Anyone lending on a peer to peer platform must understand that there are risks involved and, whilst we will do our utmost to avoid any losses, some will be inevitable.
Always seek independent financial advice
The information shown does not constitute advice or a personal recommendation, and therefore you should seek independent financial advice before deciding to lend. When you lend with GuarantorMyLoan you are making an investment, subject to risk and NOT placing your money in a deposit account.
What is a Guarantor Loan?
A Guarantor Loan is an unsecured personal loan that is supported by a Guarantor, who is usually a friend or family member. The Guarantor is liable to make the loan repayments if the borrower fails to do so. The borrower must make monthly loan repayments for the full term of the loan.
YOUR CAPITAL IS AT RISK
Your capital is at risk as your returns are not guaranteed. Borrowers and/or Guarantors may not always make repayments on time and in full.
Your investment is not protected by the FSCS
Whilst GuarantorMyLoan has sufficient financial resources, (above the regulatory requirement to manage the business), should a situation arise that GuarantorMyLoan find they are unable to continue with the business, your investment would not be protected by the Financial Compensation Scheme (FSCS).
Past performance is not a guarantee of the future
The rate of return shown on our website is at 30th June 2017 before tax and assuming reinvestment of capital throughout the term. It assumes all of the loan repayments are made on time and in full.
The actual rate of return may be lower than anticipated if the capital is not immediately reinvested throughout the term and all of the loan repayments are not made on time or in full.
The annual default rate to 30th June 2017 was 3.1% and the anticipated default rate for the same period was 4.2%. Whilst previous returns can be no guarantee of future returns, those lending on our platform over the last 3 years have received approximately 90% the interest due and not suffered any loss of capital.
Accessing your capital early
You may not be able to access your money early. Should you need access to your money before it is due to be repaid, we offer a tool called ‘Quick Return’, which helps you sell your loans to other lenders, so you can get back your money, provided that there are others wiling to purchase your loans. We cannot guarantee that you can get your money back early. Please refer to section 11.5 of the Lender Terms. There is an administration fee payable to Match the Cash of 2.5% of the amount you wish to access.
You may have to pay tax on the interest earned. You are responsible for accounting for any income tax, corporate or personal taxes that may be payable by you.
MITIGATION OF THE RISKS:
Spreading the risk
In order to help you to reduce the risk of not achieving the returns anticipated or losing your capital, lending is divided over a minimum of 20 borrowers. The maximum we allow you to lend to any one borrower is limited to 5% of your investment
Due diligence on Borrowers and Guarantors
All borrowers and guarantors are carefully selected by trained employees. Credit checks and affordability assessments are completed for both. Your money will only be lent to those that meet our lending criteria.
Thorough fraud searches
We take the threat of fraud seriously at GuarantorMyLoan. Protecting our lenders against fraud is paramount. Each borrower and guarantor is required to provide identification in the form of photo ID and a bank statement. This information is verified by independent checks provided by reputable credit reference agencies which have access to centralised databases, enabling them to cross reference information throughout their network of members.
Discretionary reserve fund
GuarantorMyLoan has set up a discretionary Reserve Fund, which is held in a separate client account.
The Discretionary Reserve Fund is a ring-fenced cash reserve fund that is held to meet Lenders’ requests for reimbursement of capital when a borrower’s account is in arrears of sum greater than six contractual monthly payments. The Discretionary Reserve Fund is NOT an insurance product.
We cannot guarantee that you will be recompensed. It is managed equitably and in the interest of all our Lenders to shield them from bad debt. To further safeguard the Reserve Fund, it is set up as a trust which is independently managed from the day to day operations of Match the Cash. The Reserve Fund is topped up by Match the Cash on a monthly basis to reflect the growth of the loan book and anticipated levels of bad debt.
If a claim is made on the Discretionary Reserve Fund, it does not include any interest that has accrued or may accrue.
Your money is held in a segregated bank account until it is lent out- it does not form part of Match the Cash’s assets.
Last Updated: 17th January 2018