Why is there a difference between the borrower and investor rate?

As is standard in marketplace lending, there is a difference between the rate paid by the borrower and the rate paid to investors. This is a servicing fee paid for by the borrower through the course of the loan. This borrower fee does not have any implications for investors’ personal tax positions. Personal tax liabilities for investors, if applicable, will be based on the target income return rate specified. As with investor cashflows, CrowdProperty receives this cash at the end of the loan when it is paid. In the unlikely event that the platform winds-down, this structure works well as this end-of-loan cashflow is ample to cover the costs of managing outstanding loans through to ensure repayment of capital and interest owed to investors.