General

Frequently Asked Questions

General

What is marketplace lending?

It's an exciting new way for people to borrow money from other people. The people providing the funding are investors who would like to loan money to creditworthy borrowers.

Borrowers get the recognition for their good credit behaviour by saving with better rates. For investors, it offers an opportunity to invest in a new, attractive fixed income asset class.

How are you different from 'payday' lenders?

'Payday' lenders are generally lenders of last resort. In return for access to short-term credit (about 30 days) and loans that are typically of small nominal value, payday borrowers pay extremely high fees and interest rates.

SocietyOne is not a payday lender. We look for creditworthy, quality borrowers who typically have established relationships with major banks. Our loans range up to 60 months, from $5,000 to $50,000, which does not fit with the definition of a payday loan. We think quality borrowers with good track records are not getting the best rate they deserve.

How is marketplace lending different from a bank loan?

SocietyOne is not a bank and will not become one. Marketplace lending provides a different and interesting alternative for creditworthy borrowers and fixed income investors to get a better deal. Part of the attraction is that it can provide better rates and returns without the infrastructure cost and complexity that comes from being a traditional bank or deposit-taking institution.

What’s the difference between variable and fixed rate loans?

SocietyOne offers fixed rate personal loans – which means the interest rate doesn’t change during the term of your loan so your repayments will remain the same. In addition we don’t charge early repayment fees if you want to pay off your loan earlier than you originally expected. Variable rate personal loan interest rates may go up and down during the loan term.

What’s the difference between a secured and an unsecured loan?

SocietyOne offers unsecured loans. That means that you don’t need to provide a deposit or security against the loan in case of default.

Secured loans require you to deposit something of value to the lending institution and this becomes the collateral or security until the loan has been repaid. Examples of collateral include your home, a car, investments or other assets that can be sold by the bank if the loan is unpaid. If the sale doesn't cover the full amount of the loan, you will have lost your asset and still owe money! Secured loans are often lower as they provide less risk to the lender.

At SocietyOne we can offer lower unsecured rates for customers with good credit as this also lowers risk for our investors.

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