Funding circle review 2020

Funding circle P2P lending platform is a good choice for those who want to make use of their ISA allowance. It offers good interest rates for pound loans and if you don’t want to risk the GBP/EUR exchange rate it may be just good enough for investments over the ISA allowance.

General info

Funding Circle has been founded in August 2010 and listed in London Stock Exchange on October 2018, which makes it a safer bet compared to other private platforms. It had plenty of time to work on good user experience and that really shows.

Return on investment

Returns on loans in Funding Circle are average to low compared to the rest of the market. My personal returns since starting (I’m using their “Balanced” auto-invest approach) have been 7.4%. It is less compared to platforms in Eastern Europe like Crowdestor, Envestio or Kuetzal, which offer north of 12% returns, but slightly more than other platforms in UK.

Default rates

Unfortunately Funding Circle does not show personalised statistics for the number of defaulted loans, only the amount that has been subtracted. At the time of writing that number for me has been £220.96, which is fairly low compared to other platforms especially given that I have stopped auto investing and am cashing out. I suspect this number will grow over time though. Recoveries have been slow, but there already are some, so it’s better than nothing.

Loan selling process

The loan selling process at Funding Circle is awesome. They prompt you to turn off auto-invest functionality before you start selling loan, which is great, because I’ve been caught by this in other platforms before. Then all you have to do is specify the amount of money you want to get back and Funding Circle handles the rest! It’s also quick for my needs. Selling about £2,000 worth of loans took a day.

There’s also no need for the secondary market because of how the loans are sold, which is great for me as I don’t have to spend time there. It may be a “bad” thing for those who want to have more control over their loan selling process.

Quick withdrawal processing

[TO_DO] I had to widthdraw X times in the past and the widthdrawals have always been expedient with money reaching my bank account in 1-2 working days.

Secondary market

See “Loan selling process”.

Security

My standard for good security is two-factor authentication (2FA). Funding Circle doesn’t have it. They do have password + 1 out of 3 security questions, but to me that’s just not good enough. However, withdrawals are only permitted to the accounts you deposited from, which is good as it reduces the chance of someone taking over your account and stealing your hard-earned money.

Option to sell bad loans

If you have bad debts there’s no way to get them off your books. Ohter platforms like Paskolu klubas offer an option to sell bad loans with a discount, which is really good if you want to keep your loan book clean or you need to cash out in a reasonable time period.

Funding circle platform verdict for 2020

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