This was posted 2 years 11 months 8 days ago, and might be an out-dated deal.

expired RateSetter Lender Account - NOW $100 Referral Bonus (until 2nd May 16)

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For anyone interested in trying P2P lending with RateSetter, they’re offering a referral bonus again – this time, for each person referred that lends at least $1,000 in the 1 Year, 3 Year Income or 5 Year Income markets, you'll both earn a $100 bonus (normally $25)

Offer is running between 11 April 2016 and 6 May 2016 for the first 1,000 referrals, with a maximum of 5 referrals per person

From their website:

Peer-to-Peer Lending with RateSetter Australia

  • Attractive returns: RateSetter offers attractive returns by connecting you with creditworthy borrowers
  • Simple: simply select a term, amount, and rate you wish to earn
  • Provision Fund protection: the Provision Fund can help protect you from borrower late payment or default
  • A peer-to-peer pioneer: the RateSetter group is one of the largest peer-to-peer lenders in the world

Update:

Received this email from Ratesetter: If you introduce a friend to RateSetter and they register and lend $1,000 in the 1 Year, 3 Year Income or 5 Year Income lending markets, we'll give both of you a bonus $100*. Due to strong lender interest, we've extended our 'refer a friend' bonus until Friday 6 May. Please un-expire this until 6 May.

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closed Comments

  •  

    edit: Damn Neil is fast

  • +3 votes

    Anyone willing to share first hand experiences with this?

    • +1 vote

      It's fine. I've earned some money, though I only have a nominal amount invested.

      It's more a novelty for me. I don't think there is significant risk involved, they have a fund that they can draw out of.

      Plus, generally your risk is fairly diversified. A borrower might have $10,000 on loan from ratesetter. Your $1,000 that you invest will be split amongst many borrowers, so maybe only $100 with that particular person. If they fail to repay, a) ratesetter may cover your arse b) if they don't, you're only out $100 and not $1,000.

      I say 'may' cover your arse because apparently it's at their discretion.

      • +4 votes

        I've read their risk explanation and PDS and I would personally classify this investment vehicle as medium to high risk. This combined with the fact that I don't think the P2P market has accurately assessed for the risk yet (because there hasn't been any defaults) and thus aren't charging what they should, probably 15-20%.

        This is comparable to lending a friend (or anyone really) money with a contract. If they don't pay, you put the dogs on them. In this case, you have the option to 'sell' your loan to a third party (Rate Setter will do this for you) collection agency and they'll pay you what they value the recovery at (I would imagine a significantly reduced amount).

        As soon as we start getting defaults (because lets be honest, it's bound to happen) the interest rates will start shooting up. And obviously this is under the assumption that there will be defaults; rate setter could just be very diligent in their background checks (in which case these interest rates are…fairly valued).

        •  

          they'll pay you what they value the recovery at (I would imagine a significantly reduced amount).

          No, they'll pay ratesetter a reduced amount. The full amount will come out of the Provision Fund for as long as there is money in the provision fund.

          And yeah obviously there are going to be defaults, as there are with literally any loan, but the fact that there haven't been any so far points to the rigour of Ratesetter's process.

        •  

          @seanmurphy1994:

          Do you know if the provision fund has never been accessed?

        •  

          @serpserpserp:

          The guys on a Ratesetter webinar said they used it semi-regularly to cover late payments by borrowers, but nobody had actually defaulted on an entire loan.

        •  

          There have been a couple of defaults if you download their loan book. Right now they anticipate less than 2.7% of loans defaulting however their provision fund can comfortably cover 5% default rate. (Pretty unlikely though as they choose fairly low risk borrowers for loans)

          Download the latest loanbook here and have a look around: http://static.ratesetter.com.au/loanbook/20160331LoanBook.xl...

        •  

          @seanmurphy1994:
          when was the last webinar?

        •  

          @powerhead:
          No idea tbh. The one I watched was late last year.

        •  

          @seanmurphy1994:

          Hi seanmurphy1994,

          We hold our RateSetter Lending 101 webinar every 5-6 weeks. The webinar is a 20 minute presentation followed by open Q&A, so if you (or any other Ozbargainers ) have questions about RateSetter feel free to join the next session. If you've just signed up as a lender you should receive an invite to the next webinar via email in the coming week. If you're an existing lender, just send us an email at contact@ratesetter.com.au and we'll add you to the invite list for the next webinar.

