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Lend $2000 for 1, 3 or 5 Years on Ratesetter and Get $100 + Interest


From their website:

  • 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

Current rates (Changes daily but usually not massively):

  • 1 year @ 5.5% PA
  • 3 year @ 8.5% PA
  • 5 year @ 9.9% PA

Personal experience:

I have used Ratesetter for over 1 year now and have been pleased with the support and return. The provision fund (which is a form of protection, not to be confused with insurance) has held up rather well and this means that if someone were to default on some of my loans then I most likely wouldn't have a loss. It's best to spread your loans into smaller lots to mitigate risk. I've found that sometimes people pay their loans back early but you can easily lend the funds out again. Make sure your funds are either automatically withdrawn to your designated bank account or relent out otherwise you will miss out on interest if you have money sitting in the non-interest account. Each year Ratesetter automatically makes an annual tax summary so you don't have to worry about the complexities of having tiny amounts of money leant out at slightly different rates.

Ratesetter also publishes their loan book of borrowers which you can find here: http://static.ratesetter.com.au/loanbook/20160630LoanBook.xl...

You can deposit fairly easily via Bpay. It's worth doing some research on the risk and reading the PDS to make sure it's right for you.

For the first 1,000 referrals, with a maximum of 5 referrals per person

MOD: Please

  • Do not add your referral link in the comments.
  • Use the user-referral system to add your referral link to RateSetter. Click on the edit link in the grey Referral Links box below.

Warning: This is an investment with a company that is not an Authorised Deposit-taking Institution (ADI). The Australian Government guarantee does not apply in the event of the company going bust. Please consider whether it is appropriate for you.

Referral Links

Referral: random (69)

$50 for referrer and $50 for referee.

Related Stores

Plenti (Previously RateSetter)
Plenti (Previously RateSetter)

closed Comments

  • +24

    Give me $2000 and you might get $1000 interest after five years…. Or you might not….

    • +2

      So far no one has lost a cent due to the provision fund and I've certainly leant out a lot more than that amount over the course of the past year. It's worth noting they have leant out nearly $50 million in loans with a rather tiny amount of defaults. They also publish their loan book online.

      • +2

        So far no one has lost a cent

        According to who?

        • +7

          According to Ratesetter. Basically borrowers have to pay a fee on initiation and that goes into a trust which is for the beneficiary of lenders. So right now there is around $2.4 million in the provision fund which can be given to lenders when a borrower defaults. Because Ratesetter only lends out to people who are nearly always able to pay back the loans the provision fund has kept accumulating.

          People who have had loans default have been reimbursed by the fund and so far if you check their published loan book above you can see this for yourself.

        • +4

          @machej: What bank controls exist to prevent the money from magically being converted to bitcoin and the owners skidaddling over to Russia or wherever?

        • +6


          hello my name is Mr Ponzi. That's Ponzi …Scheme.

        • @Parentheses: They would be required to have independent audits of their provision fund and book keeping but I recommend you get in touch with them as I'm not privy to that information.

        • +5

          To whom.

      • +3

        The risk isn't the default of the occasional loan in normal times like these.
        The risk is when there's a major economic crisis (think the 2009 GFC on steroids), rentals for people's levereged "investment properties" drop, and suddenly a large portion of the borrowers default at once.

        I'm not saying it's a bad investment, but you need to decide if 5.3% premium compared to a 3-year government-guaranteed term deposit is worth the risk.

    • Let us do some maths here, On a loan of a year $2000 rate of interest is 5.5% = $110 + $100 to referrer + $100 to referee = 310$.
      That means 15.5% payout on 2000 loan, surly a Ponzi.

      • +4

        This would be a loss leader. Akin to a supermarket selling milk for $2 to get you to buy your other groceries. They don't expect to make a profit from this specific transaction but they do expect you'll be happy with the risk and return, and thus continue lending. This is a limited promotion for 1000 people and they have leant out $50 million. Certainly not at such a high percentage.

