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What are fixed rates and how do they work?

Fixed rates are where Funding Circle sets the interest rate of a loan before it’s listed on the marketplace. From 28th September 2015, all new loans will be funded in this way. Typically rates will be set based on a range of factors including the risk band and the term of the loan and by participating, investors on the same loan will earn the same return as each other.

Loans will fill on a first-come, first-served basis. Once you bid there is no way other investors can knock your bid out, meaning your money can be lent out quickly. Subject to the business accepting the loan, your bid will be successful.

Here are the current fixed interest rates (before fees and estimated bad debts):

Term A+ A B C D E
6 months 4.9% 7.0% 8.5% 11.0% 14.9% 17.9%
12 months 5.5% 7.5% 9.0% 11.5% 15.5% 18.9%
24 months 6.5% 8.0% 9.5% 12.5% 15.9% 19.9%
36 months 6.5% 8.5% 10.0% 12.5% 16.9% 20.9%
48 months 7.0% 9.0% 10.5% 12.9% 17.5% 21.5%
60 months 7.5% 9.0% 10.5% 13.5% 17.9% 21.9%
             
Est. annual bad debt rate 0.6% 1.5% 2.3% 3.3% 5.0% 8.0%

Interest rates for property loans will be set on a case by case basis and will be clearly indicated on the individual loan request.

Interest rates will be reviewed by Funding Circle on a regular basis and we will notify investors when they change. If you use Autobid, we recommend logging in and checking your settings regularly.

If you’re an Autobid user, you can select your secondary offer rates to be below the fixed rates. If you do this, you’ll purchase loan parts from other people at or above your secondary offer rate. 

Please be aware that the value of your investment can go down as well as up, and your actual return could be higher or lower as your capital is at risk. 

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