FAQ FAQ investors

1. What to do if I forget the password? What if the password is not sent to me?

Click the "Forgot password" link. Enter the required information in the dialog b...

Click the "Forgot password" link. Enter the required information in the dialog box that appears on the screen. New password will be sent to your email address or mobile phone that you have specified when signing up. If you do not receive the new password, please call +370 687 00300 or send an email to info@neofinance.com.

2. What is the operational ground of NEO Finance?

Activity of NEO Finance is supervised by the Bank of Lithuania. In January 2017,...

Activity of NEO Finance is supervised by the Bank of Lithuania. In January 2017, the company has replaced its limited electronic money institution licence with the unlimited electronic money institution licence allowing operations in entire European Union. NEO Finance is the only P2P lending platform in Lithuania that holds the licence for unlimited activity, and also is included in three public lists of the Bank of Lithuania: List of Peer-to-Peer Lending Platform Operators, List of Consumer Credit Lenders, and List of Currency Exchange Operators.

List of the Bank of Lithuania

3. Who can invest with "NEO Finance"?

Citizens of the European Union with a valid personal document (passport or ID ca...

Citizens of the European Union with a valid personal document (passport or ID card) or valid mobile signature can invest.

4. How to invest with NEO Finance?

Please register in the account provided for the investors Perform the ident...
  1. Please register in the account provided for the investors
  2. Perform the identity verification process in the system
  3. Open a NEO Finance electronic money account
  4. Deposit money into it
  5. You can select one of two investment methods:
    • From the list of the borrower applications, select the loans into which you want to invest. In the list, you will find the specified information regarding the loan recipient: income, obligations, credit worthiness rating, position held at the workplace, previous debts, etc.
    • Set the maximum investment amount into the single loan, maturity, specify the credit worthiness ratings of the loan recipients for whom you intend to lend and the size of the interest. The system of "NEO Finance" will automatically provide the best investment possibilities for you.

Also, select whether you want to invest into loans with or without the Provision fund.

5. How do I open a user account on behalf of a child under the age of 18?

In order to create a "NEO Finance" user account and an electronic money account...

In order to create a "NEO Finance" user account and an electronic money account when the client is a natural person younger than 18 years of age, legal representatives of such person must come to the registered office of "NEO Finance", located at Verkių st. 25C-1, Vilnius, and submit the following documents and information:

1. Provide the identity documents of parents and the child under the age of 18

2. Provide the birth certificate / Court decision on the establishment of care

3. One of the parents must have a "NEO Finance" user account

4. Provide the consent for the investment on behalf of the person under the age of 18

5. Provide consent for the checking of their own personal information and for that of the child

6. Provide information about the child.

When one of the parents arrives at the registered office of "NEO Finance", the court decision verifying that the parent or guardian present has the right to represent his or her child, or the notarised power of authority of another parent must be provided. A copy of the notarised personal document of the person who issued the power of attorney must be provided as well.

The child will not be able to control the "NEO Finance" user account, but the agreements will be made on behalf of the child. All actions will be performed by the parent who will be appointed as the administrator of the child's account. We also draw attention to the fact that all funds in the electronic money account opened on behalf of the child can only be transferred to the personal bank account of the child. In order to transfer these funds into another account, court order is needed.

6. How much can be invested?

  •  From 5 euros in one loan; •  The limit for the maximum investment in...

 

•  From 5 euros in one loan;

•  The limit for the maximum investment in one loan recipient for 12 months is 500 euros. Our system will automatically ensure that this limit will not be exceeded;

7. What fees are applicable in order to invest?

No fees for the primary market for investors. However, the investor can choose t...

No fees for the primary market for investors. However, the investor can choose the provision fund service and the cost depends on the borrower's rating and the loan period.

8. How does the automatic investment work?

The automatic investment function allows the investor to preselect the criteria...

The automatic investment function allows the investor to preselect the criteria of the loans into which they wish to invest, and according to these criteria "NEO FInance" automatically concludes loan agreements on behalf of the investor when the suitable offers appear. This way the investor does not need to constantly follow and review the applications that are being submitted in the system.  Furthermore, after the new loan offer appears, all investments are made into it according to the automatic offers of the investors, and manual investments are made only into the remaining amount of the loan (sometimes there is nothing left).

How it works:

The investor selects the automatic investment and specifies the criteria of the loans that are targeted for the investment: credit worthiness rating (one or several) of the loan recipient, minimum interest, loan maturity (exact or from - to), the maximum amount that is invested into one loan and the provision fund can be selected. During the creation of the announcement the funds in your account are not reserved. The announcement criteria will be automatically checked in the system and if there are funds in the accounts, they will be invested under the specified criteria.

