Lending Works: peer-to-peer site paying up to £50 cashback to new lenders


Updated on 11 February 2019 | 4 Comments

Help yourself to up to £50 cashback as well as a bank-beating rate on your savings with Lending Works.

Lend through peer-to-peer site Lending Works right now and you can help yourself to up to £50 cashback, as well as an inflation-beating interest rate.

New lenders are being treated to a welcome cashback bonus. Lend £2,500 or more and you get £25 cashback, while if you lend £5,000 or more you’ll get £50.

To qualify you will need to keep your Lending Works loan offers open until 28th November, if they have not already been matched with suitable borrowers.

The cashback will be paid into your account on 1st December.

This deal is exclusive to lovemoney.com readers.

This article is part of a wider series on investing, covering all areas from stocks and shares to buy-to-let, peer-to-peer and alternative investments. Click here to view the full guide.

What return do you get on your money?

Lending Works is a peer-to-peer site which lets you lend your cash to individuals, bagging you a much better rate than if you stuck your cash in a traditional savings bond. To spread the risk, your money is lent across many different borrowers.

You can lend across terms of one to five years on Lending Works. Lend over up to three years and you enjoy a rate of 4.1%, while lending over up to five years bags you a return of 5.5%. To put that into context, here are the top rates on you could earn with a deposit of at least £2,500 in the best savings bonds over the same terms.

Term

Return

One year

1.9%* (Islamic Bank of Britain)

Two years

2.32%* (Islamic Bank of Britain)

Three years

2.5% (Paragon Bank)

Four years

2.85% (Shawbrook)

Five years

3.11% (SecureTrust)

*Anticipated profit rate

As you can see, the rates available from Lending Works are far superior to a traditional savings account. That said, other peer-to-peer lenders also boast some very competitive rates at the moment. Head to our savings centre to see how they stack up.

How safe is my money?

While peer-to-peer lending is now regulated by the Financial Conduct Authority, it doesn’t benefit from the protection of the Financial Services Compensation Scheme (FSCS). The FSCS covers the first £85,000 you deposit in any banking institution, meaning if you placed your savings in the bank and the bank then went bust, you’d get your money back.

However, Lending Works sets itself out as the ‘safest’ peer-to-peer lender around. That’s because it has three layers of protection for lenders’ funds.

First is the underwriting, which is strict to ensure that only the best borrowers are approved, thereby minimising the chances of missed repayments.

Secondly, all of your money lent is held within a trust, administered by a separate not-for-profit company. This money is ringfenced away from Lending Works, so if Lending Works was to go bust, the money would be safe.

Finally, there’s the Lending Works ‘Shield’, which includes a reserve fund (also held within the trust) to cover against missed payments and fraud and ensure lenders get the correct returns. It also includes insurance policies to cover ‘extraordinary’ risks, such as a major negative economic event, again designed to ensure lenders don’t suffer if there is suddenly a recession, for example.

More on peer-to-peer:

Government considers launching dedicated peer-to-peer ISA

Landbay: earn 4.2% lending to landlords

What is peer-to-peer lending?

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