Flexible peer to peer lending & borrowing

We are keen to avoid jargon but sometimes it’s just unavoidable so here are explanations of some of the terms used on the site. Please let us know if you come across any other terms that you think we should include here.

Anti-Money Laundering

Anti-money laundering is a term used to describe the legal controls that require financial institutions and other regulated entities to prevent, detect and report money laundering activities. Money laundering is the process of concealing the source of money obtained by illicit means.

Annualised Rate

Interest that is calculated under the assumption that any interest paid is combined with the original balance and the next interest payment will be based on the slightly higher account balance. Overall, this means that interest can be compounded several times in a year depending on the number of times that interest payments are made. In our case, payments are made monthly so there are always twelve compounding occasions.

Annual Percentage Rate

The annual interest rate that is charged for borrowing, expressed as a single percentage number that represents the actual yearly cost of funds over the term of the loan. This includes fees and charges associated with the transaction. In our case we include the flat rate loan fee and the percentage loan fee. We do not include the cost of any optional additional services such as change in instalment plan fees, money transfer or late payment fees.


Annual Percentage Rate


The number of repayment instalments that are past their due date. Arrears is quoted by the number of months’ payments that have been missed. Therefore a borrower who has missed three monthly instalments is three months in arrears.

Bad Debt

A loan that has entered default and has not been paid back by the borrower

Bad Debt Relief

It is now possible to offset losses suffered on unpaid peer to peer loans against interest earned on other peer to peer loans. This referred to as Bad Debt Relief.

Bank Base Rate

The rate at which the Bank of England lends to the discount houses, which effectively controls the interest rates charged throughout the banking system

Bank Account Verification

One of the security checks conducted by Madiston LendLoanInvest is the Bank Account Verification where a small amount of money is deposited in a bank account with a reference number that needs to uploaded to the site to confirm bank account ownership.

Change Instalment Plan

Change Instalment Plan (CIP), enables borrowers to pay a lump sum to repay the loan in full.


Client Money Account, the segregated or ring-fenced bank account for holding customers' money separately from the company’s or site’s money.


Credit Reference Agency

Credit Reference

A credit reference or credit report includes information about an individual's previous credit history and is produced by the credit reference agencies to enable credit decisions to be made about potential borrowers.

Credit Reference Agency

Credit reference agencies give potential lenders a range of information about potential borrowers, which lenders use to make their decisions. The information shared may include information about an individual's previous credit history. CRAs hold certain information about most adults in the UK. This information is referred to as a credit reference file or credit report. The three main consumer credit reference agencies in the UK are Callcredit, Equifax and Experian.


Debt Collection Agency

Debt Collection Agency

A Debt Collection Agency is a business that pursues payments of debts owed by individuals or businesses.  

Debt Repayments v Income Factor

As a responsible lender, we review loan applications to assess affordability. Debt Repayments v Income Factor is a key affordability measure and it is sometimes referred to as the DTI (Debt to Income) Ratio. It is the ratio of the amount each month that goes towards repaying all the borrower's debts, to the borrower's monthly net income.


When four or more monthly repayment instalments on a loan have been missed and arrears have accumulated


Adding money to a holding account at Madiston LendLoanInvest. Sometimes referred to as "In Payment"

Effective Rate

 The Effective Rate or the Effective Interest Rate is the interest rate on a loan or financial product restated from the nominal interest rate as an interest rate with annual compound interest payable in arrears. It is used to compare the annual interest between loans with different compounding terms (daily, monthly, quarterly, semi-annually, annually, or other). It is also called effective annual interest rate or annual equivalent rate (AER).

Financial Services Compensation Scheme

The Financial Services Compensation Scheme (FSCS) is the UK's statutory fund of last resort for customers of certain financial services firms. The FSCS can pay compensation to consumers (currently up to a limit of £85,000) if a qualifying financial services firm is unable, or likely to be unable, to pay claims against it. Please note that Madiston LendLoanInvest and other P2P platforms are not covered by the FSCS.


Financial Conduct Authority


Financial Services Compensation Scheme


Her Majesty's Revenue and Customs

Holding Account

Where lenders' or borrowers' money is credited or debited with deposits or withdrawals. The money is held in a segregated account not forming part of the assets of Madiston LendLoanInvest but belonging to the individuals themselves.

Identity Checks

The checking process to verify that a person is really who they say they are

Loan Term

The period during which repayment of the loan takes place, which can be from 12 to 60 months

Loan Payment v Available Income Factor

As a responsible lender, we review loan applications to assess affordability. Loan Payment v Available Income Factor is a key affordability measure. This is the ratio of the loan's monthly repayments to the borrower's monthly disposable income.


Not yet deducted (used in the lending dashboard to describe the status of fees)

Personal Savings Allowance

From 6 April 2016, if you're a basic rate tax payer, you'll be able to earn up to £1,000 in savings income tax-free and higher rate tax payers will be able to earn up to £500 tax-free.

Qualifying Loans

Qualifying Loans are those loan parts that "qualify" to be sold on the Secondary Market. Non-qualifying Loans (can't be sold on the Secondary Market) are those where:

i) an instalment is due and/or will be processed during the listing period and sale process;
ii) there is or will be at any time during the listing period and sale process, only one instalment repayment outstanding;
iii) the loan is showing an overdue or late repayment
iv) fewer than 2 monthly repayment instalments have been made by the borrower on the loan.

Secondary Market

Lenders may request to withdraw funds early that are already committed in loans. Subject to 1) the availability of “Qualifying Loan” slices to the value of requested withdrawal and 2) lenders available to buy them, these loan slices will be put up for sale on the Secondary Market to satisfy the withdrawal request.


Withdrawing money from your holding account at Madiston LendLoanInvest