tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Wednesday, April 24th, 5:59PM

News

rss
Latest Headlines

Squirrel promises low rates

Squirrel Money has opened for business and is promising market-beating personal loan rates.

Monday, November 2nd 2015, 6:00AM

by Susan Edmunds

The latest peer-to-peer lender to enter the market launched at the weekend, offering a platform to match willing investors with borrowers.

Four peer-to-peer licenses have been granted but Squirrel is only the second to begin operating, after Harmoney.

Managing director John Bolton said Squirrel was different because it did not have commercial backing that Harmoney has, and is relying solely on retail investors.

Bolton said that would make the process more challenging.

“The retail market tends to be older and still have the hangover from the GFC when the finance companies went under,” he said.

“They see peer-to-peer as the next version of the finance companies so we have a bit of a job to do to build awareness and visibility in the market of what peer-to-peer is. For older people relying on their investments, bank interest rates are so low, if you have $100,000 in the bank you might get $3000 a year.  We expect to get that up to $8000 a year and we are also taking out a significant amount of credit risk.”

Squirrel offers a reserve fund, Loan Shield, paid for with the risk premium borrowers pay.  The fund underwrites credit losses and loan delinquencies.

Bolton said the platform could be expected to deliver some of the lowest personal lending interest rates in the market.  Rates are decided through a contestable bidding system.

Investors would tell Squirrel what interest rate they wanted on their money and the term they wanted to invest for, and would be matched against loan requests.

“Investors bid in the interest rate they want for their money as loans come in they will be cleared against the lowest bids.  It’s a contestable market for interest rates that will deliver a much lower rate,” Bolton said.

The investors proposing the lowest interest return would have their money lent out most quickly.

“Squirrel Money is going to have some of the lowest personal borrowing rates in the market by a reasonable margin but it relies on us getting investors into the system,” he said.

Lower rates for borrowers would mean lower returns for investors but Bolton said they were not taking the same level of credit risk as higher-interest providers and did not have to deal with the same process of choosing which loans to invest in.

“It’s being managed inside the platform through the reserve fund so there is more certainty of return.”

The site is offering indicative rates for investors of two years at 7%, three years at 7.5% and five at 8%.

Squirrel Money charges $250 for unsecured loans and $500 for secured. Bolton said that provided more certainty of return because platforms that charged a percentage of the loan repayments could end up handing investors a big bill when a loan was repaid early.

Bolton said the platform had taken 10 months to build and planning a lot longer.

Tags: Peer to Peer Lending Squirrel

« Launch date set for Squirrel MoneyBrokers refer tricky clients to LendMe »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.75 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.75 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 ▲6.89 ▲6.55 ▲6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 ▼7.29 ▼6.59
SBS Bank Special - 7.24 ▼6.69 ▼5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.29 7.29 6.65

Last updated: 24 April 2024 9:24am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com