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More LendingCrowd Accounts Earn 4thWay PLUS Ratings
LendingCrowd's Growth and Income peer-to-peer lending accounts, including the IFISA versions, have now earned “Excellent” 4thWay PLUS Ratings.
Previously, just LendingCrowd's Self Select lending account and IFISA had earned a rating.
Why have these accounts been upgraded so soon?
The two LendingCrowd* accounts have been awarded ratings just a few weeks after our last assessment. The reason is due to receiving additional information about the accounts.
The Growth and Income accounts do not have capped interest rates. Many comparable accounts from other peer-to-peer lending websites that automatically spread your money across loans do cap rates, while not setting a minimum that you might earn. The capped rate in those accounts is therefore the maximum you can expect to receive.
With no cap at LendingCrowd, the maximum you could receive is linked to the actual interest rates and fees paid by the borrowers, minus LendingCrowd's cut.
The 4thWay PLUS Ratings are based on stress tests in a variety of disaster scenarios to show whether the interest earned is sufficient to protect the average lender from losing money to bad debts.
Reward side better than expected
With the interest rates uncapped, this has improved the “reward” side of the equation by boosting interest a few extra percentage points from around 6% to around 9% before bad debts. The risk side is unchanged.
After recalculating based on this new information, LendingCrowd's two automated accounts now join the Self Select account in earning the ++ 4thWay PLUS Rating (Excellent). This is the second-highest rating.
LendingCrowd is on course to receive the top rating of +++ (Exceptional) if it maintains its interest rates and level of bad debts for a good while longer.
Read the 4thWay LendingCrowd Quick Expert Review.
LendingCrowd is unique in doing peer-to-peer small business lending in two ways. It is the only one to focus these loans in Scotland and it's the only one to provide us with sufficient information to do a detailed assessment of the risks.
It has completed £190 million since 2014 with auto-lend or self-select, auto-diversification and early exit. All its lending accounts are available in an IFISA. It has a 2 PLUSes Rating from 4thWay, the second-highest rating available.
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The 4thWay® PLUS Ratings are calculations developed by professional risk modellers (someone who models risks for the banks), experienced investors and a debt specialist from one of the major consultancy firms. They measure the interest you earn against the risk of suffering losses from borrowers being unable to repay their loans in scenarios up to a serious recession and a major property crash. The ratings assume you spread your money across hundreds or thousands of loans, and continue lending until all your loans are repaid. They assume you lend across 6-12 rated P2P lending accounts or IFISAs, and measure your overall performance across all of them, not against individual performances.
The 4thWay PLUS Ratings are calculated using objective criteria that can be measured and improved on over time, although no rating system is perfect. Read more about the 4thWay® PLUS Ratings.
*Commission, fees and impartial research: our service is free to you. 4thWay shows dozens of P2P lending accounts in our accurate comparison tables and we add new ones as they make it through our listing process. We receive compensation from LendingCrowd and other P2P lending companies not mentioned above either when you click through from our website and open accounts with them, or to cover the costs of conducting our calculated stress tests and ratings assessments. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.
