Kuflink

Kuflink is a UK peer-to-peer lending platform that lets individuals lend money to property borrowers, mainly through bridging loans secured on UK property. Founded in 2011 as a bridging loan company, it launched its online peer-to-peer platform in 2017 so that everyday investors could fund those deals¹. Its two investment routes are Select Invest, where you choose individual loans, and the Select IF-ISA, which wraps the same kind of lending inside an Innovative Finance ISA so that interest is paid tax-free¹.

This is a high-risk investment, not a savings account. Kuflink's own risk warning is blunt:

Two things matter especially. First, Kuflink has removed its first-loss cover and interest top-ups, so it no longer absorbs any portion of investor losses³. Second, money once invested is not covered by the Financial Services Compensation Scheme (FSCS)⁵. Money waiting in your Kuflink wallet is held separately as client money, but lent money is at risk if borrowers default.

What Kuflink offers: Select Invest and Select IF-ISA

Kuflink describes itself as a direct lending platform with a loan management service: investors lend directly to borrowers, and Kuflink administers the loans, chases payments and manages the security⁴. The lending is property-backed, and Kuflink states that its deals are secured against UK property⁷. The company has been profitable since 2020 and its group accounts have been independently audited since 2014, according to its own site¹.

The main choice for an investor is between two wrappers for the same underlying lending:

• Select Invest: you pick the individual loan deals you want to fund, and interest is paid to your wallet or rolled up, depending on the option you choose¹.
• Select IF-ISA: the same kind of lending held inside an Innovative Finance ISA, so interest is tax-free. Kuflink says its IF-ISA is available to new investors or those transferring in funds, with the option to invest up to £20,000 per annum tax-free, the standard yearly ISA allowance². Full details are on our page about the Kuflink Innovative Finance ISA, and the general rules are in our guide to ISAs.

Kuflink also runs occasional promotional offers, such as a cashback boost paid into your wallet at the end of an investment term. These cannot be combined with other promotions, and Kuflink reserves the right to withdraw them at any time without notice⁸. Treat any promotion as a bonus rather than a reason to invest.

Before you can invest, Kuflink requires you to pass an appropriateness test to confirm you understand the risks of peer-to-peer lending⁶. Retail investors are advised not to put more than 10% of their net assets into high-risk investments such as P2P agreements⁶.

How Kuflink loans work and how interest is paid

When you invest, you are tied in for the duration of the loan term. Interest is paid into your wallet during the month in which your investment term ends, or added to your capital if you choose to roll over your investment¹. Kuflink handles the work of assessing the deal before you lend: credit checks on borrowers, loan pricing, and valuation and searches on the properties⁶. Once the loans are running, the loan book is monitored daily by its in-house collections team¹.

Kuflink offers a simple interest option, paid as described above, and a compound interest option. With compounding, the interest is not paid out as it arises. Instead, it is calculated and becomes payable upon a triggering event involving a reduction of your capital: a part repayment on a pro-rata basis, a full repayment, or the sale of your loan part on the secondary market¹⁰. Because the interest rolls up rather than being paid monthly, the effective annualised return over a term is slightly higher than the headline rate. Kuflink's own worked example, on its support site, shows the extra earnings compounding produces over a 12-month term¹⁰. The important condition is that compound interest, like simple interest, is only actually paid if the borrower pays³.

One structural point is worth understanding. Investors lend directly to borrowers, so you hold contracts directly with the borrowers, not with Kuflink. Those contracts continue to exist even if the platform itself goes into administration¹¹. That is a genuine protection of sorts, but it also means the outcome of your investment depends on the borrower and the property security, not on Kuflink's own finances.

Kuflink has removed its first-loss cover and interest top-ups

Historically, some peer-to-peer platforms cushioned investor losses with their own capital, known as a first-loss cover, or topped up interest payments from their own funds. Kuflink no longer does either. Its terms state that it no longer maintains any form of first-loss cover on loans where the borrower has defaulted, and that it has permanently withdrawn loss cover and discretionary reimbursement⁴. Its risk summary says the same: Kuflink has removed internal interest top-ups and subsidies, no longer absorbs any portion of investor losses, and does not contribute first-loss capital to future investments³.

This changes what a default means for you. If a borrower fails to repay and the property security has to be enforced, you bear your share of any shortfall yourself. Kuflink does still co-invest in the deals it offers, up to 5% of every Select Invest deal, and all deals are secured against property⁶, but a co-investment stake is not a guarantee: it simply means Kuflink holds a slice of the same risk.