      • +3

        Oh. Are all investments that have good returns considered ponzi to you?

      • +2

        Do you not understand that these companies make money by scalping a difference between the rate charged and the rate paid? From this profit they pay for promotions such as these, which are a pittance compared to the cost of staff, capital, etc.

        • +1

          True. But isn't this basically what the 'Big Banks' are doing anyways? ie. we get 2% Interest on our deposit, whilst they're scalping out our money at 14% for a 'Personal Loan'.

        • @psychtracker: now there's a ponzi if ur looking for one

      • +1

        That means 15.5% payout on 2000 loan

        That's still less than credit card interest rates.
        Sure there's plenty of risk but it's not a ponzi

      • You think that any return with high interest rate is ponzi.. huh? Logic counts more than the number.

    • This is essentially the same deal you make with banks every day. Except it is peer to peer and they aren't paying billions dollar salaries to get in the way.

  • +14

    interesting concept, but risky.

    • All investment is risk! The safest option of course is to leave your money in a "high interest" (heh) savings account… where the bank will lend it to people and keep all the profits.

      I see Ratesetter as a bit of fun on the side. I would never put the bulk of my $ in there. I'll say this for it: When the stocks are sliding backwards, the Ratesetter account keeps going forwards.

      • I would have liked rate-setter more if it had customised loan tenures - like if I had flexibility to lend my money for 5 months or 7 months. It would make much more sense.

    • +5

      I agree, this could collapse on itself. This isn't a bargain either.

    • this can be implemented very easily with cryptocurrency, peer to peer, in a trustless way. just need the right software.
      bitsquare apparently is looking to add user to user lending. i doubt the interest rate would be this good tho…

  • +7

    I signed up with RateSetter using a referral code on OzBargain during the last referral promotion and received the bonus extremely quickly.

    After the interest rates started dropping on ING I've been moving my savings over and could not be happier with RateSetter. Their customer service is also fantastic, answering every stupid question I threw at them with a smile.

    If anyone has any questions, let me know and I'll try and help out.

    • +3

      Yea, fantastic support team who frequent Ozbargain/Whirlpool as well.

      • +12

        Thanks - we do our best.

        If anyone has any questions about RateSetter, or peer-to-peer lending more generally, don't hesitate to ask. Our Product Disclosure Statement is also worth a read - though it may appear lengthy we went to great lengths to make it a useful, readable document. If you're based in Sydney I'm also happy to welcome you to our office for a coffee.

        A quick point: we understand that RateSetter isn't for everyone. We also understand that there are no shortcuts to trust, and that no matter how many licences we hold or audits we undertake there will be skeptics. That's healthy - peer-to-peer lending is still very new in Australia. We'll need to earn confidence over time with a track record of consistently delivering for our customers, much as we've done in the UK.

        We also believe transparency is fundamental to peer-to-peer lending, and we try to make as much information available as possible for people to make an informed investment decision.

        Glenn Riddell

        • I don't know if you advertise like OP, but to the casual eye he makes it appear that it's a simple 10℅ return PA deal… it seems misleading for the layman, and to an experienced investor a clear case of "if it seems to good to be true it probably is."

        • Thanks. How do you differ from La Trobe's peer to peer lending where a property is a collateral? They have customised tenure plus higher interest rate. Moreover, you know exactly where your investment is going and you probably have the asset as a collateral in case of default. I would like to know pros and cons of RateSetter vs such.

        • @nuchalis: 10% returns only if you invest a low amount (due to $100 bonus). If the investment is high, it doesn't remain 10% and then it may start looking more realistic to you.

        • @virhlpool:

          Hi there,

          Different peer-to-peer models will suit different investors. RateSetter in the UK pioneered what we believe is a simpler, safer model of peer-to-peer lending, retaining the ability to set your own rate as a lender and a direct economic relationship with borrowers, but introducing greater certainty of returns thanks to Provision Fund protection.

