LOANPAD INTEREST COVER FUND POLICY
This is our Interest Cover Fund (“ICF” or “Fund”) policy. It tells you how we operate our ICF and explains the process followed when deciding whether to make a discretionary payment from the ICF.
Please read the following carefully to understand our views and practices regarding the ICF and how we will treat it.
If you have any comments on this ICF policy, please email us at firstname.lastname@example.org.
The ICF is a ring-fenced fund designed to help maintain your daily interest payments and cover associated costs of recovery / enforcement. You can see real-time details of this Fund on our platform at any time.
The ICF is designed to cover interest payments and associated costs of recovery / enforcement only (not money you have invested in loans) and we can’t guarantee that it will cover all interest at all times.
The Interest Cover Fund we offer does not give you a right to a payment so you may not receive a pay-out even if you suffer loss. The fund has absolute discretion as to the amount that may be paid including making no payment at all. Therefore, investors should not rely on possible pay-outs from the Interest Cover Fund when considering whether or how much to invest.
The Fund is held in a separate legal entity, Loanpad Interest Cover Limited (“LICL”). Loanpad Limited (“Loanpad” or “Company”) has and will continue to provide LICL with a loan under a formal agreement.
This loan is only repayable to the Company in the event that the entire book of loans on the Platform have been wound down and there remains a surplus of funds, or as required by law.
In order to help maintain your daily interest payments, the Company may first seek that interest is either serviced or is covered by way of an increase in the loan. If neither are possible, we may use the Interest Cover Fund.
The Company may also make a request to LICL to cover interest payments for short-term loan extension and / or recovery periods.
The Company may make a request to LICL to cover costs of recovery / enforcement such as legal fees and receivership fees.
Where an asset is sold to recover a loan, the Company will apply the following order of payment for recovery of capital and fees:
- Any payments made by LICL for costs
- Money invested in loans by investors
- Any payments made by LICL for interest
- LICL service fees charged to borrowers and repayment of the Junior Tranche subject to the terms of any loan
The Fund is governed by the common directors of the Company. LICL considers each request from the Company for payment by assessing the loan, the current value of the Fund and the loan portfolio. If approval is provided, funds are made available to cover interest on the relevant loan for an agreed period of time.
Investors should be aware that part, or all, of the funds in the Fund may be utilised in the event of a Platform Wind-Down which we may initiate in accordance with clause 27.2 of the Loanpad Investor Terms And Conditions and / or by an insolvency practitioner in the event the Company were to go out of business.
If we change our ICF policy, we will post the changes on this page. If we decide to, we may also notify you via email or the Loanpad Platform.