When "NEO Finance" identifies the loan application that meets the criteria specified by the investor, it automatically concludes the loan agreement (and the surety agreement if the provision fund is selected) on behalf of the investor. Then a part of the reserved funds is transferred to the loan recipient under the signed agreement (remuneration for the surety is also transferred from the reserved funds if the Provision fund is selected).

9. What is Provision fund?

"NEO Finance" offers the paid service of the Provision fund, reducing the risk o...

"NEO Finance" offers the paid service of the Provision fund, reducing the risk of investment further. After deciding to invest with the Provision fund, you will sign the surety agreement with "NEO Finance".  Under it, "NEO Finance" itself undertakes to provide the surety for the loan recipient. That means that if the loan recipient is late, even for one day, "NEO Finance" covers the payments directly to the investor and itself recovers them from the Loan recipient later. "NEO Finance" accumulates money in a separate account and covers the payments to the investors from this. The constantly-updated view of the account is published in the investment section of www.neofinance.com. After selecting the Provision fund service, a respective fee is applicable to the investor. The fee depends on the credit worthiness rating of the credit recipient and the loan maturity: 0.44% - 22.91% of the investment sum. All fees are accumulated in the fund, and in the case of delay, payments are covered from the funds accumulated in the Provision fund. If the loan recipient repays the loan in advance or the loan agreement with them is terminated, the fee for Provision fund is reduced in a way that the investor does not incur loss (the investor will always regain the amount they have invested).

10. What happens if the loan is not repaid?

If a loan recipient is late in paying even single payment, they are informed of...

If a loan recipient is late in paying even single payment, they are informed of this via email and text (SMS) message. After 30 days of delay, the debt of the loan recipient is registered with "Creditinfo Lietuva" PJSC and after 40 days of delay the loan recovery is transferred to the debt recovery company. "NEO Finance" recommends each investor to secure the "Provision fund" protection before investing, therefore reducing the risk of the investment.  Possible options for the recovery if the loan is overdue:

  1.  If you utilize the Provision fund, "NEO Finance" pays the payments to you as of the first day of the delay. As of the 60th-130th day of the overdue loan, the consumer credit agreement with the recipient of the consumer credit is terminated and the whole amount of the loan as well as interest that is accumulated to that day is repaid to you;
  2.  If you did not use the Provision fund, as of the 60th-130th day of the overdue loan "NEO Finance" terminates the consumer credit agreement with the recipient of the consumer credit, and after its termination offers to buy the debt from you at the market price. If you reject the offer, then the recovery of the debt is transferred to the debt recovery company, court or bailiffs. Statistically the debt recovery can last approximately 2 years, but all payments that are received are transferred to you on the same day by "NEO FInance".

The investor does not need to worry about the recovery of the loan themselves. "NEO Finance" transfers the whole pre-trial and judicial debt recovery to the debt recovery company, and the funds that are received for the debt are transferred to the investor on the same day. All the expenses of the recovery are covered by the debtor.

11. What risk is assumed by the investor?

During the evaluation of the credit worthiness rating of the credit recipients,...

During the evaluation of the credit worthiness rating of the credit recipients, "NEO Finance" has very high requirements. However, there is a possibility that the recipient of the consumer credit does not uphold their obligations and as a result, the losses are incurred by the loan provider. In order for you to make the decision to invest in the consumer credit responsibly, we provide information about the risks of such type of investments. The loan provider should understand that he assumes all risks of the credit recipient's insolvency, meaning that the credit recipient may fail to fulfil the credit agreement which may result in financial losses for the loan recipient, i.e. failure to receive all or part of the interest that had to be paid by the consumer credit recipient under the consumer credit agreement.  The provider may also not receive the full or part of the amount of the consumer credit. The loan provider should understand that, under the current legislation, the recipient of the consumer credit can return the whole consumer credit or a part thereof in advance and, as a result, the loan provider will receive less interest under the agreement than was anticipated. After deciding to invest in the consumer credits, the loan provider selects the credit worthiness rating(s) of the consumer credit recipients to whom the loans will be provided. "NEO Finance" undertakes to conclude the consumer credit agreements only with the recipients of the consumer credit, who on the day of the credit worthiness assessment day have assigned the credit worthiness rating that is specified in the special conditions. The credit worthiness rating is the expression of the consumer credit recipient's assessment result, it is graded from A - the highest level of reliability, to E - the lowest level of reliability. "NEO Finance" tries to reduce the risk of insolvency as much as possible, therefore, consumer credits are granted only to the persons with the A-C credit worthiness rating, but the loan provider must understand that risk of insolvency remains even for the consumer credit recipients with the high credit worthiness rating. The responsibility of "NEO Finance" regarding the insolvency of the consumer credit recipient is limited. "NEO Finance" is only responsible for the insolvency of the consumer credit recipient if it violated the provisions of the consumer credit recipient credit worthiness assessment and as a result has evaluated the credit worthiness of the consumer credit recipient improperly. In such case "NEO Finance" compensates the losses that are directly incurred by the loan provider.

