Social Lending From RateSetter Loans

Since launching in the UK in October 2010, RateSetter has amassed over 4,000 members and lent more than £1,000,000 to borrowers of the person to person saving and lending website.

By offering borrowing and saving rates that are more competitive than high street banks, RateSetter has proven popular among social lending users.

The website also offer the option of one-month rolling loans which currently pay 3.6% per annum or fixed for three years for an improved return of closer to 7.5%.

RateSetter’s rolling option allows its saving members monthly access to their money, but as a result means that the interest rate is in a constant state of flux.

Co-founder and chief executive Rhydian Lewis boasts that since RateSetter’s launch in October 2010 there have been no missed payments on any loans in the system.

“We are delighted at how quickly people have embraced RateSetter.

Banks charge high rates and often only offer finance together with another product such as a current account or a loyalty card.”

When compared with other social lending websites such as Zopa and Funding Circle, RateSetter Loan rates for savings are lower due to the use of a “Provision Fund”. The Provision Fund is a system where money is set aside from the rest of the business in order to compensate savers should a borrower default or is late making repayments.

The use of provision system to benefit savers is a feature that sets RateSetter apart from other social lenders and peer-to-peer saving websites. The Provision Fund helps to provide additional security that returns will be paid.

RatSetter information for borrowers

• Fees: £60 a year for short-term rolling lending / £115 one-off upfront fee for 26-month loan
• Minimum/maximum borrowed: £1,000 / £25,000
• Average rate: 6.8-10.2%

RateSetter information for lenders

• Fees: 10% of interest earned
• Minimum/maximum lent: £100 / £40,000
• Average rate: n/a
• Range of rates: 3.3%-6.8%
• Default rates low/high risk: No data

But ofcourse, this provision does some at a price and ultimately means that the rates of interest for RateSetter aren’t as attractive as those of their rivals – where in some cases rates in excess of 9% are often available.

RateSetter.com – Click Here to see the latest Borrowing & Lending Rates!