If a loan's security is enforced and the property is sold, the money is paid out in a fixed order of priority, set out in Kuflink's terms⁴:

Kuflink and the security holder are paid their costs and expenses first, then the amounts due to investors, then Kuflink's own co-investment stake, and only then does any surplus go to the borrower or others entitled by law⁴. The security holder for all loans is a separate Kuflink entity that holds the property charges on investors' behalf⁴. Costs of enforcement coming off the top is one reason a secured loan can still return less than you lent.

Arrears and defaults: what happens when a borrower misses a payment

Kuflink defines arrears precisely: a loan is in arrears the day after an agreed payment has been missed, and that status continues for one calendar month if the payment remains outstanding¹². The missed payment may be a monthly servicing payment or the full repayment due at the end of the term¹². While a loan is in arrears, Kuflink engages with the borrower to understand why the payment was missed and to find a way to make the payment or agree an alternative way forward¹². Investors continue being paid interest until the loan is repaid¹².

The position changes sharply at default. Kuflink's risk summary states that it no longer pays interest to investors if the borrower fails to make payment: all interest, simple or compound, is paid solely if the borrower pays³. So once a loan stops performing, your income from it stops too, and you wait for the security to be enforced and the property sold.

For context on how defaults work in consumer lending generally, independent debt charities describe a default as arising when you miss payments on a debt and cannot get up to date within 14 days¹⁵, and a personal loan will usually default after two or three missed payments if nothing is done about the debt¹⁶. Kuflink's own timeline for its loans runs to 180 days past the missed payment before default, as shown above. Once a Kuflink loan has defaulted, Select and Select IF-ISA investments in default cannot be liquidated: funds are repaid only once the loan redeems, and no fees apply¹⁴.

Getting your money out: the secondary market and the liquidation

The core restriction to understand is that you are not able to get instant access to your funds once invested. You are tied in for the duration of the loan term unless you use Kuflink's secondary market and sell your loan parts to another investor⁶.

The secondary market is exclusive to Select Invest loans: Select Invest and Select Invest IF-ISA loan parts may be sold there, subject to terms, conditions and fees, and some restrictions apply³. You browse available loan parts from within your Kuflink account¹⁷. Two warnings matter. Sales on the marketplace are not guaranteed, so there may be no buyer when you want one¹⁷. And to access the market at all, you must have made a minimum investment with Kuflink, as defined by Kuflink from time to time, and be or have been a Kuflink investor⁴. One fairness safeguard is built in: employees of Kuflink and their close family and friends are not permitted to sell within the first 48 hours of the secondary market opening for any particular opportunity, so staff cannot get ahead of the queue⁴.

There are also funds you cannot withdraw even from your wallet. If a pool is oversubscribed, unallocated funds held in the Kuflink client account waiting to be allocated to a new loan cannot be withdrawn, because they are committed to your investment in the pool; interest continues on the original investment amount, and Kuflink reserves the right to return unallocated capital and stop paying further interest on those funds³.

Closing your account has permanent consequences. Kuflink cannot reactivate a closed account, and any interest or cashback due after closure is forfeited; to use the platform again you would need a new account¹. Kuflink may also close your account if you do not lend within a 12-month period⁴.

How Kuflink's charges work

Kuflink's headline position is that it does not charge investors fees on its Auto Invest product¹, and its IF-ISA carries no platform or investment fees². Buying loan parts on the secondary market is free for buyers¹⁷. The fee for transferring an IF-ISA out to another provider is currently reduced to £0, from £35, until further notice⁴. Fees may apply to selling on the secondary market, and Kuflink's terms and product pages carry the current figures, so check those before acting³.

Transfers in work differently. You can transfer cash ISAs, stocks and shares ISAs and even IF-ISAs held with another provider into Kuflink's IF-ISA⁷. The process is: read and agree to the ISA declaration, provide your National Insurance number, then download, complete and sign the transfer form and post it to Kuflink⁷. Kuflink sends the transfer request to your existing provider within 5 business days of receipt, and your existing provider then has 15 working days to complete the transfer⁴. Kuflink gives two figures for the ISA transfers it has facilitated from leading providers: over £21m on one page and £15m on another². Kuflink can also accept Additional Permitted Subscriptions, including multiple APS transfers from other providers⁴.

Two other charging points sit in the small print. No interest is paid to you on money held in your wallet⁴. And retained interest and compound interest funds are held in a corporate account of a Kuflink group company, where the client money rules do not apply⁴.

Who can invest and how to open a Kuflink account

To open an investor account you must be an individual, a limited liability partnership, a limited company, a public body or another legal entity; UK entities must be registered with Companies House, excluding the Channel Islands and the Isle of Man⁴. Before investing you must pass Kuflink's appropriateness test, which checks that you understand the risks of peer-to-peer lending⁶. Kuflink does not offer financial or tax advice, and nothing on its platform amounts to investment advice or a recommendation to lend⁴.

