In order to ensure that P2P platforms do not accidentally take on the role of a principal/lender, loans in arrears will see all interest obligations accrue to the benefit of lenders.
Whilst in some situations this may mean a delay in the receipt of interest payments for lenders (i.e. where a borrower is in arrears on interest) this removes any ambiguities from the business models of P2P platforms.
However, appropriate risk management processes followed by lenders such as proper diversification should help reduce overall risks.
During the first 180 days of a loan being overdue, interest will accrue and will be credited on repayment or re-negotiation of the loan.
For information on the action we take when a loan becomes 'non-performing' please see our Collections and Recoveries policy.