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How do instant returns work?

I start earning returns immediately?

On those loans that have ‘Instant Returns Enabled’ you begin earning from the moment you bid. We did this so that there is no period when the money in the loan is not earning a return.

Most borrowing requests qualify and it will clearly marked on each loan so you know when you will be earning Instant Returns.

The returns are automatically calculated by our system and are paid to your Ablrate account as soon as the loan is drawn down by the borrower.

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How are instant returns calculated?

Instant returns are paid based on the time you bid, the rate the ultimate loan will pay, and the amount of time it takes to complete a loan.

For example, if you bid £1,000, the loan is paying 12% per annum and it takes one moth to complete, you will receive one months worth of instant returns, i.e £10. If you had bid on day 15 of the month you would get 1/2%, i.e £5. This ensures that everyone is compensated for the time their bid is outstanding.

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Who pays for the instant returns?

The borrower pays for the instant returns from the funds drawn down when the loan closes. The borrower also pays a listing fee which allows us to cover the instant returns should the loan not be completed as expected.

With instant returns you know that you will be earning from the moment you bid, so you are not having a ‘drag’ on funds you have put aside for lending, even if a loan does not complete.