Can you explain the fees and how these are treated in a default?

It is important for us to be clear about the charges that are paid over the Ablrate platform and of the impact that those fees and charges may have on the amount recovered by investors from borrowers in default. When crafting our policy we have a regulatory obligation requiring us to pay due regard to the interests of our customers and treat them fairly. We also have to pay due regard to the information needs of our clients, and communicate information to them in a way which is clear, fair and not misleading These are the charges that can be made over the Ablrate platform to Lenders and Borrowers:
Lenders Fees
Account Fees - There are no fees associated with opening or maintaining an account with Ablrate. Loan Exchange Fees - There is a fee of 0.25% of the value of the trade for a seller and a buyer. At...

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Why do I have to do an ‘Appropriateness Test’?

The Financial Conduct Authority brought in new rules in 2019 that required platforms, such as Ablrate, to classify their customers by experience levels. The Appropriateness Test is part of this process where we have a short, multiple choice, test that seeks to educate lenders on the basics such as how the process works, what some of the risks are and that loans are not covered by the Financial Compensation Scheme. The FCA feel that some aspects of P2P lending is risky and lenders should be fully aware of the risks. We feel this is a good policy as education in any financial scenario is key to understanding the market and getting the best results. If you look through our FAQs you should have sufficient knowledge to be able to pass the test but if you feel that you would like further explanation we are here to help, get in...

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What is a paused loan and what does it mean for me as a lender?

A loan that has been paused is one where we feel that there is a measure of uncertainty and so the existence of a Loan Exchange may be unfair to some people. This may occur if a repayment is late or at risk. It may occur if we become aware of any change in the financial circumstances of a borrower or their client. It may occur if we feel that market activity is not normal in that loan and it may occur if the loan is a short term loan and we feel that it shouldn’t be traded (especially if we have been informed of early redemption of the loan). Pausing a loan is done at the complete discretion of Ablrate, however, on payment date the loan is automatically paused. This is because, in the case of an amortising loan, if a lender has a certain amount of loan on offer...

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What is the difference between an amortising loan and an interest only loan?

An amortising loan is like a traditional repayment mortgage where the borrower pays a constant amount over the life of the loan. The loan repayments are composed of capital and interest, with an increasing amount of capital paid off every month. An interest only loan is the same as an interest only mortgage where the borrower pays interest payments over the life of the loan and repays all of the capital in one lump sum at the end of the term. The main difference for a lender is that an amortising loan reduces the risk for the lender every time a repayment is made, because you are having some of your capital investment repaid. If you are investing in an interest only loan, it is important to consider whether the borrower will be able to make the entire repayment in one go at maturity.

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Lending Options via SIPP/ISA/SASS

Ablrate is able able to offer SIPP accounts through Morgan Lloyd. We are one of only 9 approved peer to peer lending platforms. Morgan Lloyd is also able to accommodate SASS schemes and we welcome those who would like to invest via this kind of pension schemes. Please follow the Morgan Lloyd link for more details, they will walk you through the process with you and get you set up as soon as possible.

Your SIPP or SSAS enjoys some really attractive tax benefits. As you would expect, HMRC regulates these types of pensions to ensure that the tax advantages aren’t abused.

When considering any type of loan (either directly or indirectly) it is therefore important that you are aware of two key restrictions that form part of the HMRC regulations:

Firstly it is not permissible for your SIPP or SSAS to invest in any loan where you are...

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How do you handle my funds when it is on an account?

Your funds are held in a segregated client account the ‘Ablrate Client Account’. ‘Segregated’ means that your money does not form part of our assets in the unlikely event that we go out of business. We hold a ‘Client Money Acknowledgement Letter’ from NatWest Bank recognising that the Client Account funds are separate from our funds. The Client funds are held in one account, however, each Lending Members’ funds are identified on our Platform allowing us to individually identify and allocate funds to a Lending Member.

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Interest payment is due today, why is it not showing in my account?

If a payment is not showing in your account it can be for three reasons: 1. The payment may have been paid after hours on the payment date. In this case the payment is made on the next working day. 2. If a payment has not been received from the borrower the payment will not appear in your account until such payment is received. If this is the case then we will update the Admin section of that loan with an explanation of the late payment and what we are doing about it. 3. If a payment date falls due over a weekend from the borrower, we may not receive the payment until the following Monday. You can track the status of all payments in the Repayment section of each loan (available from the ‘Details’ section)

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Could the return on my investment be different to that advertised, over time?

The rate advertised on loans that you invest in will be the rate you receive if the loan goes the full term and is fully paid.  However, this return could be reduced if the borrower is unable to make payments and you may even make a loss if the borrower does not pay in full. There are no guarantees on Ablrate and your capital is at risk. The Ablrate Loan Exchange allows you to buy and sell loans, but if you sell your loans at a discount your return will be lowered by the amount of that discount.

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Who pays for Instant Returns?

The borrower pays for the instant returns from the funds drawn down when the loan closes. These fees are also due should a loan not fill or not draw down.

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What are Instant Returns?

The Instant Returns feature is unique to Ablrate and was introduced by Ablrate to solve the issue of lost returns while the loan is being completed. For example, if a loan takes 2 weeks to fill you have lost two weeks of interest. We wanted to solve that. How the Instant Returns feature solves this is by rewarding early bidders with returns from the day they make a bid. So if the Borrowing Request runs for one month and the prevailing rate of the loan is 12% you would, if you bid on the first day, get 1% credited to your account on drawn down. If you bid halfway through the month you would get 0.5% etc. We think this is a fairer way of rewarding bidders and encourages loans to close early. Of course, it also gives us the incentive to borrowers to make sure loans drawdown on time! Which...

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At what point can I transfer my ISA from another provider to you?

You can transfer your ISA at any time, you do not have to wait until the end of the tax year.  You are able to transfer in cash from any eligible ISA that you hold from previous years allowances. We only accept transfers in cash i.e we do not hold stocks and shares, or other instruments. Money must be transferred across directly from your existing ISA account to the Ablrate IFISA. Please note you can not move this through a current or savings account as the funds will lose their ISA status. Our platform has a link that allows you to complete this process online and print off the forms required to complete your transfer.
PLEASE REMEMBER, REGARDLESS OF THE TAX BENEFITS, CAPITAL IS AT RISK Whether investments are held within an IFISA or in a general account, they are not covered by the FSCS; the government-backed deposit insurance...

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What is the difference between a cash ISA, a stock and shares ISA and an Innovative Finance ISA?

Interest paid on a cash ISA is tax free and is suitable for short term savings – less than 5 years and interest is received on the savings at a fixed or variable rate. A stocks and shares ISA is a tax-efficient way to invest in shares and securities for five years or more, and when you want to participate in the potential growth in the stock markets. The Innovative Finance ISA allows lenders using online lending platforms, like Ablrate, to receive tax-free interest on their lending activities.
REMEMBER, REGARDLESS OF THE TAX BENEFITS, CAPITAL IS AT RISK Whether investments are held within a IFISA or in a general account, they are not covered by the FSCS; the government backed deposit insurance scheme that protects bank deposits including Cash ISAs.

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