          Cheers

          Ben Milsom

        • +2 votes

          @milsomb: Hi @seanmurphy1994 and OzBargainers,

          The next RateSetter Lending 101 Webinar will be on Thursday, 2 June 2016 at 5:30 PM. It will go for about 30 minutes or a little longer if there are a lot of questions.

          If you're interested, you can register at: https://attendee.gotowebinar.com/register/135192688654020173... - Also works on iPhone and Android through the gotowebinar app.

          Cheers,
          Ben

      •  

        Great, thanks!

      •  

        Plus, generally your risk is fairly diversified. A borrower might have $10,000 on loan from ratesetter. Your $1,000 that you invest will be split amongst many borrowers, so maybe only $100 with that particular person. If they fail to repay, a) ratesetter may cover your arse b) if they don't, you're only out $100 and not $1,000.

        that is incorrect

        in your example when your $1000 is used to fund a $10000 loan, your whole $1000 is exposed to that one single borrower who took out that loan

        • +1 vote

          Yeah, sorry. It's up to the individual to put the money up in the chunks that they want, so say 4 $250 chunks etc. Otherwise it could all go into one loan.

  • -3 votes

    This reeks of stupid. First, how is the fund stood up? Is it an insurance product because it damn well reads like one, in which case are they accredited issuers of insurance and thus backed by the appropriate auditing over their credit holdings and re-insurance arrangements?

    Sounds more like a tiny fund you have access to by way of contractual agreement only, funded with what is likely sweet-f-a seed capital and topped up with commission taken from your earnings on the amount borrowed, assuming the company contributes ANYTHING after taking profits.

    • +3 votes

      Hi smoke87,

      I'm Ben Milsom, Head of Marketing here at RateSetter. You've raised a number of issues that we have addressed over in another OzBargain thread here - https://www.ozbargain.com.au/node/179955.

      The Provision Fund is not an insurance product or a guarantee, but it is a pool of capital held separately to RateSetter in a trust solely for the benefit of lenders. The assets of the Provision Fund do not form part of the property of RateSetter and RateSetter has no claim on the capital which is in the Provision Fund and cannot use Provision Fund monies for its own purposes

      The RateSetter group globally is extremely proud that thanks to the Provision Fund concept none of our lenders - big or small - have ever missed a cent of capital or interest due. Globally, the RateSetter group has facilitated over $2B in loans between investors and borrowers.

      If you or any of the other OzBargainers are interested in learning how the platform works and a description of the risks and benefits, we'd recommend you read our Product Disclosure Statement which is available online at https://members.ratesetter.com.au/documents/document/pds

      Cheers

      Ben Milsom

    •  

      I've been using it for over a year and am very happy with it as a lender.

    •  

      lol, I'm disagreeing with your post but, welcome to finance companies ;)

      • +2 votes

        No. Not even close to a deposit account, or term deposit.

        ADIs (ie banks) will have requirement to reserve capital for depositors, and government guarantee funds deposited with ADIs (used to be $1 mil during GFC, not sure what it is now).

        Funds with these guys will be all depending on these guy's credit risk assessment model and lending criteria.

        • +2 votes

          I guess I should clarify that I don't mean this investment platform is similar to how a bank operates, just in the ways you deposit and receive money as a lender.

          You're absolutely correct, RateSetter is a platform that you use connect to borrows/lenders, you are essentially your own bank, you take all the risk.

  •  

    Does anyone know why the 1yr rates only pay interest payments each month, not principal and interest like the 3yr?
    Seems like more chance of not getting your money if the borrower only has to make interest payments then come up with the whole principal at the end? - or is that Rate setter holding the funds and they only release it at the end?

  • +1 vote

    Damn just signed up a day ago!

  • +4 votes

    I've been with them since mid last year and so far so good. With good timing and longer term commitments, you can pull in some pretty decent interest rates - with an increased risk.

    P2P lending is new to Australia, but is not a new concept. Ratesetter UK has been going since 2009. Definitely not a 'scheme'. All their fees and dealings are well detailed online.

  • +1 vote

    Can confirm they pay the bonus and it is easily withdrawn. Change is that it is now for 1 year min - but it is a fair reward for the risk (10%+interest).

  • +1 vote

    Signed up, account was credited with referral bonus within a few days of my money being matched with a borrower.
    Interest rates for the 3-year market were most attractive so that's what I went with.
    Happy to post a follow-up every so often and answer any questions people might have.

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