This was posted 5 years 10 months 7 days ago, and might be an out-dated deal.

  • expired

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 Make sure your funds are either automatically withdrawn to your designated bank account or relent out otherwise you will miss out on interest if you have money sitting in the non-interest account.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:

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

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Plenti (Previously RateSetter)

closed Comments

      • -2

        Can I claim the $100 and then spin them a story to get the $2000 back ?

  • I've been using RateSetter for a while, lending only small amounts for now.

    One thing that buggers me and I can't see anybody talking about it - how much money do they (RS) expect to make when they are technically "buying" a new lender for $200? Probably somebody somewhere did some calculations and decided this will be a good deal for them, which means from every single new lender (on average) they expect to make more than $200… might be true…
    Considering the "first 1000 referrals" rule - from another perspective this is a $200000 marketing campaign :)

    • $200k marketing campaign, gets written off as an expense. This has only happened a couple of times and startups typically don't make money for a while. Look at Tesla and Uber.

      • Uber is losing tonnes of money at the moment.

        • Cool story bro.

    • It's marketing that's gonna grow their business and pay off a lot more in the future after these people tell their friends etc. Not to mention bring in more cash to give to borrowers and help increase integrity of operations.

      If a company puts up a billboard, do you think they expect to make 2 cents from every person who looked at it?

    • +1

      RateSetter actually takes 10% of every interest payment you earn — which can actually be a lot. Their fee is taken after the interest has been paid. Therefore 5.5% return for 1 year is actually 4.95% return after RateSetter taking their cut.

      $200,000 marketing campaign would be paid off after $2 million interest has been paid. With minimum $2 million lend out ($2,000 x 1,000) it would take a while to collect $2m interest. Obviously they are hoping the new lenders can see the benefit of P2P lending & lend out more fund.

      • +6

        Its worth clarifying that the 10% fee that ratesetter take is not "off" the advertised rate.
        For example if you are investing 3 years at 8%, then you wont be getting 8% minus 0.8%, rather the loan you have funded will be at 8.88% such that the rate you get is still 8% after ratesetter take their cut. Basically the cost is on borrower side, not lender side.
        That's from what I understood in the FAQs anyway..

        Edit: Not sure why you got negged, the rest is correct. If they get some good volume behind them they'll be making decent money!
        Imagine a $100M Trade Volume at 10%. If my napkin math is correct, at this volume they'd be earning around 1M per year? Not bad.

        • +1

          Depends what the interest rate is. It usually is not 10% unless it's all at a 5 year market. Considering they have a few employees and financial compliancy I reckon a company such as this will only be profitable at double that volume. They should hit that by year 3 if current growth keeps up. Most of the negative people in here will probably relax a bit more by that time.

        • +7

          From the comments I have learned that this is an extremely risky untrustworthy unregulated ponzi scheme and the owner is going to take all our money to the bahamas for a nice holiday.

          From actually researching it myself I've learned that people are lazy and ignorant, and that this appears to represent a sound investment strategy with a better than usual risk/reward ratio, and a convenient trading platform, plus a free $100 as a sweetener.

        • +1

          Thanks for the clarification. I stand corrected.

      • +1

        Misleading statement. When they advertise 9.9%, you actually get 9.9%. The fees are already taken in to account.

        The fee is not high imo. They are providing a sophisticated platform and without it, you wouldn't be lending.

      • Also worth mentioning that a lot of people will be reinvesting that $100 so effectively it stays in their pool for quite a while.

  • I feel this is better suited for the forums

  • +6

    Pretty funny all the financially illiterate people here calling this a "scam" or a "ponzi".

    How do you think banks lend out personal loans?

    The Australian housing market is a lot more of a ponzi than this…

  • High risk, low returns. Best case scenario when it turns into bad debt is they sell it to a collector and get a decent rate for it. Once it gets really popular and on par with big banks it'll be okay - you'll have less unemployed idiots applying for loans while self employed and the company its self will have more to possibly cover losses up to certain limits. The idea is great (the uber of lending if you will), just needs far more audience to be viable.

    tl;dr: Don't be the guinea pig taking risks for $100, instead wait 3-5 years and if the company is a lot larger then enjoy your safe 9.9% PA. Until then, bank term deposits aren't that bad.