          If you're seeking higher gross returns with the accompanying uncertainty about your eventual net return, or if you're seeking fine-grained control about the borrowers to whom you lend, we may not be the best option for you. Our proposition is simple, consistent, attractive returns.

          Importantly, with RateSetter you're lending to creditworthy Australian-resident individuals or businesses, and the loans may be secured or unsecured.

          Hope that helps.

          Glenn Riddell

        • @glennriddell: Thanks for your reply. Can a lender set his own interest rate on RateSetter beyond the rate or return mentioned in this post? I couldn't get it.

          Your proposition is simple and consistent for sure but to say it's 'attractive', really depends on with whom you are comparing. As I mentioned above in my comment, the other website has apparently higher returns even for much shorter terms.

        • @virhlpool:
          You do set your own rates but if everyone else is offering lower rates then you won't get a loan until all their funds have gone.

        • @jpcw: I see. So, eventually it comes down to the 'market' rate available on the website. Is there a scenario where you can command higher rate? Just curious. Thanks.

        • @virhlpool:
          Don't know, tell you when I get some money into it lol.

          But I'd assume the only way would be to set a higher rate and just wait and hope that the lower ones get taken up but then your money could be sitting a while with no interest. To be honest I would actually expect rates to drop while there is a promotion like this goin on as it wold bring in a bunch of new lenders. Low rates are a blessing and a curse, should bring in more borrowers and hopefully over the long term boost rates but in the short term your returns won't be all that good. Still better than the cash rate on small investments though.So I'll put in the minimum $2000 for now and see how it goes.

          But with $100 cash even if I only get 4% for a year that brings it up to an equivalent of over 10%

        • @jpcw: That's correct but you can see the full market depth like a stock market. It shows you how many lenders there are at each interest point. Here is a snapshot of the different markets supply vs demand. The rate history has stayed relatively smooth. (+-0.005%)

        • @virhlpool:

          Yes, you may specify a rate you wish to receive. Whether you're matched with a borrower at this rate depends on the rates offered by other lenders and the demand from borrowers.

          We believe RateSetter offers attractive returns and, importantly, Provision Fund protection. We don't claim to offer the highest returns, but I think RateSetter offers an attractive risk/reward profile.

          As always, have a read of the Product Disclosure Statement if you'd like to learn more about our lending markets or the Provision Fund.

          Glenn Riddell

  • +9

    This doesn't look like it is liquid enough for most investors.

    If you take a look at how bank's provisions for bad debt look like during times of turmoil every few years, you can easily forecast that it would wipe out the whole provision fund.


    Money in the Provision Fund


    Current estimate of bad debt***


    Coverage against expected bad debt

    ** The value of loans currently outstanding for which RateSetter may make a claim on the Provision Fund.

    *** The current estimate of borrower defaults is based on our analysis of borrower credit characteristics and the amount on loan. Our estimate of borrower defaults may change at any time.

    ^^^ This last clause is the most important part.

    • +2

      Sure but banks would traditionally lend out to riskier customers. Ratesetter only accepts customers such as the ones in the loan book above.

      Of course there is risk attached which is why no one has said this is risk free. If you split money over many loans it once again reduces risk.

      • +7

        I'm confused.

        If Ratesetter are so picky about borrowers and charge higher interest rates, why would anyone choose to borrow from them, unless they had already been rejected by or defaulted on a bank loan? I genuinely can't understand how they wouldn't attract a significantly higher proportion of defaulters.

        • +4

          Ratesetter's rates are lower than banks. Remember, personal lending is not secured lending like a home loan. If you check Mozo or a comparison site (https://mozo.com.au/personal-loans/unsecured) you can see Ratesetter is the cheapest by comparison rate. (Big 4 banks are 12-15% PA)

        • +3


          Only for unsecured loans. Given that you say a lot of borrowers have paid off their homes, I just can't fathom why they wouldn't use a secured loan or be borrowing against the equity in the home at a fraction of the quoted rates.

