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When does Funding Circle default a loan, and why are the loan parts assigned?

If a borrower fails to make payments on time (or in whole), or is otherwise in breach of any term of the Loan Contract, Funding Circle may place the company “In Default”.  The effect of this is that the loan is terminated and the entire outstanding amount owed (including all interest to the end of the term plus costs of recovery) is immediately due and payable. 

When a loan is placed “In Default”, the investors are informed (in their loan comments on the summary page) that their loan contracts will be assigned to Funding Circle Trustee Limited (“FCTL”). Assignment enables FCTL to “step into the shoes” of the investors, which makes it easier for Funding Circle to negotiate with the borrower (and any guarantor), and to take steps to enforce the all assets security.

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