  • +2

    The only thing that makes me wary is the OP seems to have all the answers to all the questions. Almost like they work for the company…

    Just my impression, I had a similar experience of exchanges with a group trying to get me to invest. I didn't, but 6 months later heard all the sad stories of those that did.

    • Yep, and can you tell that all the answers are sugar coated too? I've been through this. Please stay away people.

    • Exactly. That level of assurance is only seen when TA confirms no incentive would be paid with unlisted coupons.

    • There are real reps here from the company. As someone who has used their service since January 2015 you'd hope that I have some knowledge of the risks involved. I did my due diligence and so far I have been pretty happy.

  • -3

    I bought $10K worth of bank shares last month. Sold them few days ago for a bit over $11K. That was 10% return in 6 weeks. Thank you very much.

    • Which Bank?

      • +1


        BTW I will say that obviously there was the risk I could've just as easily lost $1K. It's not always sunshine and lollipops. Which seems to be the case with this deal :)

        • Yeah you're spot on with that. I wish I knew more about shares! Congrats on the 1k Mate =)

        • @Pab23q: thanks

  • +1

    And nobody has mentioned bikies yet…

  • +4

    +1 Vote for ratesetter! Haven't bothered to add my referral. P2P lending is here to stay and will only grow. Harmoney in NZ has written over 200mill NZD in loans. Harmoney is now here for insto investors with retail opening up hopefully this year. RS in the UK have been around longer and have still not lost one cent of investor money. RS will always be a small part of my asset allocation (sub 10%).

    I've been a member for nearly a year and have 40 loans with them, not had a late payment yet, and one has paid out in full early. People on ozbargain are super conservative; it is actually quite funny. Do you honestly expect risk free returns of 9%? This investment does not exist. The lack of liquidity on the withdrawal side does annoy me and hence I am pouring a lot more of my money into La Trobe financial, the returns are lower but the loan is secured against property and the liquidity is better with terms as low as 1 month.

  • What of I redraw from my mortgage, will it be tax deductible? So effectively it will gove me a margin of 4% before tax which is pretty good return from a money I don't own.

  • +5

    Ozbargain should not be a means of promoting offers that may expose it's users to significant investment risk. This should be the job and advice given by a registered financial advisor.

  • +4

    I just want to point out that the interest is less for the 3 year (and 5 year) product, because they pay you back interest and principal every month, rather than the interest every month and the principal at the end.

    If you plug the numbers in here for $2000 at 3 years @ 8.5%, $0 fees:!how-much-will-my-repayments-be

    You end up with $63 a month paid to you which = $2,273 at the end of 3 years (plus the $100). This is the equivalent of about 4.3% interest on a 3 year compounding interest loan using this calculator:

    Factoring in the $100 it is about 5.7% for 3 years

    Now of course, you can put the monthly payments in an interest bearing account and earn more interest on that money. If you put all your ratesetter payments into a 3% interest account every month when you get it, after 3 years you will end up with about $2370 in your savings account which is the equivalent of 5.7%, or $2470 with the $100 bonus = 7.1% interest over 3 years.

    You would would probably be able to get more than 7% in a vanguard account.

    • I was literally just doing the math on that to post! Saved me some time. It's not just put in 3k and get 10% back. But there is the option to reinvest the repayments returned to you again.

    • +1

      You only get interest on the outstanding principal balance of course. That's like saying if you are paying principal and interest on a homeloan the bank is not getting the actual rate they charge you.

      • +1

        It's something to be aware of when comparing to other investment products (a simple TD for example). It's not clear when they say 9.9% per annum as the assumption is that this would be compounding.

