How do interest payments work?
As an investor you will receive an agreed interest rate, paid monthly (depending on the loan agreement).
There are no costs or fees deducted from this, neither are there any setup costs when you begin investing with us. It’s that simple!
Your pre-determined interest rate already has allowance for a small margin retained by us, which is disclosed with each investment opportunity. That means the full amount of interest rate is yours with no further deductions, other than tax.
All our loans are interest-only (not principal and interest, like a regular home loan). You have the choice of different investment opportunities, depending on what is available at the time. Our lending agreements with borrowers can include:
- Fully serviced payments (most common) – paid monthly
Borrowers pay their loan interest in a regular basis (weekly/fortnightly/monthly). In turn we pay you, our investors, monthly, on the next business day after the monthly anniversary date of the loan advance.
- Compounding interest/capitalised interest – paid at end of term
Borrowers don’t make interest payments during the term of the loan. Instead, all interest is collected when the loan is repaid. In the interim, interest capitalises (adds) to the loan each month. For investors, we do the same so your investment compounds and your total funds (principal and added interest) are paid when the loan repays. The total loan amount includes all the interest that would be payable for the term of the loan
- Retained interest
Funds to service the interest payments for this loan have been added to the loan amount and then retained by the SCP in the trust account. The loan interest payments due are paid monthly from the trust account and all investor interest payments will be made from these funds on their due date.