Lending Works are raising their rates from tomorrow (Monday 22nd Jan). The 3 year product will rise from 4.0% to 4.5%, and the 5 year from 5.5% to 6.0%.
Lending Works change their rates every couple of weeks according to supply and demand. This is the highest I can remember seeing their rates, which in the past have often fallen to the 3.x% range for the 3 year and 4.x% for the 5 year investment product.
Innovative Finance ISA
Lending Works have an Innovative Finance ISA which allows you to invest up to £20,000 tax free each year. The minimum investment for Lending Works is £10. It can be a bit difficult to understand how ISAs work at first, especially if you are also hoping to open with other providers in the same year. I’ve written a more detailed intro to ISAs here, and Lending Works have also written up their own guide to ISAs.
£50 Refer a Friend Cashback
Lending Works offer a £50 refer a friend cashback for new users. These are the terms and conditions, some of the key points:
- The Referee will be eligible to receive the Referee Bonus once the Referee has created a new Lending Works account and lends at least £1,000 on the Lending Works platform.
- the Referee’s funds are considered to be lent when the Referee’s lending offers have been matched to borrowers and the funds are showing as ‘on loan’.
- Bonuses will be available for further lending or withdrawal.
- If the Referee uses the Quick Withdraw facility to exit some or all of their loans early, within the first 6 months, Lending Works reserves the right to deduct any Bonus
- Lending Works reserves the right to withdraw or amend the terms of this Promotion at any time without prior written notice.
This is my refer-a-friend link – which would also give me a £50 bonus for referring you.
What makes Lending Works different?
You might be wondering, what is so special about a 4.5% or 6% return? Many other P2P lending sites boast higher potential returns? I’ve written a more detailed review of Lending Works, but some of the key points I mentioned:
- a ‘hands-off’ investment platform which offers peer to peer personal loans
- targets lower risk consumers with higher credit ratings
- offers both a provision fund and additional insurance to protect against default on all its products
Note that when I wrote my review, there was a large waiting queue to invest new funds. Apparently this has now reduced to one or two days.
What happens if I want to sell out early?
If you want to take advantage of this offer, but need access to you money in the short term, you can potentially sell out early at a fee. Lending Works say:
For a small fee of 0.6% or £20, whichever is greater, you can take some – or all – of your money back early, provided we can find another lender to step in.
So in theory (and subject to lender demand), if you invested £2,000 at 6% and sold out after one year then you’d end up with a 5% return. This would be the 6% interest, less the £20 sell-out fee.