-Access - 3% advertised rate, with no fee to release your investment early -Plus - 3.5% advertised rate, with an early release fee of 30 days of interest -Max - 4% annualised rate, with an early release fee of 90 days of interest.
All rates are after fees but before tax. The minimum investment with RateSetter is £10, and you can invest in either a general 'everyday' account or in RateSetter's Innovative Finance Isa, where returns are paid tax-free.
While most loans are issued to private individuals, a significant amount is also issued to businesses, property developers and via third party specialist lenders (e.g. vehicle loans and guarantor loans). The rate you receive is a function of supply and demand on the market, and will vary according to when you invest.
Ratesetter is safe because of its “Provision Fund“. This basically pools risk between all lenders – so if you have a borrower who stops making repayments, the fund will immediately kick in and make up the difference. The Provision Fund it's how they manage to make unsecured consumer loans without an investor ever making a loss. The provision fund is currently only funded at 116% of expected losses.
RateSetter is one of the ‘Big 3’ UK platforms, alongside Zopa and Funding Circle. This means that it has major backing behind it, a well functioning website, and good liquidity.
Peer to peer lender RateSetter has reported that for the year March 2019 losses have dropped from £27.5 million in the previous year to £4.2 million. The company claims it has taken a “big step towards profitability.
RateSetter lenders have now delivered more than £2 billion in loans to people and businesses across the UK and in doing so have earned over £76 million in interest.