          I get the concept of peer to peer lending, I just can't understand how the risk profile on this one isn't considered much, much higher than suggested.

        • @UncleRico: It's a good point. In the loan book above some people have used Ratesetter to consolidate debt. Often the paperwork required for a small home loan would be too large and it's easier and cheaper to get a $10k personal loan after including all the fees. People with fully paid houses probably don't mind the extra few hundred a year. I personally don't use the service to borrow so I wouldn't know exactly how people think about it but I was reasonably happy with the risks for lending.

        • +1

          @UncleRico: Risk, thats why. Why put your house up as security if you want to borrow 10k for something or other. Something happens, you default, house is gone vs paying a hundred or 2 more in interest and they can't touch your house.

        • -1

          @Matt P:

          rubbish, both OFFSET accounts or LINE OF CREDIT accounts are very liquid and easy to setup for anybody who has any property of worth. i cant see this model above being sustainable.

        • +1

          Most people don't own a house.

        • @UncleRico:
          I don't think they are saying the risk profile isn't "high", just not as high as say a banks personal loan risk profile. Looking at their loan book they have a lot of Tenant (No Mortgage) and Own a Home (Mortgage) entries so yes they have potential risky clients however I assume that they are very heavy on the credit checks.

        • @sachz:
          Last time I setup anything to do with the house as collateral there were a bunch of fees including title discharge ones etc.

          Just plugged in some figures into https://www.anz.com/common/calculators/homeloanfee/exampleau... assuming a $100,000 house and a $10000 loan. Excluding the stamp duty on land transfer which wouldn't apply there are fees like $165 Registration of mortgage documents, $600 loan approval fee, $600 conveyancing fee, $37.25 search of title fee. I think there's also a fee at the end to release your title. That's a lot of fees for a $10,000 loan.

          Ok yes if you already have a mortgage with a bank then you might be able to avoid a lot of the fees but you can see why some people use personal loans otherwise why would the banks be doing them at 10%+ interest rates when they could just give people a 19% credit card instead?

        • @jpcw: i acknowledge that, i guess the same reasons some people use loan sharks for paycheck day loans to get them thru the week until their next pay cheque.

          targets certain demongraphics.

          in essense, not for me. happy for those who find it of value tho, and all the best to them.

        • @sachz: Payday users are a totally different demographic to this. This is long term 6-60 month loans with lower interest than competing offers providing you have a very good credit score and stable income.

          Payday lenders typically accept anyone with some revenue because they're charging 150% P/A+ interest.

        • @machej: fair enough, ive got a very good credit score and stable income, but because i own some real estate of some kind (which people of very good credit score and stable income, lets say typically might), i dont value ur services, as its heaps easier for me just to utilise an a OFFSET or LINE OF CREDIT liquid funds from my existing property(ies).

          Thanks again.

      • +5

        If ratesetter is so confident in their risk assessment, why don't they pool the loans and offer their investors a lower risk product.

        Either they realise that the loans on average will not be repaid, so they cannot do this, or this is expoliting some legal loophole so they can avoid all the scrutiny and regulation involved in calling themselves a bank

        • They sort of do pool them. The provision fund is a way in which they achieve this. Different loans will have different repayment terms and rates so it makes it rather complex to pool them all.

          So far nearly all due loans have been repaid. (Those that haven't have been repaid by the provision fund) I fail to see how you think they can run a viable business if they don't maintain their PR and get a satisfactory repayment rate.

        • @machej:
          The 'provision fund' is something of an enigma (in practical terms), which they themselves state is (pretty much) subject to change/revision at any time, at their discretion. That is the deal-breaker for me.

        • @GnarlyKnuckles:
          Actually it's the other way round for me. The principle of a provisional fund is to give investors at least a level of security. It needs to be fluid so that it can increase or change as risk increases or in good times potentially reduce so that there isn't an excess of funds sitting doing nothing.