A few eligibility rules sit around the edges:

• Mezzanine loans are not available to everyday investors, and Kuflink only does second charge mezzanine loans where it already holds the first charge³.
• Certified sophisticated investor status is available to lenders who have completed at least one full investment cycle, or who have invested at least twice over a period of a year⁴.
• Corporate investor accounts are for entities rather than individuals; wallet funds for corporate investors are covered by the client money rules alongside those of individuals⁴.

Your first investment carries a 14-calendar-day cooling-off right from the date of activation. After that, subsequent investments into any products carry no right to cancel⁴. Kuflink also runs annual identity verification checks; keep your contact details current so those checks do not hold up withdrawals.

When an investor dies

If an investor dies, Kuflink asks the estate's representative to contact it with a set of documents: a certified copy of the will, or for intestate cases a letter from an immediate family member stating their relationship and confirming their need to access financial information to apply for Letters of Administration; a certified copy of the death certificate; the Grant of Probate if available at the time; and a certified copy of two forms of photo ID of the executor¹⁴. If a Grant of Representation is required, the process takes longer¹⁴. In Scotland, personal representatives are known as executor-nominate when there is a will¹⁴.

Funds held in the deceased investor's wallet are sent to the nominated bank account held on the account¹⁴. For IF-ISA holders, a surviving spouse or civil partner's yearly ISA subscription can be increased by the value of the deceased's IF-ISA investment with Kuflink, but they must also have a Kuflink IF-ISA investment for this to be arranged¹⁴. A continuing account of a deceased investor ceases to be such an account at the end of the statutory period¹⁸.

Complaints about Kuflink and how to escalate them

Complaints can be made in writing to Kuflink at 21 West Street, or by email to its complaints address; its terms also give a general contact email and telephone number for raising problems⁴. Kuflink's complaints procedure sets out the timescales it works to¹⁹:

If a complaint is resolved to your satisfaction within three business days, Kuflink sends you a Summary Resolution Communication; otherwise it sends a Final Response Letter, no later than eight weeks from the date you first contact it¹⁹. An eligible complaint is one made by or on behalf of an eligible complainant, about an activity the ombudsman covers, and involving an allegation of financial loss, material distress or material inconvenience¹⁹. Kuflink states it will co-operate fully with the ombudsman and be bound by any awards made¹⁹.

If you are still unhappy after Kuflink's final response, you can refer the complaint to the Financial Ombudsman Service, which is free, and the referral must be made within six months of Kuflink's final communication¹⁹. The same escalation route applies to complaints about lenders more generally: if a firm does not uphold or even acknowledge your complaint, you can escalate it to the ombudsman²⁰. Our guide to consumer protection explains how the ombudsman process works across financial services.

Your money is not FSCS protected once it is invested

The single most important protection fact on this page: your investment is not protected by the Financial Services Compensation Scheme⁵. Kuflink's terms and risk summary both say this plainly, and its IF-ISA page repeats that capital is at risk and Kuflink is not protected by the FSCS². Holding the investment inside an IF-ISA does not reduce the risks associated with P2P agreements; the ISA wrapper changes the tax treatment, not the risk⁶.

What protection does exist covers only money waiting to be invested. Funds in your Kuflink wallet are held as client money in a segregated account with NatWest Bank Plc, with no capped limit on that safeguarding⁴. The purpose is that this money does not get lost in a liquidation of Kuflink itself⁶. Two exclusions bite: balances not yet received by Kuflink from borrowers are excluded from the client money protections, and money actually lent is no longer client money at all, it is a loan contract with a borrower¹¹. The FSCS may cover money held on your behalf if the holding bank itself became insolvent, but that is protection for the bank, not for your lending⁴.

This is the standard position for investing generally, not a Kuflink quirk. The FSCS protection people associate with savings covers the company holding your investments, not losses from the investments themselves²¹, and if you put money into unregulated or high-risk investments you will not be covered by the FSCS unless the investment was the result of negligent advice from an independent financial adviser²². If Kuflink wanted to cease trading, its wind-down plan would come into effect: it would continue to operate as an ISA manager but would stop accepting new ISA investments, would notify HMRC and all investors at least 30 calendar days in advance of ceasing to act as an ISA manager, and all IF-ISA funds would need to be transferred to another HMRC-approved ISA provider to keep their tax-free status, since withdrawing to a bank account loses the tax wrapper³. Kuflink is also required to have a resolution manual in place to help an administrator take over the running of the business¹¹.

For free, impartial help with any of this, MoneyHelper and the debt advice charities offer guidance, and the Financial Ombudsman Service handles complaints at no cost. Nothing on this page is financial advice: Kuflink itself does not offer financial or tax advice on the investments it promotes³, and whether peer-to-peer lending suits your circumstances is a decision to make with the risks above fully in view.