        • +2

          Fair call mate. Warning: This will be a long post…

          I want to stress the importance of asset allocation and investing to match your personality; for those that are not comfortable, then do not invest in RS. I am not advocating 100% of your cash into ratesetter. Out of interest I chose at random 2 vanguard etfs over the past 3 years. Assuming an initial outlay of 3k and a brokerage of 11 bucks each way. I got my dividend data from

          First one VAS, close 30/08/13 = 65.89. If we use the the rounddown function with 11 bucks brokerage we are able to buy 45 shares. VAS pays divs quarterly with various franking amounts; i will not itemise each quarter but the total dividend including franking credits is 10.9569. Close yesterday 69.8
          Profit = capital gain + dividends
          = 45(69.8-65.89)-22 + 45*10.9569
          = 647.01

          if we Annualise that: (3647.01/3000)^(1/3) its a return 6.72%, which is not bad. Some caveats, we have not reinvested the dividends, realistically each dividend payment is not enough for another share, you would have to wait for 2 dividend payments. You could put the divs in a 3.2% savings account, noting that the actual cash component is less than the total value, because of franking credits. Now here is where personality comes into play: in March 2015 VAS was 76.2 and now it is 69.8, this is a drawdown that is greater than 8 percent in 17 months, how would you feel right now, yes you have made 6.8 odd% annualised over the last three years but in the last year you have lost a bunch of capital. In February this year VAS dipped below 60 bucks, how would you have felt? Would you have bought more?

          2nd one is VHY, close 30/08/13 = 63.39. We are able to buy 47 shares, quarterly divs here again. Close yesterday 57.78!!! Dividends over that time: 13.9649.
          Profit = capital gain + dividends
          = 47(57.78-63.39)-22 + 47x(13.9649)
          = 370.6817

          If we annualise that we have a cool 3.96% return, which is still not bad… But have a look at your capital position?

          In my opinion ETFs and Shares will always have an asset allocation in a well managed wealth portfolio. The same with property and fixed interest. I have a feeling that the vast majority of Ozbargain are mortgage offsetters, online savings account or td type people. Whilst these have no risk to capital; your risk is inflation and more importantly opportunity risk.

          Any more ETFs people want to investigate, those were the only 2 I know of off the top of my head.

  • -1

    Not enough reward for the risk. Compared to putting this into a tax effective mortgage offset where you can withdraw the cash anytime. No thanks. 3 and 5 year rates are good but not happy with money tied up for that long with these guys. Maybe chuck 2k at this for a laugh, or as a small component of a diverse portfolio.

    • +2

      Not everyone has a mortgage.

  • -3

    My cousin is offering a similar deal. Give him 5K and I swear to god you will get 5K+1K Interest back in 3 months and he has a provisional fund for in case the original loan isn't paid back but of course it's not guaranteed because as we all know investments are risky.

    • +1

      "and I swear to God…" ok you sold me. Where do I transfer my cash?. Oh wait, which God is it?

  • Hi

    Can we choose who we want to borrow the money out to? Or only lend to specific loan type?


    • Not with RateSetter but you can see the loans they have leant out to. You can only choose the amount you put in per loan, the rate and the timeframe of investment. Other services do offer this but they often bait you to take riskier loans for better rates. I personally have stuck with RateSetter.

      • Exactly what machej said. Your offer on the market can go completely to 1 person or may be automatically split up to tens of people. It completely varies, however, it also makes the whole process much more simple.

  • -1

    i'm gonna drop $2k on a $1.05 bet on sportsbet and get my 5% now

    • +2

      Make sure you lose or they will close your account.

  • Who takes out a 5 year loan at 9.9% these days?

    • -1

      According to the non-associated bot that answers these type of questions people with "great" credit ratings and "great" LVR and "great" life circumstances.

      • I must be a pretty efficient human to be compared with a "bot". At least I know my job isn't at risk when the robots start infiltrating the workplace.

    • +3

      Apparently, a lot of people. To you and me it makes no sense, but personal loans have much higher interest rates than 10%. That gives RateSetter a nice margin.

      Commonwealth Bank offers personal loans "from 13.90%", and that's before fees.

      • Does the interest rate per annum go up the longer the term of the loan with banks and cerdit unions?

      • +1

        Makes sense to me, take this for instance:

        Person is short $8k for 20% for a deposit on a home. Mortgage insurance was $4k. Was cheaper to get a personal loan for $8k at 10% than to incur the mortgage insurance.