12. Can the registration be terminated?

To be able to unregister from the www.paskoluklubas.lt/en or www.neofinance.com...

To be able to unregister from the www.paskoluklubas.lt/en or www.neofinance.com system, you must have no active investments in the consumer credits.

Contact us by phone +370 687 003 00 or via email info@neofinance.com and inform us of your request. If you have an active electronic money account, we must sign the agreement on the closing of the account, and then we will unregister you from the system. 

13. How are conflicts of interest avoided?

To avoid the conflicts of interest, neither employees of "NEO Finance", or parti...

To avoid the conflicts of interest, neither employees of "NEO Finance", or parties related to them or to a private company, may have better conditions to invest in consumer credits than unrelated persons.

14. What is the procedure for calculation of the repaid payments?

When the loan recipient makes the payment, it is proportionally distributed to t...

When the loan recipient makes the payment, it is proportionally distributed to the Loan providers according to the share of the amount they invested in the amount of the loan. The amount returned to the loan providers is rounded off to the nearest cent. The excess of the cent parts is not annulled, but is accumulated, until the addition of such amounts reaches at least one cent that will be added to the next repayable payment.

15. When is the money received from the monthly installment transferred to my account?

After consumer credit receiver makes a payment equal to the monthly instalment,...

After consumer credit receiver makes a payment equal to the monthly instalment, investors get their portion of the money no later than the following working day.

As stated in the Law on Consumer Credit, credit receiver has the right to fulfill their commitments outlined in their consumer credit agreement fully or in part. After doing so, they are allowed to request for credit price reduction. Taking this into consideration, if the consumer credit receiver makes a larger-than-required monthly instalment, they are allowed to request for interest recalculation within the upcoming 72 hours. If during the mentioned 72 hours the consumer credit receiver makes a request for interest recalculation, then, right after the interest is recalculated, depending on the amount of money invested, the investors get the adequate portion of the consumer credit and interest. In case the consumer credit receiver does not request for interest recalculation, then, after the 72-hour period is over, depending on the amount of money invested, the investors get the adequate portion of the consumer credit and full amount of interest, including future interest.

16. What taxes have to be paid by the investors to the State Tax Inspectorate?

Since the investors, who invest in loans by using the "NEO Finance" platform are...

Since the investors, who invest in loans by using the "NEO Finance" platform are not considered as self-employed, they must only pay the resident income tax for the interest they ACTUALLY RECEIVED, calculated for the financing of loans, i.e. the income is recognized as received during the moment of their actual receipt, and not on the date specified in the payment schedule.  Resident income tax rate is 15 % and is applied to the whole amount of the interest that was actually received during the period. Taxes are deducted from the receivable interest amount.

Payments of the income tax

Resident income tax for the interest paid to non-Lithuanian residents must be deducted and paid into the budget of the Republic of Lithuania by “NEO Finance”. The rate of income tax is 15 percent, therefore prior to paying the interest to the investors, “NEO Finance” will deduct 15 percent of this amount and will transfer the deduction into the budget. If Lithuania has signed the double taxation avoidance agreement with the certain country and the investor has submitted to “NEO Finance” the request regarding the rate specified in the aforementioned agreement, then “NEO Finance” would deduct the respective rate. Lithuania has signed the double taxation avoidance agreements with the following countries https://www.vmi.lt/cms/en/tarptautines-dvigubo-apmokestinimo-isvengimo-sutartys. Income tax rate of 0 percent is set with Latvia and Cyprus, and income tax rate of 10 percent are set with other countries.

