Risk Information


We’d like to draw your attention to the following risks associated with secured lending through a Peer-to-Peer platform. If there’s anything you don’t understand, please contact us. 



  • Your capital is at risk.
  • Peer-to-Peer lending is not covered by the Financial Services Compensation Scheme (FSCS).
  • We try to mitigate risk to our Lenders by securing the loan against property and by only lending up to a maximum of 60% of the forced sale value of the property.
  • Under normal circumstances, this product will provide you with a return of 6.5% or 5.5% on your investment per annum but paid monthly in equal instalments. However, there is no guarantee.
  • Your Borrower may repay the loan earlier than the anticipated end date. If this happens you can choose to go back on the Lender waiting list, or you may wish to check MarketPlace for loans for sale.
  • If your Borrower is unable to meet monthly payments temporarily, you will not receive your interest payments until they start paying again. The missed interest payments will still be due to you and will rise to a higher interest rate (see General Terms & Conditions).
  • You can’t rely on FOLK2FOLK’s case review alone but should do your own due diligence before investing in a loan.
  • You’re investing in a loan to a Borrower. The capital amount repayable by the Borrower won’t rise in value in the way some other investments might.
  •  Your investment is a loan to a Borrower and is secured against their property but it is not an investment in property and therefore won’t benefit from rises in the property market.


  • If your Borrower defaults and there is an extreme downturn in the property market, there’s a risk that there may be delays in selling the property, against which the loan is secured, to repay your loan. There’s also a risk that the sales proceeds are insufficient to pay back your loan in full.
  • As a Lender, you should be aware that if a loan falls into arrears or defaults there’s a risk that the Borrower may not pay interest (in full or part). The outstanding amount will be deferred until the loan status has been repaired or (if required) enforcement action concluded with the security being sold. Please note that whilst our loans don’t exceed a 60% Loan to Value (forced sale), it is unlikely, but there is a risk that the sale of the security property may not release sufficient funds to repay all the outstanding interest and capital sum.
  • Borrower’s defaulting on their loan payments is a possibility with a peer-to-peer loan. View defaults record.


  • FOLK2FOLK loans are illiquid assets and although as a Lender you have the right to sell your loans on MarketPlace, this is dependent on the availability of a buyer for the loan after 6 months. If your loan were to fall into arrears or default you can’t offer your loan for sale on MarketPlace and you’d need to wait for the loan situation to be repaired or the defaulted loan recovered.
  • There is no right to cancel your investment in a loan since it is an agreement secured on land.

Interest rate

  • The interest rates applicable to your loan are fixed interest rates and are set out in the loan documentation applicable to your loan. This means that the interest rate you receive won’t increase or decrease if market interest rates change.

Risk of failure of FOLK2FOLK

  • FOLK2FOLK Limited is authorised and regulated by the Financial Conduct Authority (FCA). We’re required to maintain a certain level of regulatory capital. This means that there should always be sufficient capital for an orderly wind-down of the company.
  • If FOLK2FOLK Limited were to stop operating, although there would be no new loans, the existing loans would be passed to a standby servicing company that would ensure that the administration of existing loans continued until maturity or until Borrowers repaid.

Mini Guide to P2P Lending

For more information about what you should consider before investing via a peer-to-peer platform please read our Mini Guide to P2P Lending.


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