How to invest through a peer-to-peer platform

Common FAQs for investors

• Will my investment be free of risk?  

  As with any investment, your capital is at risk and the value of your investment may go up or down in value. Because you are lending directly to borrowers, there is a possibility 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.

• Is my money protected by the FSCS?  

  Your money is not protected by the FSCS. However, we do our utmost to ensure your money is safe. 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. Because you are lending directly to borrowers, there is a possibility that they will find themselves in a situation where they can’t make repayments.

• What happens if a borrower struggles with, misses or stops repayments?  

  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.

• Can I get my cash back?  

   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.

• Who am I lending to?  

  The money you invest through Leap goes to pre-approved individuals on our platform. These individuals have been vetted by Leap and will have a stable income, a good repayment history, and afford the loan they have been approved for.