We would like to note that the income tax payable in the investors state of residence can be reduced by the amount of income tax that was paid in Lithuania. If 15 percent was deducted, and according to the double taxation avoidance agreement signed between Lithuania and the other country, the tax rate is set at 10 percent, then the investor can reduce the income tax in their place of residence by 10 percent. In the event that “NEO Finance” receives the request regarding the application of the lower income tax rate, the investor can reduce the income tax in their country residence by the amount that was paid as an income tax in Lithuania.

We would like to note that when choosing the peer to peer lending platform, it is very important to make sure that the tax legislation of that country is adhered to. Otherwise the investors risk facing violations of the tax obligations, those could involve the investors themselves. “NEO Finance” advises investors to check thoroughly that the peer to peer lending platform does not violate the tax legislation of the resident country prior to investing, due to which they themselves could face the improper payment of the taxes.

17. What is a VIP investor and when do you become one?

The status of VIP investor Loan provider is awarded with a certain type of VI...

The status of VIP investor

Loan provider is awarded with a certain type of VIP investor status if his/her "NEO Finance" active investment portfolio contains following values:

VIP Bronze. Active investment portfolio contains more than € 5,000;

VIP Silver. Active investment portfolio contains more than € 15,000;

VIP Gold. Active investment portfolio contains more than € 50,000;

VIP Platinum. Active investment portfolio contains more than € 125,000.

VIP investor status provides additional benefits to investors. Using automatic investment function, VIP investors have priority over other investors. NEO Finance also provides an opportunity for VIP investors to sell the delinquent loans with the coefficient that is 10% higher than for the other loan providers, who do not have the status of the VIP investor. 

18. What are the automatic investment criteria for ordinary and VIP investors?

  Basic Bronze Silver...

 

Basic

Bronze

Silver

Gold

Platinum

Objective

Yes

Yes

Yes

Yes

Yes

Education

Yes

Yes

Yes

Yes

Yes

Age

Yes

Yes

Yes

Yes

Yes

Amount

Yes

Yes

Yes

Yes

Yes

Marital Status

Yes

Yes

Yes

Yes

Yes

Assets

Yes

Yes

Yes

Yes

Yes

Dependent number

Yes

Yes

Yes

Yes

Yes

Work experience

Yes

Yes

Yes

Yes

Yes

Family income

Yes

Yes

Yes

Yes

Yes

Sex

Yes

Yes

Yes

Yes

Yes

Invest in just one active CR loan

Yes

Yes

Yes

Yes

Yes

Age of overdue debt

 

 

Yes

Yes

Yes

Overdue debt amount

 

 

 

 

Yes

Number of notes to financial institutions

 

 

 

Yes

Yes

DTI (debt-to-income) ratio

 

 

 

Yes

Yes

DTI (debt-to-income) ratio rejecting a mortgage loan

 

 

 

Yes

Yes

Main source of income

 

 

 

 

Yes

Amount allocated to an automated ad

Yes

Yes

Yes

Yes

Yes

Minimal investment amount

 

 

Yes

Yes

Yes

19. How is recovery performed if the debtor dies?

If the debtor dies there are a couple of debt recovery scenarios. When "NEO F...

If the debtor dies there are a couple of debt recovery scenarios.

When "NEO Finance" receives information that the debtor has died, firstly, it ascertains if there are heirs (i.e. if any person accepted the inheritance). If the inheritance is accepted, further recovery is performed from the assets of the heir. Should the heir accept the inheritance under the inventory comprised by the bailiff, the recovery would be performed within the scope of the inherited assets. If the debtor had property, but did not have an heir, then the inheritance is accepted by the state, and the debt recovery is aimed at it (article 5.62 of the Civil Code of the Republic of Lithuania).

If the debtor has died without any property and the inheritance is not accepted, the debt recovery is ceased, because the recovery cannot be aimed at anything. In such case the incurred losses are assumed by the investors.

20. What costs will I incur in the case of debt recovery (without the provision fund)?

No additional fees are charged to the investor. In such case the only costs are...

No additional fees are charged to the investor. In such case the only costs are time, while waiting for the debt to be recovered.

21. What is the selling procedure and price of the payments that are not repaid, when the loan agreement is terminated?

5 calendar days prior to the planned termination of the credit agreement, "NEO F...

5 calendar days prior to the planned termination of the credit agreement, "NEO Finance" sends the notification to each of the Loan providers, who invested in this loan, regarding the possibility to sell the overdue loan. If the Loan recipient does not cover all arrears up to the date provided, "NEO Finance" terminates the credit agreement with them and offers to pay the payout to the Loan providers within seven calendar days.

