Your account balance can go negative in certain scenarios when Borrower payments to you are reversed and there is insufficient available funds in your account to cover them.
For example, your account has $22 available funds and you receive a Borrower payment of $4, taking the balance to $26. You then lend $25 to a new Borrower, leaving a balance of $1. After this, there is a reversal of the $4 Borrower repayment (see reason below). This leaves your account with negative available cash of -$3.
If your account goes into negative, you will be unable to lend or withdraw funds until you either transfer money into your account or you receive loan repayments to bring your cash to a positive balance.
The most common reasons for reversed payments are:
- Late Borrower dishonours after the 3 business day clearing period.
- Loans cancelled in the 7 day cooling off period required by regulation.
- Borrower initiated payment clawback after the 3 business day clearing period.