Proplend’s automated investment facility is getting an upgrade this week, hot on the heels of the platform’s first Auto-Lend only funded loan.
Following its initial launch in August 2018, the addition of market choice in February 2019 and our first loan to have Tranche A fully auto-allocated in April, Auto-Lenders old and new will have access to a range of customisable options from tomorrow (11 June).
With the new functionality, Auto-Lend can be more things to more lenders, with a number of ways it can be used to enhance the Proplend experience – be it truly passive investing, personalising allocation criteria, priority-access for our safest investments in new loans, or simply added convenience.
4 Ways To Make Auto-Lend Plus Work For You
1. Just turn it on and let Auto-Lend do the rest
Whether you’re new to P2P Lending, new to Proplend, or just prefer to take a back seat with your investing, you have the option of turning auto-investment on with its ‘auto’ settings. That is; automatically allocating available cash to Tranche A investments only, in loans with 3 years or less to run, in both our primary (In Funding) and secondary (PLE) markets.
If you’re an existing Proplender enabling the facility, Auto-Lend won’t touch your existing loan holdings, but as standard it will check that you’re not being allocated loan parts that would take you over 20% of your total account value in one loan.
New lenders choosing to use, but not customise Auto-Lend, will see initial deposits of up to £5,000 invested to five loans, £1,000 per loan. The 20% limit per loan applies thereafter.
2. Turn Auto-Lend on, customise it and fine tune it
While an increasing proportion of our lenders have already used Auto-Lend in its current format, we’ve listened to feedback and know that users and non-users alike would welcome the opportunity to tailor the facility to their preferences and circumstances. So that is what we’re delivering.
You may prefer to customise settings from outset and leave Auto-Lend to fulfil your fixed requirements, or to keep a closer eye on your account to see if varying the settings from time to time would work better for you. Either way, the option will be there to ‘tweak’ things – including turning the facility itself off and back on whenever you want.
3. Turn Auto-Lend on for smaller, popular loans to improve your allocation prospects
Past experience tells us that new Proplend loans tend to be extremely popular and fund very quickly. Small, high-rate loans in particular can be fully funded in minutes, so Auto-Lend’s priority access to Tranche A for new, primary market loans can be invaluable for improving your chances of participating.
Investing one loan part at a time, Proplend’s token-based system allocates to every Auto-Lend enabled account in turn, before allocating second parts (subject to loan availability and available cash) to those that are still eligible for allocation based on their maximum investment per loan settings – and so on. In this way Auto-Lend equitably allocates oversubscribed loans, as well as maximising the number of lenders who can get involved and diversify their investments.
Our most recent loan to go into funding, a small (50% LTV) Tranche A only offering, was the first to be taken up entirely by Auto-Lenders, so it was important for us to try to remove some of the barriers lenders have fed back for not using the facility. Perhaps most importantly, adding the functionality to cap how much of their available cash should be allocated to any one loan.
4. Turn it on only for the loans you like to let Auto-Lend do your bidding
We hope the imminent Auto-Lend upgrades encourage more Proplenders to utilise the service as the facility becomes more suitable for a wider range of preferences. Whilst still Tranche A only, Auto-Lend being more customisable means it can be enabled with confidence by those happy to select their loans but who’d prefer not to have to be around to log in promptly at midday to participate in new loans.
Alternatively, for those who would still like to try for Tranche B or C investments having enabled Auto-Lend for a specific loan, they do have the option of disabling the facility shortly before the usual midday In Funding time and trying to manually invest too. With the ability to set a monetary limit for Auto-Lend, they can ensure they have available funds for the desired Tranche B or C investments.
Many of our lenders have preferences for certain borrowers, certain exit strategies, certain property types, certain loan durations – and Auto-Lend Plus will help these more proactive investors to automate their lending only to the loans that meet their individual criteria. Recently we made a 4-year loan available on the platform that was unavailable to Auto-Lenders on account of the term. Going forward, facility users have the option of extending their maximum loan term, so investment in longer loans can be automated.
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Auto-Lend Plus will continue to target a minimum return once invested, of 5% pa after fees but before bad debt and taxes. We’re proud of our record of no investor losses, our reputation for “extraordinarily low-risk property loans” (4thWay) and the faith our lenders have in our underwriting. We hope that the changes we’re making empower more of them to automate their investing.
Anyone considering using Auto-Lend should familiarise themselves with how the facility works before turning it on. Existing facility users will automatically be moved across to Auto-Lend Plus with their current market selections and capital reinvestment preference, but we’d encourage them to log in shortly after release to check their settings are still the most suitable ones.
Remember, the target rate is a guide – we pass on the actual interest rate earned from lender’s allocated investments. Just as these returns have varied according to which loans individuals have been allocated to, it’s important to be aware that their choice of Auto-Lend settings will have a bearing on returns and on potentially on speed of allocation.
Capping the investment per loan at £1,000 for example, will help achieve greater diversification, but is likely to take more time to get funds deployed, particularly if there’s a lot of available cash on account. Similarly, choosing allocation to the primary market only will reduce the number of eligible loans for your available cash to be deployed to.
Summary – 4 Ways You’ll Be Able To Customise Auto-Lend Plus
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Select your maximum investment per loan (£1,000 multiples)
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Choose which loan markets you want your cash allocated to
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Decide not to automatically reinvest repaid capital
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Invest in longer loans (up to 5 years)
We will confirm immediate availability of new Auto-Lend customisation options to all lenders tomorrow. This will give them time to familiarise themselves with the new functionality ahead of our next primary market loan. As with the existing facility, Auto-Lend Plus will work at account level and will be an option for all existing and new ISA, Pension and Classic accounts.
Please note, as with manual lending, P2P loan investing isn’t covered by the FSCS, so capital is at risk.
Related to this post ….
https://kon.proplendpro.com/invest/auto-lend-investment-options/
