RateSetter (Australia) Reviews: Peer-to-Peer Lending and Investing
Did you know RateSetter, Australia’s top peer-to-peer lending platform, has helped with loans worth AUD $750 million since 2014? This shows how fast alternative investment options are growing in Australia.
RateSetter changed the game in Australia’s finance world. It started in 2012 and quickly became the biggest retail peer-to-peer lender by 2014. It works by matching investors with borrowers, offering a new way to lend and borrow.
RateSetter has changed the personal loan market in Australia. It has over 47,000 borrowers and 20,000 lenders. It offers loans from A$2,001 to $45,000, helping many people financially.
One key feature of RateSetter is its ‘Provision Fund.’ It protects investors from loan defaults. This fund, paid by borrowers, has always kept investors safe. It shows RateSetter’s commitment to safety and trust in the Australian fintech world.
Key Takeaways
- RateSetter has facilitated AUD $750 million in loans since 2014
- The platform connects over 47,000 borrowers with 20,000 lenders
- Loans range from A$2,001 to $45,000, both secured and unsecured
- The ‘Provision Fund’ offers unique protection for investors
- RateSetter charges a 10% fee on gross interest for its services
- The platform allows participation from individuals, trusts, and self-managed superannuation funds
Introduction to Peer-to-Peer Lending and RateSetter Australia
The way we get loans has changed with online platforms. Peer-to-peer (P2P) lending is a new way to lend money. It connects people who need loans with those who can lend, without banks.
What is Peer-to-Peer Lending?
P2P lending uses the internet to match lenders with borrowers. It’s cheaper than banks because it has lower costs. In 2014, the global P2P industry gave out about A$10 billion in loans. The UK and US markets grew by over 100% each year.
RateSetter’s Background and Growth in Australia
RateSetter came to Australia in 2012, led by CEO Daniel Foggo. It started officially in November 2014. It was the first to get a special license for P2P lending in Australia. Now, Plenti (formerly RateSetter) is Australia’s biggest P2P lender.
Key Features of RateSetter’s Platform
RateSetter offers different investment choices and interest rates. You can start investing with just $10, with no limit. It has fixed interest investments and loans for people and businesses.
| Feature | Details |
|---|---|
| Loan Amounts | A$2,001 to $45,000 |
| Loan Terms | 6 months to 5 years |
| Investment Options | 1 month to 7 years |
| Minimum Investment | $10 |
| Management Fees | 10% of interest earned |
RateSetter’s platform is popular with investors and borrowers. It has high customer satisfaction and offers a ‘green investment’ option for renewable energy.
How RateSetter Works: The Lending and Borrowing Process
RateSetter connects lenders with borrowers, offering a special place for crowdfunding investments. It’s easy to use, letting investors get into fixed-income investments and earn passive income.
Investors have four choices, with terms from one month to seven years. The ‘green investment’ option is great for those who want to support renewable energy.
To invest, users just need to open an account, put in money, pick an investment, set the amount, and choose a rate. Loans are matched quickly, making it easy for everyone.
Borrowers get good rates without hurting their credit scores during the quote. The platform uses tech to give investors good returns and keep terms good for borrowers.
RateSetter has done well since 2010, helping over £905 million in loans. It has matched 3.4 million lenders with borrowers. On average, each investor lends to 40 people, showing it can spread out investments.
The Provision Fund, which has made over £16 million, protects lenders from late payments or defaults. This makes RateSetter stand out in peer-to-peer lending, attracting those looking for stable, fixed-income investments.
RateSetter (Australia) Reviews: Peer-to-Peer Lending and Investing
RateSetter is a big name in the personal loan world, helping over 750,000 people. It’s known for being a top choice for those looking into alternative investments in Australia.
Investor Experience and Returns
RateSetter has been around for 10 years, always making money for its investors. They get an average of 8% interest on their loans, which last about two years. The platform has a special fund to protect investors’ money, but it’s facing some challenges lately.
Borrower Benefits and Loan Terms
RateSetter makes it easy for borrowers to get loans with good interest rates. They offer loans for different needs, both secured and unsecured. This makes it a go-to place for many people.
User Interface and Platform Functionality
The RateSetter website is easy to use, making it simple for everyone. You can apply for loans, manage your investments, and keep an eye on payments without hassle.
But, not everyone is happy with RateSetter. Recent reviews show mixed feelings:
| Review Metric | Percentage |
|---|---|
| Negative Reviews | 80% |
| Neutral Reviews | 20% |
| Positive Reviews | 0% |
| Users Dissatisfied with Customer Service | 40% |
| Users Unsatisfied with Company Transparency | 60% |
These numbers show RateSetter could do better to meet its users’ needs in the competitive market.
