can invest in ISAs per year. The annual ISA Allowance is £20,000 for 20/21. You can use this allowance to fully invest in one ISA, or spread the amount across various types of ISAs – as long as you are under the limit. The limit is reassessed annually and may change for future tax years.
Interest received on your loans do not count towards your annual limit. Any unused portion of your annual limit cannot be carried forward to future years and will be lost at the start of the new tax year.
The annual limit only applies to new ISA funds; there is no limit applicable to old ISA funds being transferred to your Leap IFISA.
New ISA funds will become old ISA funds once the current tax year (2020/21) ends and the next tax year (2021/22) begins, and so on.
Your savings from a previous tax year do not count towards this year’s annual ISA allowance.
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Once you meet the Leap standards as highlighted in the Terms of Use and register to become a member, you can invest either through a standard account or an IFISA account or both. If you decide to invest through the Leap ISA, the Leap IFISA terms will apply in addition to the rest of the Leap Terms.
You will need to follow the process set out in your Leap account, sign the IFISA declaration and accept the Terms of Use.
You can then fund your IFISA account in a similar way to your standard account and up to your annual limit, except in case of transfers from another ISA manager.
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You must not make a transfer yourself by withdrawing the funds and sending these to us. This could result in withdrawal of your funds from your ISA and loss of ISA tax benefits on those funds. Contact us and we will initiate the transfer on your behalf and take the necessary steps to transfer your funds from your old ISA manager to Leap.
About Investing Risks
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Every investment you make on the Leap platform carries an element of risk. Repayment of your capital is dependent on the borrower making all of their expected repayments. If a borrower stops paying, your capital is at risk.
If a borrower stops paying, we will contact them and try to recover the outstanding amount by following the steps outlined in our arrears policy, which is available on request. If this is not possible, the loan will be written off and you will lose the money not paid back on the loan.
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The protection of money invested on the Leap platform is of high importance to us. As such we have the following measures in place to try and protect your money as much as possible.
Strict Underwriting procedures
Before we match investors’ money to a loan, we carefully assess the potential borrower to make sure they can afford to pay back the loan.
Diversification
Any time you invest money on the Leap platform, your investment will be spread across at least 5 borrowers to reduce your exposure to the risk and impact of one borrower not repaying.
Incentives for Borrowers
We provide an incentive for borrowers who stay on track with their monthly payments. In doing this, borrowers are more likely to keep up with their repayments which means you as the investor also get your expected repayments.
It is important to know that while we do our best to make sure that you receive your expected returns, your capital is at risk and you should only invest money that you can afford to lose.
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We perform routine maintenance on the website during which access may be restricted. However, maintenance is usually done out of hours and we will inform you of this in advance.
In the rare case where you cannot access your online account, please contact us at contact@leaplending.co.uk or call us on 0203 664 8625.
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As Leap operates a peer-to-peer lending platform, money invested is not covered by the Financial Services Compensation Scheme (FSCS).
We have measures in place to reduce risk as much as possible and we automatically diversify your money across at least 5 different borrowers each time you invest.
However, it is important to remember that whenever you invest, your capital is at risk and you should only invest what you can afford to lose.
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Peer-to-peer investment is not covered by the Financial Services Compensation Scheme (FSCS). This means that there is a possibility that you could lose all of the money you invest.
However, we try to reduce this risk as much as possible and you can find out more on how we do this on our Investing Risks page.
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When you invest on the Leap platform, your money is lent out to individuals in the UK and contracts between you and these individuals are formed. Therefore, it is the responsibility of the borrower to pay you back.
Leap will be responsible for collecting the monthly repayments and attributing payments to your investor account as well as chasing late payments, in line with the terms set out in the loan agreement and terms of use.
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Leap does not offer any insurance for the money you invest on the platform and, it is important that you know that your capital is at risk as investments are not covered by the Financial Services Compensation Scheme.
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Leap does not operate a provision fund. We aim to reduce risk as much as possible by diversifying your investments across at least five different borrowers. We also provide incentives to borrowers to encourage them to make all their repayments on time.
All borrowers are vetted by us beforehand to ensure they are creditworthy and can afford the loan.
However, it is important to remember that whenever you invest, your capital is at risk and you should only invest what you can afford to lose.
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Each time you invest money on the Leap platform, we spread it across at least 5 different borrowers meaning one borrower will never have more than 20% of your entire portfolio.
Furthermore, each time you re-invest your earnings, your money gets lent to different borrower and so becomes diversified even further.
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Whether you invest or re-invest, your money goes into a queue with other investors waiting to be matched to borrowers. Once it reaches the front of the queue, it will be allocated to borrowers. If, when it reaches the front of the queue, there is another investor selling their loans, your money could be allocated to existing loans; otherwise, it could be allocated to new loans.
This process would be dependent on the rate on offer and your selected rate. Since investors can only sell loans that are a year and older and up to date on repayments, if you are allocated existing loans, they would be active, non-delinquent loans that are older than a year.
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You can sell your investments on to other investors provided the loan has been active for at least 12 months and the borrower is up to date with all the repayments.
If your expected rate is lower than the incoming investors expected return, the amount you receive could be less. Please note that this is not a guarantee and is dependent on other investors making offers to lend on the platform.
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Should this unfortunate situation occur, we will try to handle the matter in a sensitive manner. Once informed, we will request evidence of death and we will get in touch with the estate’s administrator or executor if there is one or search the probate online if not. We will then act in strict accordance with the deceased’s will or the probate’s instructions. The value of the portfolio will be calculated at time of death as capital outstanding on loans plus accrued interest plus any funds available to withdraw or not being loaned yet.
We would continue to recover repayments and interest earned on existing loans for the benefit of the deceased estate. Before any changes can be made to the account, we would require a certified copy of the Grant of Probate for our records. Once we are allowed to distribute the funds, we would do so as instructed by the administrator or executor. This process continues until the outstanding loans are fully repaid or terminated. If the loans have been originated for more than a year, the executor could instruct us to sell the loans. We would do so according to our secondary market policy; there would be no guarantee that money would be returned and would require the availability of other investors requesting investments.
Tax reporting to HMRC will continue as normal and any potential tax implication would need to be addressed by the estate.