Harmoney increases fees for investors
Harmoney investors are set to pay more for the peer-to-peer lending service.
Thursday, May 12th 2016, 3:45PM
by Susan Edmunds
The platform has announced changes to its fee structure, effective from June 13.
It follows a restructure of fees for borrowers last year, which reduced the platform fee but bumped up the interest rates most borrowers pay.
Harmoney founder and joint chief executive Neil Roberts said: "In order to ensure the sustainability and longevity of the platform and maintain the value we deliver to lenders and borrowers, we are now making changes to the fee structure to lenders."
He said the structure would allow Harmoney to invest in growth.
Harmoney is removing its service fee of 1.25% of principal and interest payments collected on each loan repayment and on repayments as a result of loan rewrites.
It is to be replaced with a percentage fee on interest payments.
Those with more invested in Harmoney will pay lower fees.
Roberts said the fact the fee would apply only to interest would mean Harmoney had to keep delivering returns to collect the fee.
Harmoney has so far facilitated more than $250 million in peer-to-peer lending.
Harmoney provided an example of the new fees' impact, which showed a loan with an 18% interest rate and gross interest of $8084 under the old rules would have cost the lender $573 in service and lender fees.
Under the new structure, the borrower might now pay 20%, Harmoney said. With gross interest of $8982, the lender would pay $1572 in service and lender fees.
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