Risk Management and the Provision Fund
RateSetter focuses on risk management in peer-to-peer lending and investing. It uses its Provision Fund to protect lenders from defaults. This makes it a good choice for those looking for fixed-income investments.
Understanding the Provision Fund Concept
The Provision Fund is a safety net for investors. Borrowers pay into it based on their risk level. This helps balance risk and reward, making RateSetter appealing in the P2P lending market.
Historical Performance of the Provision Fund
RateSetter’s Provision Fund has a solid track record. It has covered about $2,000,000 in defaults in Australia. This shows how effective RateSetter’s risk management is.
Limitations and Considerations for Investors
Even with its success, the Provision Fund isn’t a complete guarantee. P2P investments don’t have government guarantees like banks do. The fund’s future depends on its ability to handle market changes.
| Aspect | RateSetter P2P Lending | Traditional Bank Products |
|---|---|---|
| Risk Management | Provision Fund | Government Guarantees |
| Average Returns | 5% – 7% | 0.62% (UK High Street Deposits) |
| Market Growth | 40% CAGR (UK Projection) | Slower Growth |
RateSetter’s risk management has its benefits. But investors should think carefully before diving into peer-to-peer lending and investing.
Comparing RateSetter to Other P2P Platforms in Australia
RateSetter is a top choice among peer-to-peer lending platforms in Australia. It has a unique Provision Fund and welcomes everyday investors. Let’s see how it compares to other fintech companies in Australia.
RateSetter, now known as Plenti, offers loans from $5,000 to $50,000 for up to five years. SocietyOne also provides loans in this range but for up to seven years. Both platforms are great for individual investors and super funds.
For business loans, MarketLend and Bigstone offer more. MarketLend goes up to $10 million, and Bigstone up to $5 million. ThinCats specializes in secured loans for SMEs, from $50,000 to $300,000.
| Platform | Loan Range | Loan Term | Investor Minimum |
|---|---|---|---|
| Plenti (RateSetter) | $5,000 – $50,000 | 6 months – 5 years | $10 |
| SocietyOne | $5,000 – $70,000 | 2 – 5 years | Not specified |
| MarketLend | $100,000 – $10 million | Varies | Not specified |
| ThinCats | $50,000 – $300,000 | Up to 5 years | No minimum, SMSF compatible |
RateSetter has grown a lot in Australia since 2014. It has written about AUD $750 million in loans. This makes it the top tech-led consumer lender in the country. It shows how popular peer-to-peer lending is becoming in Australia.
Conclusion
RateSetter has made a big mark in the Australian fintech scene. It offers a unique way to invest through peer-to-peer lending. With rates like 3.5% for a year and 5.5% for three years, it’s clear why more people are choosing this path.
The rise of RateSetter and others shows a bigger trend in P2P lending. For example, Lending Club in the US has funded over US$20.6 billion in loans by June 2016. In Australia, MoneyPlace, SocietyOne, and ThinCats are also changing the financial world.
While P2P lending can be tempting with its high returns, there are risks. Unlike banks, P2P investments aren’t protected by the Financial Services Compensation Scheme. RateSetter’s Provision Fund helps, but investors should be careful. Experts say to keep P2P investments under 10% of your pension to avoid risks.
As the fintech market in Australia grows, RateSetter is well-positioned for the future. With P2P investments possibly being added to specialized ISAs soon, more Australians might explore this option. It could help them diversify their investments.
Source Links
- Ratesetter Australia Review – what do you need to know?
- RateSetter – Australia’s disruptive P2P lender – Digital Innovation and Transformation
- Plenti review: P2P lending for investors
- RateSetter Australia – Submission in response to the Financial System Inquiry Final Report
- P2P Lending – How To Get A 24% Return – Strong Money Australia
- P2P Lending – Aussie Firebug
- Peer-to-peer lending: ‘I’m 19,050th in the queue to get my savings back’
- Ratesetter – Business Model Exemplar | Business Model Zoo
- RateSetter is rated "Poor" with 2 / 5 on Trustpilot
- RateSetter savers claim investments are being sold off ‘on the cheap’
- Peer to Peer Lending Platforms in Australia | Savings.com.au
- Does Peer-to-Peer Lending Still Work in Australia? – Finance Helipad
- After 10 years, has it paid to be a peer-to-peer lender?
- Plenti revives P2P model
