Why is there a difference between the borrower and lender rate?

Back to Articles 6 March 2025 1 minute read

As is standard in marketplace lending, there is a difference between the rate paid by the borrower and the rate paid to investors. This is a servicing fee paid for by the borrower through the course of the loan. This borrower fee does not have any implications for investors’ personal tax positions – personal tax liabilities for investors, if applicable, will be based on the rate up to 9.5% . As with investor cashflows, CrowdProperty receives this cash at the end of the loan when it is paid. In the unlikely event that the platform winds-down, this structure works well as this end-of-loan cashflow is ample to cover the costs of managing outstanding loans through to ensure repayment of capital and interest owed to lenders.

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