Fixura Launches International Lending
Finnish Fixura launches investing options for people living in other countries.
Here is the press release:
In July 2012 the Finnish P2P-lending website Fixura opened up the possibility of investing in Finnish loan applications for people living in other SEPA-countries. The AAA rated country Finland is known for low crime, one of the highest living standards and the country has for many years had the highest education levels in the world.
Since the start just over two years ago, Fixura has delivered €5 million in consumer credits. The monthly amount of loan deliveries is now more than 600 000 euros and the average loan is 3000 euros with a 36 month running time. An average annual return of 10.6 % has been paid to investors. Although there has been no marketing abroad yet, several hundred thousand euros have already been invested from outside of Finland.
Borrowers can chose their own terms for the loan such as amount, length and the interest rate they are willing to pay. They all go through a credit check which gives them a 1-5 star rating, where the five star borrower is the least likely to go into a default. If a borrower has a bad credit history he or she does not get their application published on the website.
Investing With Fixura
The first investment an investor makes must be spread into at least ten different loan applications. Contracts are made anonymously but between the lenders and the borrowers directly.
If an installment does no get paid after reminders, Fixura will automatically transfer the installment to a debt collection agency and if over 6 % of the loan is unpaid, the borrower needs to pay the whole amount of the remaining loan at once or make a new payment plan with the collection agency. If the borrower still does not pay the case will be brought to court. The loan is then being collected by the government for up to 15 years. According to statistics, Fixura expects the default rates to be under 7 % in the end.
A Loan Portfolio That Handles Itself
Since June 2011, investors have got the option of building an automated and optimized loan portfolio called Autoinvest. Autoinvest automatically invests in loans according to criteria set by the investors. If Autoinvest cannot find any suitable loans the investor can chose another set of options for investing.
When the monthly installments are paid back, Autoinvest automatically re-invests the installments and the interest in new loan applications. It also spreads the risk as much as possible, investing in 100 to 2 000 euro parts of loans. The maximum amount per loan is determined by the size of the investor portfolio.
Borrowers With A Higher Credit Rating
New in September, 2012 is the possibility for borrowers to invite guarantors to raise their credit rating by backing up their loan. They guarantee that the loan gets paid by signing an agreement that they are also 100% responsible for that the borrower pays back the loan. If the borrower fails to pay more than six per cent of the total loan remaining, the guarantor is obligated to pay the whole amount at once through an external debt collection agency (or make a payment plan with a maximum of 12 installments).
The upside for the borrower is that by raising the credit rating, he/she will most likely get a lower interest rate and there is in general a higher chance of getting a loan. For the investors this means that there will be more borrowers available with higher credit ratings and subsequently, safer returns.
Options For Borrowing:
Loan amounts: €2 000 – €10 000
Interest rates: 6 % – 32 % (12,85 % – 49,35 % incl. fees & administration)
Length of the loans: 12 – 60 months