P2P Money Blog

Another new entrant has joined the peer-to-peer arena, this time specialising in payday loans.  The Lending Well offers lenders a fixed 12% AER before tax and bad debt for any money lent out.  It charges borrowers 1% per day or a representative 2464.8% APR, for a minimum of 10 days, maximum of 31 days.

In addition there is a RateSetter styled provision fund, but there is currently little information on how this is capatilised, or what bad debt a lender should provision for.

A return of 12% may sound a lot, but lenders would also need to understand how long the money will take to be lent out.  Lets assume that it takes 20 days on average to get to the front of the queue, but the money may only be lent out for an average 20 days, so already lenders will be earning zero while the money is in the queue.

We've asked The Lending Well for clarification and we will update as soon as this is available.

The website is quite graphics orientated and it appears that they have chosen the same logo colour scheme as YES-secure !