New rates and loan terms at Linked Finance

Linked Finance was the first P2P lending site that I used and originally I was very happy. Previously you could ‘bid’ to lend money where you got to chose your own interest rate. This allowed you to do your own research and price in the risk to the interest rates. Now, the rates are fixed by Linked Finance and are based on the grade of the loan – which is also decided by Linked Finance. Without any buy-back guarantee you are putting a lot of trust in Linked Finance. I’ve stopped adding money to my Linked Finance account and will start withdrawing it as the current loans are repaid. Any loans I would consider investing in are normally filled by auto-invest bids within minutes of going live.

On Wednesday Linked Finance announced they were adding new loan grade, rates and terms as of September 12th.

  1. Adding a new 6 month loan term. Currently loans are either 1, 2 or 3 years.
  2. Adding a new grade ‘A+’ above A. You can read more about how Linked Finance comes up with their gradings on their blog.
  3. Amended the interest rates on future loans.
6 months 12 months 24 months 36 months
A 6.0% 6.5% 7.0% 7.5%
A+ 7.0% 7.5% 8.0% 8.5%
B 8.5% 9.0% 10.0% 10.5%
C 10.0% 11.0% 12.0% 12.5%
D 12.0% 12.5% 13.5% 14.5%
E 13.0% 14.0% 15.0% 15.5%
Y 15.0% 15.0% 16.0% 17.5%

 

I think the addition of a 6 month loan term is a very good change however, its not enough for me to considering lend more through Linked Finance. It’s a pity as I liked the idea of supporting small Irish businesses but its not an attractive proposition for me.

They have also launched Pension Accounts which you can read about on theirĀ blog. I haven’t read into it at all so can’t comment.

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