Loanpad has been considered one of the safest investments of all assets when it comes to risk management.
The endorsement came from peer-to-peer lending analyst 4thWay, who gave Loanpad’s premium account and Innovative Finance ISA (IFISA) an outstanding three out of three on its positive ratings.
A review of the P2P lender by 4th Way stated that investors are in a very safe position and are unlikely to lose money with the platform.
The ratings firm said that since lenders’ money is automatically distributed across all existing loans and regularly redistributed, risks are “better contained” than on any other P2P platform or IFISA provider.
The review says Loanpad lenders are buying the “safest slice” of the platform’s bridging and development loans, so the value of the property must drop by around 50-60% of the pre-assessment. that lenders cannot expect to lose money.
He added that partner lending companies retain the riskiest part of each loan, taking the first loss, usually the first 25 percent of losses or even more.
4thWay said that during the pandemic only one loan turned out bad but never ran the risk of becoming a loss to lenders and has since been fully repaid, and Loanpad’s high standards have “attracted many investors towards him”.
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“Loanpad is one of the safest investments of any asset class available to UK lenders,” 4thWay said in the review.
“I think lenders are unlikely to lose money in all imaginable market conditions, with the possible exception of nuclear war type disasters. It is the only P2P lending company I said that.
“In March 2022, we received comprehensive data and insights from Loanpad which shows impeccable performance since the start of the pandemic.
“A small number of loans were granted more than usual, which is normal in the real estate lending business today, as building materials are scarce. Only one loan went bad, but it didn’t. never ran the risk of becoming a loss to lenders and has now been repaid in full.
“The lenders are in a very secure position and they won’t be losing any money. This is because lenders are unlikely to incur even a small loss on an individual loan, i.e. they can expect to receive all their money plus interest.
“Loanpad has built a stellar reputation for continuing to allow lenders to sell their loans and exit quickly, even as investors in all types of investments panicked early in the pandemic. Her high standards soon attracted many more lenders.
In January, Loanpad chief executive Louis Schwartz said the platform had been bracing for “stable and steady growth” this year since hitting profitability month-over-month from June.
4thWay said it expects the platform to be a “sustainable business going forward” as it should find it easy to maintain and grow its base of borrowers and lenders and contain costs.