Funding Circle Loans

Need advice on loan interest and repayment

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Hi, my client has been offered a Funding Circle loan of £150,000 @ 10.2% APR 6.92% for a loan term of 60 months. Gov will pay the first year interest of £15,300 plus Completion Fee of 4.75%.  The monthly repayments will be £3,818.  He will have to repay the Bounce Back Loan he got last year of £50,000 from his bank.  I can't figure out if it's a good plan/option.  Does anyone know if this interest rate offered is standard from Funding Circle?

Thanks in advance

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John Toon
By John Toon
29th Mar 2021 16:08

The interest rates offered by Funding Circle are variable. I'd say the rate you have is probably in the bottom quartile of rates payable. When the client applied they'll have been told what risk banding they're in which indicates the type of rate they get.

FC will never be cheaper than the banks.

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By DaveyJonesLocker
29th Mar 2021 17:30

For Funding Circle, that's low.

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By Michael Beaver
31st Mar 2021 16:01

The bounce back loan is much cheaper than the FC loan. The question is, can your client burrow the £100,000 difference from somewhere else at a lower interest rate? If so it might work out much cheaper over the term.

Also, FC loans can't have voluntary repayments made during the course of the loan. You either have to pay the contract amount or the whole balance - nothing in the middle.

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