Lending Crowd Review 2021: Is Peer-to-Peer Borrowing Worth It?

 

Most people don’t plan to borrow from or lend money to their peers. That’s because financial institutions have been the go-to lending source for centuries.

Peer-to-peer (P2P) lending has more recently become an option, causing people to ask the natural next questions: Is it safe, and is it worth it?

P2P loans can be used for a variety of things, whether they be needs or simply desires. Companies like Lending Crowd now offer a variety of this type of loan to New Zealanders.

Lending Crowd offers a unique approach to the loan process. Instead of a typical loan platform that is often seen with other financial institutions, it fills more of a matchmaker role than a bank.

In this Lending Crowd review, we explore the various benefits and interest rates the company offers, as well as other pros and cons, to decide if it would be a good fit.

What is Lending Crowd?

With peer-to-peer lending platforms like Lending Crowd, the financial institution is cut out of the equation. The loan process is done directly between the lender and the borrower. With this process, the lender is considered an investor.

Lending Crowd connects investors directly with potential borrowers. An investor can inspect a loan application to see what it will be used for, and then decide whether or not to invest. The borrower and investor are never given any personal or identifying information about the other party.

Borrowing with Lending Crowd

Borrowers can apply for loans online, through this platform. Once the 10-minute process is complete, the application will be forwarded on to investors for approval. After the application is assessed, the borrower will be given a proposal for rates and terms.

It will then be up to that individual to choose from the various available options. At that point, the investor will fund the loan, and the money will be deposited straight into the borrower’s bank account.

Investing with Lending Crowd

Investors can get started quickly and easily by joining the platform and verifying their identity. Once the signup process is complete, investors can start reviewing applications and investment opportunities. They can begin with a minimum deposit of $50.

Because Lending Crowd allows investors to diversify, they can choose to invest in multiple loans in increments of $50. They can review their portfolio online at any time, keep track of their investments and returns, and even reinvest at any time.

Types of Loans Lending Crowd Offers

Lending Crowd loans are funded to help many New Zealanders. Here are the types of loans offered:

  • Personal loans. A Lending Crowd personal loan can be used for any purpose. Things like holiday spending, debt consolidation, home renovation, and emergencies can be financed with these personal loans.
  • Car loans. Car loans with Lending Crowd can finance a variety of motorized vehicles such as cars, trucks, motorbikes, caravans, motorhomes, and anything else that is made for travel.
  • Business loans. A business loan is another option to consider, and can be used for nearly any business expense, such as supply and materials, or a business that is just getting started.

Lending Crowd Interest Rates and Fees

Interest rates and fees are a part of every loan. Lending Crowd interest rates range from 5.03% up to 20.26%. Every loan will also incur a platform fee depending on the loan amount.

Loan AmountPlatform Fee
$2,000 to $5,000$200
$5,050 to $50,000$450
$50,050 to $100,000$950
$100,050 to $200,000$1,450

Lending Crowd have additional interest and fees on defaulted loans.

Reasons to Choose Lending Crowd NZ

There are many perks to borrowing through Lending Crowd. Here are some of the main reasons why New Zealanders utilize this platform:

  • No penalties for early repayment. If borrowers choose to pay off a loan early, they will not receive any extra fees.
  • Large loan amounts. Customers can borrow up to $50,000 with unsecured loans, or up to $200,000 with secured loans.
  • Online service. Borrowers never have to worry about meeting face to face, waiting in a queue, or completing additional paperwork; everything is done online.

Reasons to Avoid Lending Crowd NZ

Despite the perks listed above, some borrowers may still not choose this platform. Here are some potential reasons to avoid Lending Crowd NZ:

  • There is a small market for P2P loans. In recent years, there has not been a big market for P2P loans in NZ, which has caused other financial institutions like Harmoney to stop offering this type of loan.
  • Approval for bad credit can be difficult. While this company does offer large loan amounts, if a borrower’s credit falls into a lower category, he or she may not be able to get the requested amount.

4 Best Features of Lending Crowd

Lending Crowd NZ has many features to offer borrowers and investors.

1. Licensed by The Financial Markets Authority

The Financial Markets Authority (FMA) is a New Zealand agency that regulates financial services and security markets by enforcing company law, financial reporting, and securities. Its stated goal is to promote fair, efficient, and transparent financial markets.

Being licensed by the FMA means that Lending Crowd is a trusted company within New Zealand, based on meeting and sustaining standards developed by the government. This is an added benefit of partnering with this platform.

2. Keeps Borrowers and Investors Anonymous

Investors and borrowers are never provided with the other’s identity or personal information. Borrowers never know who their investors are, and investors don’t know who the borrowers are. This helps keep both parties safe and secure.

3. Offers Secured and Unsecured Loan Options

With secured loans, borrowers have to put up collateral, like cars or property. Unsecured loans are not backed by any type of asset.

Lending Crowd’s loans can either be secured or unsecured, giving borrowers the freedom to not have to provide collateral for their loans.

4. Offers a Referral Program for Members

The Lending Crowd Hero program is designed as a referral option for members. When someone signs up through a member’s unique link, that member and the referred party are both rewarded. The member earns $100, the borrower gets $50, and Lending Crowd donates $25 to charity.

Things to Know Before Choosing Lending Crowd

Here are some additional points to consider before deciding whether or not a loan through Lending Crowd is the right fit.

Is it more affordable to borrow from Lending Crowd or a bank?

NZ banks do not generally offer personal loans in NZ for rates that are competitive with Lending Crowd’s 5.03% starting rate. There are some benefits from keeping all your business with your bank but you need to decide if it is worth the difference you can save in your interest rate.

The best way to know for sure whether it’s more affordable to borrow from Lending Crowd or a bank is to compare the personal loan interest rates and fees. Shop around for the best offers, and use rates and fees to assess how much money will be saved with each lender.

Is Lending Crowd safe to invest with?

Investing is always risky. No matter how investors choose to invest, there is always the possibility that they might lose money. But with that being said, Lending Crowd does offer some security measures to protect its investors.

Current security measures include running a credit check on all applicants to assess their probability of paying back the loan. In addition, Lending Crowd suggests that investors diversify their investments with more than one loan.

What are Lending Crowd’s requirements to apply for a loan?

Applicants must be at least 18 years old, be citizens or permanent residents of New Zealand, and be able to afford the loan. This is all assessed via a credit check, proof of income, and three months’ worth of bank statements.

How to Know if Lending Crowd is The Right Lender for You

  • Taking out a loan can be nerve-wracking. It’s important to make the right decision, yet also keep from missing a great opportunity. Many factors ultimately go into the weighty decision of borrowing money.

  • The best thing to do is to conduct as much research as possible before taking out a loan. Compare rates, fees, and any terms and conditions that will apply to the type of loan that is needed. This will help with the bigger picture of where to apply.

  • Lending Crowd offers a convenient platform for borrowers and investors to partner together without the hassle of financial institutions. In the end, borrowers are provided with the loans that they need, and investors make money through their careful investments. This is ultimately beneficial for both parties.