The 2018/19 tax year ends 5 April. Have you used your tax-free allowance?

Up to £400 cashback & £50 bonus with the LendingCrowd ISA

Capital at risk. No FSCS protection.

Claim offer now

What's in it for you?

If you transfer an ISA of £5,000 or more into LendingCrowd from another provider you’ll also get an additional one-off £50 cashback bonus. Terms and Conditions apply.

The deal with IFISAs

Innovative Finance ISAs are a new type of ISA introduced in 2016 that let you invest in peer-to-peer lending, businesses and properties. That means your funds will be used to provide loans to individuals or businesses who borrow from the IFISA provider, and therefore carry an element of risk to your capital.

Different IFISA providers structure their products differently. For example, Ratesetter offers personal loans to borrowers as well as property, dealer and family financing. British Pearl specialises in property investments, while LendingCrowd lends your funds to credit-assessed UK businesses.

When you invest, IFISA providers effectively facilitate a credit agreement between you as the lender and any combination of individuals and businesses to try to find you the best rate of return.

Why LendingCrowd?

The company was one of the first fintech lenders to receive full FCA authorisation in 2016 and launched its first Growth ISA in 2017. To date, more than 7,000 investors have signed up to the platform.

LendingCrowd matches investors looking for a greater return with small businesses seeking finance to grow. LendingCrowd has facilitated over 630 loans to SMEs across Britain, totalling more than £55 million.

Please remember that, as with any investment product, your capital is at risk. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

Learn more about LendingCrowd

FAQs

How does the investment process work?

LendingCrowd have a handy breakdown of the steps to becoming an investor here.

What details will I need?

When setting up your LendingCrowd account, they’ll ask you for your contact details and a valid driving licence or passport, in order to conform to standard anti-money laundering rules.

When will I get my cashback reward?

Cashback will be credited by LendingCrowd to your Main Self Select Account within 30 days of the Promotion End (30 April 2019). Cashback will be categorised and held as Lender Funds.

You must maintain the stated minimum balance (comprising the Qualifying Amount and plus cashback, once credited) within your LendingCrowd Account for a minimum of 12 months from the date of the cashback being credited.

Full Terms and Conditions for this offer are available here.

How can I transfer funds from another ISA provider?

It’s easy to transfer existing Cash, Stocks & Shares, Lifetime and Innovative Finance ISAs to LendingCrowd. They do all the hard work for you, arranging the transfer of funds from your other provider.

You can make either full or partial transfers from ISAs opened in previous tax years, and full transfers from ISAs opened in the current tax year. The minimum transfer value they accept is £1,000.

How do I know which ISA is best for me?

LendingCrowd offers three different accounts, all of which can be held in a tax-free ISA – the Growth Account, Income Account and Self Select Account.

Growth
If you choose their Growth Account, you’ll automatically invest in all the loans available on their Loan Market. The longer you hold the account, the more diverse your portfolio will become, as the account automatically invests in new loans on your behalf. The target rate for the Growth Account is 6% a year.

Income
This works in a similar way to the Growth Account, with your investment automatically spread across the loans available on the LendingCrowd Loan Market. The key difference is that your interest payments will be transferred to a separate account so you can withdraw them, while your capital repayments will be automatically reinvested. The target rate for the Income Account is 5.6% a year.

Self Select
With the Self Select Account, you pick your own investments on LendingCrowd’s Loan Market. They encourage you to spread your money across a range of businesses, as this is the safest way to protect your capital from bad debt. You also need to take the time to review those companies thoroughly and only lend if the borrower matches your risk appetite. To maximise the return potential, you’ll need to reinvest your capital and interest on a regular basis.

For more information on the different ISAs available on LendingCrowd, see here.

How is risk managed?

LendingCrowd’s expert Credit Team reviews every borrower application. This means only established, creditworthy businesses are able to borrow through their platform.

However, as with all investment opportunities, there are risks involved. It’s important to remember that there’s a possibility that a business may not be able to repay its loan. While they have a recovery process in place, you may not get back all the money you invested in that loan.

Diversify
Diversifying your portfolio is the best way to help manage risk. In other words, don’t put all your eggs in one basket. Spreading your investments across as many businesses as possible on the Loan Market, throughout a range of Credit Bands, means you can reduce the impact of bad debt if a business can’t repay its loan.

What fees are involved?

LendingCrowd’s fees are simple and transparent so there are no surprises when you invest with them. There are no charges to open any of their accounts or to add funds and you only pay fees on the amount invested.

Ongoing repayment fee
A 1% ongoing repayment fee, which is the difference between the rate you lend to a borrower and the interest you receive, is charged on a monthly basis. This fee is taken from each monthly repayment made by the borrower. For example, if you lend at a rate of 9%, you’ll receive 8% after this repayment fee.

Buying a loan part
They don’t charge a fee for buying a loan part.

Loan part sales fee
A 0.5% fee is charged when you sell a loan part. This only applies to the Self Select Account and Self Select ISA. It’s charged on the capital sold. The seller continues to earn interest while the loan is listed for sale. If a loan is sold mid-way through a month, the seller will be paid any interest earned when the next monthly repayment is made.

Withdrawal fee
There’s a withdrawal fee of 1% of the capital withdrawn from the Growth Account, Growth ISA, Income Account and Income ISA. This is paid only when a withdrawal is made, not when a loan is sold. It isn’t included in the target rate for these accounts.

Will I be able to view my LendingCrowd investment on Money Dashboard?

We’re working hard behind the scenes to get an integration working with LendingCrowd accounts and will be in touch when it becomes a supported provider!

Where can I get more information?

A full investor guide is available from LendingCrowd here, or you can contact their team at investor@lendingcrowd.com or by phoning 0345 564 1600.

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