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Terms and Conditions

General Terms & Conditions

Effective from: 19 Septermber 2017
Ref: V25(AF/LD)

Loan Terms & Conditions

Effective from: 3 July 2017
Ref: V4(AF)

 

Summary of updates to our General Terms & Conditions. (last updated 19/09/17)

In the usual way these amendments will affect all existing and future Borrowers and Lenders.

Note: this is not a list of all changes, but a summary of key changes. We encourage you to please read our updated Terms & Conditions to understand the full changes. Throughout we have sought to clarify clauses and terminology and be more specific.

Principle

New position

Clause

Definitions Updates

Cease Funding NoticeThe defined term is no longer required, so definition deleted.Definitions pg 3
Early Termination FeeWas limited to the Lender Interest in lieu. Now can include Folk2Folk’s costs for the additional work undertakenDefinitions pg 3
Group CompanyNew definition required as there are restrictions on staff directors of Folk2Folk and group companies.Definitions pg 3
Home DefinitionMore detail has been added, defining to when a dwelling will be classed as a HomeDefinitions pg 3
Initial Arrangement FeeNow we have more products (and the Initial Arrangement Fee now varies depending on the product) the Borrower is directed to their Offer Letter for their Initial Arrangement FeeDefinitions pg 4
Late Payment FeeNow the amount payable is within the definition it was within the body of the General Terms & Conditions (the amount has not changed)Definitions pg 4
LenderThe Definition now includes a requirement to be approved by Folk2FolkDefinitions pg 4
Lender Withdrawal NoticeThese provisions have now been moved to Easy In / Easy Out Appendix. These were in the body of the General Terms & Conditions.Definitions pg 5
Loan PoolWe have removed reference to Easy In / Easy Out as the Loan Pool is relevant to all our LoansDefinitions pg 5
Loan Agreement Completion DateThe General Terms & Conditions now sign post the Participants to the definition in Loan AgreementDefinitions pg 5
Substitution FeeDefinition moved into Definition Table from the body of the General Terms &  ConditionsDefinitions pg 7
Transfer DateNew Definition required for the transfer of loans through MarketPlace and otherwise (such as Substitutions)Definitions pg 7

IFISA

New productNew definition of IFISA.Definitions pg 4
Folk2Folk will administer the ISANew Clause confirming Folk2Folk will administer the ISANew Clause 4.5.6
New ProvisionsNew Clause containing the terms and conditions of use of the Folk2Folk IFISA. For a full product description please see the website.New Clause 13
Appendix 3

MarketPlace

Existing LenderNew definition required to identify the selling lender on the new MarketPlaceDefinitions pg 3
New LenderA new definition required to identify a lender buying/bought a loan on MarketPlaceDefinitions pg 5
Par ValueNew definition required sale price of loans on the new MarketPlaceDefinitions pg 5
Minimum AmountA new definition required for new MarketPlace, determining the minimum amount a Loan can be divided intoDefinitions pg 5
Subscription AmountNew term required for MarketPlaceDefinitions pg 6
TrancheNew Term required for MarketPlaceDefinitions pg 7
Transfer CertificateNew Definition required for the transfer of loans through MarketPlace and otherwise (such as Substitutions)Definitions pg 7
Valid BidNew Definition required for the transfer of loans through MarketPlaceDefinitions pg 7
New ProvisionsNew Clause containing the terms and conditions of use of MarketPlace. For a full description please see the website.New Clause 19

Easy In / Easy Out Loans

Terms now in Appendix Now the terms specific to Easy In / Easy Out are in Appendix 4. Previously the terms where throughout the General Terms & Conditions.Clause 6,
Clause 6.2.2, Clause 7,
Clause 15.1.2 (d) Appendix 4

Fixed Term Loan

Terms now in Appendix Now the terms specific to Fixed Term Loans are in Appendix 5. Previously the terms where throughout the General Terms & Conditions.Definitions pg 3
Clause 6, Appendix 5

Rolling Loan

New ProductThis new product is now referred to in clause 6 and Appendix 7Definitions pg 6
Clause 6, and Appendix 6

Fixed 1 or 2 Year Loan

New ProductThis new product is now referred to in clause 6 and Appendix 8Definitions pg 3
Clause 6, and Appendix 8

Fixed 3, 4 or 5 Year Loan

New ProductThis new product is now referred to in clause 6 and Appendix 9Definitions pg 3
Clause 6, and Appendix 9

Pre- Auction Loans

DefinitionDefinition Removed, as Pre-Auction Loans are no longer availableDefinitions pg 6
DescriptionClause Removed, as Pre-Auction Loans are no longer availableClause 6.2.4, clause 7.3 – 4
Clause 15.1.3
Clause 23.2.10

Transfer of Loans

Process of transferring loansFor clarity the terms of any transfer of an interest in a Loan is now within the General Terms & Condition. This will cover Substitutions, Connected Substitutions and sales on MarketPlaceClause 20.