    • +1

      I have to wonder myself. I think debt consolidation companies might be the ones who are driving a lot of the traffic, using the loans to pay off CC debt.

      Who takes out a loan at 9.9%? Someone who has a loan already and pays 18%

      • Yes, it is consolidation. You can download their loan book from the link in the description.

      • +1

        Go read their data. People take out loans to buy a car, renovate their house etc. Ratesetter has very low rates for personal loans compared to the banks.

        Your arguments against RS also apply against banks.

  • +2

    For those who forgot to sign up via a referral link (like me), this is what ratesetter can do:

    "It would be appreciated if you could kindly let us know the full name and email address of the email address of the lender who has referred you.

    As soon as we receive this information, we can pass it onto the technical team so the can have it fixed for you."

    If anyone is willing to share their full name and email address to me (via. personal message), i'll forward this to ratesetter and we can both get the bonus :)

    • Just email them a random affiliate link and tell them to apply it. That's what I did, without needing to provide personal details (even though they asked for it at first).

      But if you want, you can pm me and I will provide.

    • you seem to have PMs turned off. You can turn them on at "My Account > Settings > Messaging"

      • Thanks both for replying. I've turned on my PMs.

    • I'm on the same boat. If anyone wants to PM their details we can both get the bonus ;) I registered on 14/08 so you are only eligible if you signed up before that. Thanks!

  • How can I access referral link to get referred by an existing lender?

    • Have a look at the Referral Links section just under the post body and just above the share buttons.

      Then you can choose either machej (the OP) by clicking their username or a random OzBargain members (recommended as it shares the love more) referral code by clicking the "random" button.

      Just make sure once you click on the referral that it shows somebody's name in the "NAME is already a RateSetter", and sign up.

  • To hell with it I'll give it a go through my SMSF, can't perform be any worse than the bank shares have been for a while and will diversify my portfolio a bit. Signed up with a random referral.

  • How do I ensure I get the $100 welcome bonus? I just applied using one of the referral links on this site, so I hope I'm all good?

    • According to the offer rules you need to invest $2000 in a 1, 3 or 5 year loan within a month and hope that your one of the first 1000 to do so from this offer.

      • Hmm that's what I'm worried about… I hope I'm one of the first 1000!

        • Me too. Hate limited number offers where you have no way of telling if you one of the few. At least with all the scepticism here it shouldn't be "ozbargained" ;)

        • I asked one of the Reps at RateSetter to let us know when it hits 1000 so it should be fine still.

        • @machej:
          Don't suppose you know if it is done by signup time or based on when the $2000 gets invested? Because I'm going with an SMSF I have to get certified copies of docs to then plus then wait for funds to transfer so likely to be up to a week before I qualify.

          Might just be starting to get too hard, have to think about leaving my cash with the banks.

        • +1

          @jpcw: If you send an Ozbargain PM to "milsomb" (a RateSetter Rep) he may be able to put a note in so you don't miss out.

    • +1

      Once you've applied with one of the referral links they'll verify you as a lender. After that, just do what jpcw said and put at least $2000 into either a 1, 3 or 5 year loan within 30 days of opening your account (the sooner the better).
      You'll receive your referral bonus as money in your Ratesetter account 30 days after placing your money on a loan. You can then withdraw the $100 to your bank account or put it on another loan (maybe then try the 1 month market). Give them a call if you have any concerns along the way, they're super nice (1300 768 710).

  • I've tried to add my referral using the edit function but it isn't showing up, any advice people?

  • -1

    Most have probably realised that a $2000 loan at 4% isn't actually going to be 4% of 2000 because the principle is being paid back over the year so actual returned interest is going to reduce. On the plus side you are also getting your investment back which you can reinvest if you want. I used this calculator ( )to get an idea of what the actual return would be. If you take into account the $100 bonus and assuming a 4% interest rate the total return on your first $2000 investment would be around $350 or equivalent to a 1 year loan rate of about 6.5% assuming you withdraw the principle as it was repaid.