When calculating the price of the payout, the share of the investment that is not returned to the Loan recipient is multiplied by the coefficient that depends on the credit worthiness rating of the Loan recipient and on the offer expiration date, when the Loan provider decides to sell the loan that is overdue. Coefficients depend on the credit worthiness rating of the loan recipient: credit worthiness rating A: 0.7, credit worthiness rating B: 0.6, credit worthiness rating C: 0.5. Depending on the offer expiration date, each day as of the fourth calendar day 0.05 are subtracted from coefficients of the aforementioned credit worthiness rating (i.e. for the first free days the coefficient of the credit worthiness rating A will be 0.7, on the fourth day - 0.65, etc.).

We also want to draw your attention to the fact that loan providers who have the status of a VIP investor have the possibility to sell overdue loans with the coefficient that is 0.1 point higher than other loan providers, who do not have the status of the VIP investor.

22. What will happen if the money in the provision fund runs out? Who will cover the payments?

The provision fund is formed from the accumulated monetary funds that are obtain...

The provision fund is formed from the accumulated monetary funds that are obtained from the investors who chose the provision fund. Therefore, the size of the provision fund depends on the total amount of loans covered by the provision fund. "Paskolų klubas" would cover the arrears from any other of its accounts, only if the money in the account of the Provision fund ran out.

23. What will happen if the company goes bankrupt? What will happen to the debts?

If bankruptcy is initiated, the appointed bankruptcy administrator will return a...

If bankruptcy is initiated, the appointed bankruptcy administrator will return all funds held in the electronic money accounts to their owners by transferring them into the (client) bank accounts. All funds covering the electronic money of the clients are held in the banks in separate accounts and are not considered as the property of the company. In accordance with the current legislation, the recovery related to the debts of the company cannot be aimed at these funds, they cannot be seized, etc., therefore the company can buy out all electronic money of the clients at any time despite the amount thereof (i.e. it is not limited by the 100 000 EUR deposit insurance amount).

When discussing the obligations of the company, as the operator of the mutual lending platform, in case of the company bankruptcy, we will follow the activity continuity plan that is coordinated together with the Bank of Lithuania, and provides for the specific actions and procedures that have to be carried out. The most important principle – all agreements that are concluded via the system are valid and must be executed further. The information of investors and loan recipients are revealed to one another no later than within four business days so that the agreements can be carried out. This means that the loan recipient will have to pay the monthly payments directly to the investors.

24. What is secondary market?

Secondary market – the possibility for investors to buy and sell investments in...

Secondary market – the possibility for investors to buy and sell investments in consumer credits. Only investments owned by the investor under the ownership rights can be sold in the secondary market, i.e. the consumer credit, in which the investor had invested, is already financed and the consumer credit funds are already paid out to the recipient of the consumer credit. If the investment is sold for less than it was bought for, it is deemed that the loan is being sold with a discount. If it is sold for more, it is considered that the investment is being sold with a premium.

25. What taxes are applicable when buying and / or selling investments in the secondary market?

When buying and selling investments in the secondary market, brokerage fee of 1%...

When buying and selling investments in the secondary market, brokerage fee of 1% is applied. It is calculated with respect to the investment sale price.

26. How to sell an investment in the secondary market?

You can sell the investment in the "my investments" section. After clicking "Sel...

You can sell the investment in the "my investments" section. After clicking "Sell the investments" you can tick the investments that you want to sell. After selecting the loans that you wish to sell click "continue". In the window that appears you can enter a premium or discount for each loan and see the outcome of the investment should the transaction be performed. You can cancel the announcement at any time, while the investment for sale is not bought by other investors. The investment sale announcement uploaded in the secondary market is valid for 30 days. If this investment is not sold within 30 days, the announcement will be automatically cancelled and in order to further offer this investment to other investors, this announcement must be re-uploaded. If "NEO Finance" initiates the termination of the consumer credit agreement on the grounds of the improper performance of obligations by the debtor, the investment sale announcement is automatically cancelled.

27. How to buy an investment in the secondary market?

The secondary market can be found in the "Invest" section. You can see all the i...

The secondary market can be found in the "Invest" section. You can see all the information related to the investment that is being sold, i.e. the investment date, the credit worthiness rating, the remaining share of the loan that has to be repaid, the annual interest rate, the loan maturity, remaining receivable amount, premium or discount and the selling price, in the list of the investments that are for sale. CAUTION! In certain cases, sale price can exceed the remaining receivable sum, so these two amounts should be compared. In order to acquire the investment in the secondary market click the button "Buy" and sign the agreement.

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