Prepayment / Redemption

The terms of prepayment and redemption.These terms have now been moved to the Appendices for each of the products. There are no changes to the terms and conditions. 
Consequences of non-payment on the Scheduled Repayment DateTo create transparency, we have specified the consequences of non-repayment on the Scheduled Repayment Date, being that there will be a fee of £250 plus VAT, the Reduced Interest Rate will cease to apply and the Standard Interest Rate will apply, and if the full Outstanding Amount is not repaid within 60 days of the Scheduled Repayment Date the Loan will become Impaired and enforcement proceedings will be initiated.  For the avoidance of doubt, non-payment was always a breach of the loan terms and conditions, however previously each case was considered on a case-by-case basisClause 21.2

Minimum Lending Amount

Minimum amount reducedNow £20,000Clause 4.3.6

Green Lights

Folk2Folk undertakes an approval process, for its own benefit. We have removed the clauses. The description of our internal ‘green light’ approval processes was too lengthy and unnecessary within the General Terms & ConditionsDefinition of IBC removed.
Clause 4.3.8, 4.3.9, Clause 8, Clause 9, Clause 10, Clause 11.

Green Light Lending

Automatic LendingThis was a process by which a Lender could be put into the next available loan. Currently green light lending is unavailable, and so all references deleted.Clause 10

Payments

Standing OrderExpress reference to Folk2Folk’s use of Standing Orders has been insertedClause 6.2.1
Interest payments Standing Order will be used by Borrowers to pay their Interest to Folk2Folk. Previously it indicated that Direct Debits would be used.Clause 16.6
Interest RateThe Interest Rate will now be 4% above the Reduced Interest Rate for all new loans. This will not apply retrospectively.Offer Letter

Credit References

Credit reference agencies expandedThe named agencies are extended to include Call Credit and others.Clause 4
PaymentsInserted confirmation that identity and fraud checks will be carried out on third parties.Clause 28.1
Credit and Regulatory ChecksPreviously checks were limited to Anti-Money Laundering and Credit. We have expanded these checks to include all checks required/advised for compliance with current regulations. For example, will include PEP (politically exposed persons) checks.Clause 28.2

Lenders Fees

New AppendixThe Fees are still noted throughout the General Terms & Conditions but are now also consolidated in a new AppendixAppendix 2

Other

Removal of Folk2Folk GuideWe no longer have a Folk2Folk Guide so all references have been removed.Clause 2
Becoming a BorrowerIt is not possible for an ISA to be a Borrower, so reference removedClause 4.2
Becoming a LenderMoved the use of “business address” to more suitable clauseClause 4.3
 The terminology used for the regulatory restrictions on Lenders with FCA authorisation using Folk2Folk’s platform was outdated.  The wording has been updated accordingly.Clause 4.3.3- 4.3.5
Examples of the Loan typesThe description of what loan monies are invested in/used for has been deleted. This was more of a product description, and not required in the General Terms & ConditionsClause 6.3
Connected SubstitutesClarified terms of Connected Substitute, as we understood that our clients felt that the clauses referring to Connected Substitutes could be made clearerDefinitions pg 3
Clause 15
Interest We have made it clearer that whilst monies are held in Panel Firm of Solicitors client account OR Folk2Folk’s client account, no interest will accrueClause 16
Costs in enforcement actionClarified clause 17.4, as we understood that our clients felt that the clauses referring to Folk2Folk’s costs in any enforcement action could be made clearerClause 17.4
Document deliveryFor consistency any communication received by Folk2Folk or any Participant shall only be deemed to be delivered 2 days after posting OR the date it has been delivered to the address.Clause 25.5
Abortive CostsThe Abortive Costs will now be the legal costs PLUS Folk2Folk Costs. Folk2Folk’s costs shall be the greater of £1500 and 1% of the Loan Amount.Appendix 1
Definitions pg 5
Loan Summary/Lender Portal Information SummaryExpansion and clarification of information about Borrower, loan and property.Appendix 4

 

View the previous changes to our Terms and Conditions (last updated 12/01/17)

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