          Now lending out of the provisional fund is something that I wouldn't like to see even if they were to 100% safe borrowers as that could create a liquidity problem if there were a sudden batch of bad debts, say for example if there was a natural disaster in a major city. Rather if there ends up being too much coverage in the provisional funds it could be used to either lower borrowing costs or maybe as bonuses to lenders.

          I'm just thinking of the provisional fund as a type of insurance cover, theres a small premium taken out of every lending and if something happens then I'm covered. Not a 100% garenteed cover but also not the cost of a 100% garenteed cover (compare what they charge to what mortgage insurance would cost).

  • +3

    Deal or scam…. Hmmmm.

    • +2

      Not a deal in the OB sense - you aren't getting the extra interest for nothing. Investors are taking on more risk than putting it in a bank.

      • +2

        Ugh, bail in anyone? The same laws that burnt the people of Cypress were introduced here this year. Your money is far from safe in a bank now.

        • Burnt the Cypress tree dwellers? :P

        • ECB has -0.4% interest rate. Interest rates are barely increasing in the US and have yet to start here.

      • +4

        The referral bonus is the deal, not the interest rate itself.

  • +5

    I also got an email from a nice Nigerian guy who is offering generous commission for people wanting the sell gold.

    • +7

      I'd bite but they're probably not licensed by ASIC and owned by a multi billion dollar parent company. ;)

    • +5

      Funny that, he doesn't happen to be a marine engineer working offshore in an oil rig somewhere? Lol

      • +3

        and he has a son who just graduated at the top of his economics class from Sydney university

        • Or is the wife of a dead American soldier who pilfered a large sum of untraceable cash from Iraq in the last war??

  • If interest rates go up, the real estate market could drop 25% and people who are highly geared might be in serious trouble. And you could lose your money.

    • -1

      Ratesetter wouldn't be accepting people with such high gearing. A lot of people appear to have their houses paid off in full. See their public loan book for more info.

      • Not sure a spread sheet is enough evidence to convince me…

        • Feel free to ring them up, if you sign up (without putting a $ in) you can see some of the lender/borrower stats which might allow you to better gauge risk. Like any financial corp they require independent audits so I don't see why you would find them completely untrustworthy.

        • +6

          @machej: I am not saying they are untrustworthy. Where the logic fails for me is if the majority of their clients are low risk with mortgages paid off, and over 30% of the clients provided on the spreadsheet earn over $100k, why would they use Ratesetter? Of those clients on the spread sheet that earn over $100k almost 75% of them are paying an interest rate above 8%. Surely if they are such good customers with good credit ratings they could get rates way better than 8% in the current environment… no?

        • +2

          @resubaehtgnolhcs: Not for unsecured lending necessarily. Let's say they have a house with 75% LVR with a big 4 bank. They won't be able to redraw and they may need to pay for a wedding or car. There are only so many avenues for capital at a rate of 4-5% depending on your assets.

          If the house is fully paid off I would agree that the rational is a bit daft. As I mentioned above, often the paperwork required for a small home loan would be too much and it's easier and cheaper to get a $10k personal loan after including all the fees.

        • +1

          You told me above, for which I got negged, that borrowers are not highly geared, yet you talk about 75 LVR which is pretty high.

        • @abacus: Depends, I was giving one example for someone with a home loan. Their income may be higher which could mean less risk. Most of the loans tend to be given to lower risk people. 75% LVR with a $180k salary on a modest home could be reasonable if it's a new home. I didn't neg you BTW.

  • I was looking into p2p lending a couple of years ago and at that time i was planning on being on the borrowing side. I've always thought it's a good idea but i never took the plunge just due to fear, i guess, which is perhaps unjustified but also understandable. How does ratesetter compare to other p2p options?

    • +1

      Good question. There are too many to compare but some of the others like thincats don't properly allow for risk mitigation. I really think P2P has to have a provision fund and the ability to easily split your money up into bundles of your choice.

