Before You Apply - GuarantorLoan

Risk summary for P2P agreements
or P2P portfolios

Estimated reading time: 2 min

Due to 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.

Am I eligible to apply for a loan?

All lenders have loan eligibility requirements, to be eligible to apply for a loan with us you must:

be a UK resident or have the right to reside in the UK throughout the loan duration
be employed, self- employed, in receipt of a pension or certain types of benefits
be at least 18 years old and no older than 75
have a guarantor (you do not need a guarantor to apply but you will need a suitable guarantor before the loan is approved)
not be in an IVA, Debt Management Plan or declared Bankrupt

Important information

Understand how our product works and what you need to consider before you apply.

What is a guarantor loan?

FAQs

Who can be a guarantor?

Terms and Conditions

Where can I get advice on my finances and options?

Money Advice Service free, unbiased and easy-to-access money tools, information and advice – www.moneyadviceservice.org.uk
MoneyHelper is a consumer-facing service, providing free and impartial money and pensions guidance for people all across the UK – www.moneyhelper.org.uk/en

If you require any further information about our product or services, please contact us.

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Registered with the Information Commissioner's Office ZA055459

Registered Office address: Match the Cash Limited, Acre House, 11/15 William Road, London, NW1 3ER. Registered in England No. 08667447

VAT Number: 455 8763 47

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