Updated Loan Conditions and Terms and Conditions

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Michael Lawther
19th April 2016

We’ve made some key updates to our Ts & Cs and Loan Conditions

As part of our continual effort to improve and strengthen our platform and the experience of our users, we have recently updated our Loan Conditions and platform Terms and Conditions. It is important to be aware of both documents, as the Loan Conditions form part of the Loan Agreement and dictate the contractual agreement between Lenders and Borrowers, and the Terms and Conditions govern the relationship between you (as a Borrower or Lender) and rebuildingsociety.com.

Here, we will take a closer look at the updated changes and see how they pertain to you as a Borrower or a Lender on our platform.

Terms and Conditions

As well as terminology changes in line with new FCA terminology, for the convenience of our users, we have now placed direct links to the Financial Ombudsman’s Service and the new European Commission’s Online Dispute Resolution service in clause 33.3 and 33.4 respectively.

Clause 17.4 has been updated and now more clearly details the transfer of the Loan from the Transferor to the Transferee and the accrued interest on the capital outstanding, which belongs to and is paid to the buyer of the Loan.

In line with our responsibilities to prevent fraud and money laundering, we have also inserted Clause 29, pertaining to credit decisions and also the prevention of fraud and money laundering. This clause allows us to use credit reference and fraud prevention agencies to help us make a decision. By confirming their agreement, lenders and borrowers accept that we may use their information in this way. More information on credit reference, anti-fraud and money laundering agencies and how this information may be used is detailed here.

Loan Conditions

The new Loan Conditions streamline and bolster the recovery process for defaulted loans as well as containing updated terms for the repayment of loans, interest accrued and terminology changes.

In terms of repayment obligations, Clause 5.1 has been updated to now specify that the first repayment needs to be made 30 days from the closure of the auction rather than the advance date. This enshrines the date of the first repayment and increases our legal capacity to enforce first repayment on this date.

Further enhancements on the subject of early repayments include an expansion of clause 7.2.2., which now specifies that should a loan be redeemed early but less than 8 days prior to the next repayment due date, the Borrower will incur a further month’s interest. Clause 7.4 also now provides express clarification that Early Repayments do not entitle the Borrower to any rebate in amortised interest.

Critically, the new Loan Conditions grant an increased scope to call in a loan if needed to begin our recovery process and the legal enforcement of security.

Clause 8.1.1. now gives us the right to call in a loan where even one repayment is late. This strengthens our powers in dealing with defaulted loans and late repayments, and allows us to commence our legal recovery process and enforcement of loan security even earlier, in order to maximise any potential recovery as quickly as possible in light of a Borrower’s responsibilities to other creditors.

Clause 15.1.2 inserts a new clause imposing a contractual duty upon Borrowers to provide rebuildingsociety with such information as it may reasonably request about the business and affairs, the Borrower’s financial condition, their ability to pay and compliance with the Loan Agreement.

We have also further expanded the definition of a ‘Default Event’ to include material adverse change or the likelihood of change to the financial position of Guarantors.

Other changes include terminology changes in order to be consistent with new FCA terminology, and we now have a provision in place to charge the difference in interest where a borrower wishes to change their repayment date during the life of the loan.

The updated Business Loan Conditions will be incorporated into new Loan Agreements and will be binding upon all new borrowers going forward.

These changes were primarily made as part of our continued dedication to the experience of you as a lender, and enhance existing rights as well as granting new rights pertaining to loan repayments and the process involving late repayments and defaulted loans.

The full version of our updated Business Loan Conditions can be found here and lenders are encouraged to read these as well as our Terms and Conditions in full before agreeing, to inform the terms which govern the relationship between you (as a Borrower or Lender) and us.

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