Occasionally we send out updates to a loan, sharing details of informal extensions and re-terms. At first glance, this may seem frustrating, but the reasons for them, and the results they produce, continue to remain positive.
Extension vs Re-term
We use different languages depending on the specifics of what is happening. If a borrower is not able to pay their loan back on the date agreed, they may ask us for a small, informal extension. For example, 30 days. In this case, the loan would be deemed to be in arrears (as the agreed redemption date will have passed).
In the case of a re-term, this is a formal request for an extension - typically 3 months and longer. In such cases, we perform our always-high levels of due diligence and consider the request on its individual merit. Once agreed upon and the formal extension is confirmed, the loan is then deemed to be performing as it should be.
What is Kuflink's default rate?
We publish all our statistics, updated monthly, at www.kuflink.com/statistics. You may notice that our default rate appears higher than some competitors — that's because we report loans as in default when they are one calendar month past a missed payment, with that payment still outstanding.
Many platforms use the FCA’s regulatory definition, which classifies a loan as in default only once it is more than 180 days overdue. For relatively short-term bridging loans (typically 3 months or more), we believe the 180-day threshold can obscure the true risk profile. Our approach gives investors a clearer, earlier view of loan performance.
What if...?
Ultimately, our loans are asset-backed, and that means every single one of your investments is secured on fixed charge (e.g. property) and/or floating charge* - and even then, we only allow a maximum 75% LTV (Loan to Value). In the most extreme circumstances, if a borrower is ultimately unable to repay their loan. In the highly unlikely event that we were only able to achieve 75% of the RICS-approved valuation at auction (notwithstanding associated costs), our aim is to try to return investors capital in full.
Lender/Investor Risk Warning
* Don’t invest unless you’re prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 mins to learn more.