    • I personally chose RateSetter due to their provision fund which greatly lowers the risk. The risk is still there of course.

      Also, as they're a multi-national company (quite large in the UK), if by chance they didn't cover somebody's funds under the provision fund, the PR would destroy a large amount of their business.

    • Can you tell me what the risks are on the borrowing side? Don't know much about this stuff. Cheers.

      • From what I understand given I haven't had to borrow. If you wanted to borrow a loan you'd have to let them do a credit check, have to send your bank statements (via a secure system) and let them know about your personal circumstances. (ie. job, time employed etc). Then they would make you pay some amount according to your risk which goes into the provision fund to potentially compensate lenders.

  • For the first 1,000 referrals, with a maximum of 5 referrals per person

  • +2

    When things are going well, everyone makes money (regardless of risk) and are happy.

    Only when s hits the fan, ppl truely see the "risk" of their investment.

    • -1

      Like anything really. (Even cash in certain countries) It's not an all or nothing scenario. Your superfund may take a hit if we have a recession.

      • +1

        Hopefully your super allows some choice and you can go to cash to dodge the hit.

    • Yes, that's right. You described investing.

      • +1

        Yes i did. But i think some people do not fully understand the risks with these types of investments.

  • Can I give them a bank account that doesn't accept direct debits?

    • For withdrawals you can. I send mine to an interest bearing account.

  • +5

    "LoanID 8723C231-48977912
    ContractDate 04-05-16
    LoanTerm 60
    AnnualRate 10.55%
    PrincipalOutstanding $38,527 $38,065
    LoanPurpose Holiday
    BorrowerState QLD
    BorrowerAge 40-49
    EmploymentStatus Self-employed
    BorrowerIncome <$50K
    HousingStatus Tenant (No Mortgage)
    Gender Male
    EarlyPaymentsMade No
    RepaymentStatus On schedule
    LatePaymentDescription n.a."

    Someone is enjoying a grand holiday.

    • +4

      That seems like a particularly risky loan. It's possible they had money tied up in a term deposit or net assets to cover it but it amazes me how many Australians take out personal loans for things like holidays.

      • my in-laws refinanced their own house to pay off credit card debts. a month later were sunning themselves on the gold coast for 3 weeks. 2 months later i didn't get a Christmas present (we have like a targeted $70 KK thing in the family) because they couldnt afford a present.

        the vast majority of people are (profanity) stupid with money :(

      • +1

        I've had a look at this one. Obviously I can't go into too much detail, but as is often the case with self-employed applicants the income field alone doesn't really tell the full story.

        Further, people will sometimes borrow for multiple purposes. In this case the primary purpose was actually a car, with a remaining smaller amount contributing to a holiday. We'll consider updating the loan book release in future to record multiple purposes.

        Glenn Riddell

    • +4

      I would not lend this large amount of money to a self-employed earning less than 50k p.a. for holiday purpose.

      • +2

        Neither would I. I'd say they must have other assets to their name. Less than 10% of their loans have been to people with incomes under $50k.

      • +3

        pfft, sounds secure to me, it'd be a tradie with <$50k on the books and >$100k in cash receipts anually

    • Only $500 paid off in 3 months. I'm no expert but this is guaranteed to default

      • +1

        My guess is that most of the money paid at the start would be towards interest. The capital would only start to be paid out towards the latter part of the loan.

        • no silly, you don't have to guess, just picture an unemployed (quote "self employed") man borrowing 38 grand for a holiday. don't picture a loan and financial theory about repayment of principal and interest!

        • Take a look at the rest of the loans. Most popular is car loan and borrowers have very high salaries.

        • D'oh, of course. I didn't think of that.

      • RepaymentStatus On schedule

        … or not.

    • Perfect if you plan to leave the country and never return….Not sure if they would/could do anything about getting their money back!

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