Unbolted Review

Unlike other consumer lending platforms such as RateSetter or Lending Works which focus on unsecured consumer lending, Unbolted focuses on secured consumer lending (pawnbroker style lender).

If you are looking for an Unbolted cashback offer on your initial investment, you will be disappointed to hear that the platform has not offered a cashback deal for a number of years. However, there are a range of platforms which do offer cashback (see our P2P cashback page), including RateSetter and Lending Works.

Unbolted - Secured Consumer Lending (Pawnbroker)
Unbolted P2P

Name: Unbolted

Description: Unbolted is not currently running a cashback promotion.

  • Returns
  • Safety
  • Time in business
  • Hands off investing

Summary of key features

The key features of the Unbolted investment account are listed below.

Launch date2014
Estimated annual returns6 - 10.0%
Loan securitySecured (personal assets, retained by Unbolted as collateral)
Provision fund
Early exitX
Auto re-investment
Innovative Finance ISA
FCA regulationAuthorised
Cashback offerN/a
Sign-up linkSign-up

Detailed Unbolted Review

The Unbolted platform first launched in 2014 and has grown such that it now holds relationships with a number of online auction platforms (e.g. ForumAuctions). These partnerships enable Unbolted to offer both ‘bid now, pay later’ loans alongside sale advance loans.

The ‘bid now, pay layer’ loans allow auction participants to bid on items without having the upfront cash. Unbolted will advance up to 70% of the hammer price, enabling buyers to pay up to six months later. The auction partner covers the interest repayments for the first three months and the buyer does not take possession of the asset until payment is made.

Sale advance loans enable sellers to receive 40-50% of the auction reserve upfront. The loan is secured against the asset, and the capital/associated interest is deducted out of sale proceeds.

These partnership arrangements provide Unbolted with a steady flow of new debt investment opportunities. Investors can opt to manually invest in specific loans or select auto-investment criteria.

In addition to sourcing new opportunities via the auction house relationships, individuals can contact Unbolted directly to arrange personal asset bridge loans or small business loans. Regardless of the loan type, the common theme is that loans are all secured against underlying personal assets.

What interest rates are expected when investing via Unbolted?

Given the short term nature of the lending, Unbolted quotes interest rates on a monthly basis.

Monthly interest rates vary as follows, depending on the type of loan:

  • 0.65% monthly for gold loans (secured against pawned gold or silver assets, valued at bullion prices).
  • 0.8% monthly for standard/business loans made against all other luxury assets.
  • 1.0% for working capital loans made to dealers of used luxury watches.

The interest rates quoted above are correct at the time of writing, but as always, do your own research with regards to any changes in the quoted rates prior to investing.

Investors with large sums of money invested in Unbolted may find that cash drag impacts on returns due to the volume of new loans released on the platform. Cash drag is the negative impact where un-invested money has a negative overall effect on returns.

For example, when I invested a small initial investment of £200, it took 15 days for the auto-invest feature to allocate my funds to loans.

How safe are investments made with Unbolted?

As mentioned, loans on the Unbolted platform are all secured against underlying personal assets.

Gold loans – Unbolted lends based on the price of the gold/silver bullion at an LTV of between 70 and 80%. As a result of the nature of the underlying asset, these loans are considered lower risk and therefore no provision fund exists.

Provision Trust loans (on all other loan types) – Unbolted operates a provision fund which can be utilised to cover any shortfall in the recovery of the loan principal on the sale of a pledged asset. It’s important to note that this fund cannot be considered a guarantee as it remains subject to sufficient funds being available.

The other risk is that Unbolted goes out of business – see further commentary in this regard later in the review.

How frequently is interest paid on the money I invest?

Interest on funds invested is paid monthly, at different points in the month, depending on the underlying loans you have invested in.

How good is the website reporting?

The investment dashboard is fairly simple. Upon logging in, you are greeted with a page which states your total portfolio value and your total interest paid and accrued to date.

You can then see a full list of your active investments with basic information: type of loan, start/due date, total loan outstanding, interest rate and your investment stake.

Clicking the individual loan reference takes you to a page which provides some further detail including:

  • Full description of loan
  • Borrower description
  • Loan to value (‘LTV’)
  • Monthly interest rate
  • Overview of other active loans to the same borrower
  • Overview of previous loans made to the same borrower

Functionality also exists to view a summary list of overdue loans and to generate tax statements summarising your taxable income for the year.

Is money invested in Unbolted protected?

Unbolted is the trading name of Open Access Finance Limited, which itself is authorised by the FCA (link). Authorised status does not mean that money invested is covered by the FSCS protection scheme which applies to banks, building societies and credit unions only. However, it does provide some comfort as authorised firms must comply with client asset rules which set out how firms hold and control client money.

The two key risks are 1) the underlying borrowers fail to make repayments on time and 2) Unbolted itself goes into administration. Safeguards exist with regards to both scenarios.

Risk of borrowers not repaying on time – This risk can be reduced via 1) diversification of funds across many loans, 2) existence of a provision fund and 3) security and possession of the secured asset which can be sold to recover funds should the borrower default.

Risk of Unbolted going into administration – This presents the biggest risk in my opinion. If Unbolted ceased trading, your underlying loan investments would remain legally binding. Unbolted is required (as a result of its FCA authorisation) to have an appointed back-up service provider who would take over administrating the loans if Unbolted were to fail.

How easy is the sign-up process?

The sign-up process was quick and easy. You just need to go through the standard security checks which in my case was painless.

How can I pay money into my Unbolted account?

Deposits into your Unbolted client account are made via bank transfer. There is no option to add funds via debit card at this time.

Does Unbolted offer an IFISA?

Yes – you can invest in an Unbolted IFISA. Remember, you can only open one IFISA account per tax year.

What cashback does Unbolted offer new investors?

There are no current cashback or ‘refer a friend’ offers in place for Unbolted. No offer is imminently expected as Unbolted has not had any new investor offers for a long time.

Lending Works and RateSetter are two consumer-focused platforms which do offer cashback.

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