Historically the average annual yield received by investors has been 3-8% depending on the loan market.
Investor returns shows TWR-method calculated profit index to all Fellow Finance –service investments combined. Investment value is defined as open loan capital decreased by credit loss reservation. Credit loss reservation is calculated daily based on payment delays, realization value and risk class. During the period 7/2014 - 11/2016 the credit risk reservation is an estimate because of the change done to the calculations. Historical profit is not a guarantee for future profits. Comparison index in the graph does not include dividends.
Consumer and business loans have offered a high annual return for investors, historically the annual return has been around 3-8%. Additionally investing in loans offers you an access to a new asset class. The return on loans does not correlate significantly with the stock or bond markets indicating that loans are a good addition to managing your portfolio.
The return is interest on lent capital. The interest rate of a loan is determined in an auction between investors. Interest rates generally vary between 5-20% depending on a market and credit rating of a borrower. The level of interest rate offers competitive loans for borrowers and an attractive return opportunities for investors and thus creates value for both parties.
In certain peer-to-peer loans the credit risk is limited by selling non-performing loans to collection agencies. Further, a voluntary payment protection insurance is offered for Finnish consumers. In business loans, the credit risk is reduced by an entrepreneur's personal guarantee and also often a collateral such as real estate or enterprise mortgage.
Our marketplace combines those who want to save their spare money for those who need temporary funding. Both a borrower and a lender decide the terms on which they are willing to lend and borrow. You can invest in consumer loans of five countries as well as short-term and long-term business loans of three countries.
Fellow Finance is the leading marketplace lending platform in Northern Europe. We have intermediated through our marketplace for over half billion euros of loans and the platform has been used by over 900 000 borrowers and over 18 000 investors. Did you know that more than 70% of peer-to-peer applications are rejected because of rigorous credit policy?Read more on statistics
Are you considering a new alternative investment asset class to diversify your total investment portfolio or are you just starting your journey as an investor. Whether you are looking for a saving instrument or managing a bigger portfolio, Fellow Finance enables you to invest in an asset class earlier unavailable. We have made the investing in consumer loans and business loans easy. We have used over 15 years of our experience in credit risk management and loan investment to build the most advanced marketplace lending platform in Europe. Since our establishment in 2013, we have grown to become the leader in Northern Europe in our field. We are offering now an unique possibility for everybody to invest directly in loans free of charge with limited credit risk.
By investing in loans, you will have an access to an investment product that has previously been exclusively available for banks. According to the bank earning logic, a bank collects money from depositors at a low deposit rate to lend the same money to borrowers at a higher interest rate. Our platform removes the bank between a saver and a borrower and the saver himself chooses whom and on what terms he wants to lend his spare money. Thus, the saver gets the entire interest from his money without brokerage fees earlier taken by the bank. Why lend money at a low interest rate to a bank if you can now lend it directly at a higher interest rate and no costs?
Fellow Finance finds and identifies borrowers and assesses their loan applications. Approved application requires that a borrower does not have any earlier payment defaults and the borrower needs to have sufficient monthly disposable income to repay the loan. You choose whom you are willing to lend and on which terms. Our machine learning based credit scoring model has a proven track record that can be observed on our statistics page.
You can easily diversify investment portfolio in hundreds of loans to reduce credit risk significantly and making it possible to get steady returns with low volatility. You can diversify your loan portfolio geographically in peer to peer loans of five countries and business loans of three countries. Investing your total capital to at least 100 different loans decreases credit risk. A maximum 1% of the total capital should be invested in one loan within a single loan market. Investing in peer to peer and business loans enables you to diversify your overall investments in to a totally new asset class that does not correlate much with traditional asset classes such as stocks and bonds.
Read more about what we are offering to institutional investors
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