    • Correct, as noted in the post description it's certainly worth using the auto-reinvest feature or the auto-withdrawal feature. I use the latter so I can keep my loans tidy.

      • agreed. But you also have the flexibility that you wouldn't get with say a 12 month fixed deposit. With this you can actually draw down the principle. Actually it could be quite good if you have say a regular monthly fee to pay, have the money in the investment and get paid each month. Might work well if you use one of the interest free loans and put the money you would have paid into here. But I guess the "fees" on the interest free loan would be higher than the interest earnt plus even though your covered by the provision fund I assume there could be large delays in getting access to it, guess you would also be paying tax on the interest. Hmm maybe scratch that particular idea.

    • Ooops. Stuffed up my calculation. That was on $10,000 not $2000.

      $2000 @ current 1 year rate of 5.1% would be $55.68
      or with the $100 = $155.68 which is equivilant to a rate of about 14%

    • Only 3 and 5 year loans have principal paid back monthly together with interest.
      1 year and 3 month loans pay interest monthly and the principal back at the end of the loan. Note that "1 year" is an indicative period. It may be up to 2 years.

      • Where did you see that?

        • Where did you see that?


          Correction: The indicative short term is 1 month, not 3 month.

  • Ready to invest my 2,000, but would first like a guarantee from the rep who was posting here constantly that the first 1000 hasn't already been passed..

    • +1

      michej said the rep was "milsomb" try PM'ing him.

    • feel free to call them mate,

    • Call or email them or Ozbargain message to one of the reps. You should get a response on weekdays in minutes usually.

  • I must say I like their support. Between the reps on here contacting me to offer assistance and the speed that they deal with requests and setup issues I'm happy so far. Should expect it realy they want me to hand over money but that doesn't seem to make a difference with the big banks lol.

  • -1

    5 years 9.9%pa…

    Just a note major financial companies that have 9.9%p.a over 5 year I can probably count on 1 hand… these are the guys who are playing with 100s of billions spread over 1000s of funds… paying fund managers millions of dollars to invest money.

    If this was relatively low risk… one of them would have an equivalent Fund set up like this.

    • There's reasons for that. 1) the larger you get, the less nimble you are. If you have 100 billion dollars, you can't afford to be spending time, looking for the best place to put it, $2000 at a time. 2) This is not risk free. Anything can happen in the next 5 years. A few of the people here will lose everything the lend, that's just statistics. 3) Those guys you're talking about probably have their money in credit cards. Why would they want to cannibalize themselves by investing in something like this?

      • +1

        It's possible that no one loses due to the provision fund. It all comes down to whether 6% of borrowers default at this stage because that's what the provision fund can handle.

  • im just about to signup. which rate is everyone choosing? seems like the 3 year @ 8.5% is most effective in terms of how long you leave your money in there.

    • +1

      Personally I prefer 1 and 3 year markets. All comes back to your requirements and how much capital you can put away for the time period.

  • +! just got my $100 bonus :)

    • Looks like they have dropped the investment amount too. Now showing as needing $1000 initial investment rather than $2000

      "Thanks for participating in our Welcome Bonus offer. Want to earn even more? Refer up to five friends to RateSetter using your unique referral link. For each friend that lends at least $1,000 you'll both earn $100.00.* "

      • Hmm. there's an inconsistency here. The email saying I got paid the referral bonus shows $1000 initial investment yet online it still shows $2000 investment. I'm assuming the email is a misprint. I'll ping one of the reps for clarification

        • Hi jpcw,

          The reference to $1000 in the notification email was in error - the promotion terms have not changed and investors who have been referred by an existing investor will still need to lend $2000 in our 1 Year, 3 Year Income or 5 Year Income lending market to be eligible for the Welcome Bonus. . We'll be sending out a correction email shortly.

          Our apologies for the confusion.


          Ben Milsom

        • @milsomb:
          No prob, thought that might be the case :)

  • The best investments are usually the ones that people hate and ridicule. This thread convinced my partner & I to put some money in.
    $400 referrer/referee fees so far so pretty happy. I do agree that it's not a suitable investment for everyone though.

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