RateSetter Review


Here at Extras, we’re all about saving our readers money and giving you the chance to make some money too. 

Whether you’re an investor, entrepreneur, business owner or just someone looking to save a little money or earn a little cash on the side, we have a great RateSetter review below. 

If you’ve taken a look online for ways to earn money, you’ve likely come across platforms that give you the chance to loan your cash, for a return. You’ll essentially be able to loan out an amount of money, choose the interest rate and sit back and watch your income roll in. 

One of these platforms is RateSetter, and it’s arguably one of the best out there, and we’ll be taking a look at it below. 

A Bit About Peer-to-Peer or P2P Lending

For those new to private lending or peer to peer lending, we’re glad to say it is really quite simple — and legal too. 

Essentially, P2P lending works by giving you the ability to lend your own money to an individual or a business. You’ll then be in charge of the interest rate for this cash and the lender will be expected to pay back the interest either in increments or as a lump sum at the end of the lending period. 

As you’ll be going around the big banks, lenders and borrowers can often expect a better deal in that there’s smaller overhead and more room for profit for the lender, and lower fees and complications for the borrower. 

There’s also a lower risk than when working with shares, stock or crypto too. A win win for everyone looking to earn on their savings. 

You can even drag your interest rates up to as high as 13 per cent or more and still be able to find a borrower quite easily. 

To end, the P2P system is quite attractive in that it’s a means of borrowing and lending for average people. You’re able to lend out smaller amounts and borrowers are able to take out smaller loans, which big banks don’t like too much. 

An Overview of RateSetter

When it comes to RateSetter, all borrowers and lenders can rest assured that their investment and loan amount is safe in that there’s a ‘Provision Fund’ which offers protection should things go awry for a borrower or a lender.

The RateSetter website also states that there’s a great £35 million buffer fund in place that will stand in if there’s an issue with a loan or a repayment. 

Keeping things brief, the Provision Fund is the ultimate peace of mind for lenders. It means that even when the market gets a little wobbly, the fund is in place to make sure that interest rates are paid out and borrowers aren’t really able to defraud their lenders. 

RateSetter’s Investment Terms 

One good perk of how RateSetter works is in that you’re not personally choosing who you’re lending your money too. You will simply offer the funds and let RateSetter do the rest. 

There are currently three investment or lending tiers on the platform, with a Rolling, 1-year and 5-year loan term which feature 3.6 per cent, 4.5 per cent and 6.3 per cent interest rates respectively. 

As you’d have guessed, these rates are massively higher than some of the savings rates you’ll find from the Big Four Banks, which have rates as low as 0.8 per cent in some cases. 

Back to the lending process, RateSetter takes the matchmaking out of our hands and lends to whoever best suits a loan. This means you don’t have to do any of the work here. 

To add, the insurance also stands in should something go wrong, and defaulting is minimal. 

In all, here at Extras we are confident in saying that the risk here is so incredibly low it’s not worth being worried about. Of course, if the entire company goes under, you’ll be at risk of losing your loan amount, though this is highly unlikely. 

Suppose You Want a Big Return

As the name suggests, RateSetter gives you the chance to set the rate of interest paid on your loan amount. 

You’re able to head over to the signup page and during registration from there you’re able to select between a few different account types. 

Choose your preferred account, either an Everyday Account or an ISA Account. 

When you’re all registered and ready to go, you’re able to choose the Invest option on the account’s dashboard. 

After you hit invest, there’s the option to choose a timeframe and the investment size. For testing, we selected the 1-year option and choose a $1,000 deposit. 

Where things become a little customisable, the platform gave you the ability to work on selecting your rate. There’s the market rate option, which will be most visible on this page, or there’s the custom rate, which hits a whopping 10 per cent. 

Once you’ve selected a rate, you’ll then need to wait for a borrower to accept the amount and the rate and take out a loan with you. We’ve found that the quickest response comes from rates around 5 to 7 per cent. 

You’re able to climb a little higher beyond these rates if you’re willing to sign up for a referral rate amount, which gives you a bonus. You’ll see a $100 or £100 amount added into your account, as well as your interest amount. 

Final Thoughts

To end, at Extras, we’d stand behind the RateSetter platform as an impressive and simple tool for getting a great return on your hard earned savings. 

Oftentimes bank accounts don’t offer the best savings rates, and sometimes it’s more costly to hold your money in the bank with the fees chewing away at the rates offered. 

By working with P2P lending platforms, you’re able to get a pretty hefty interest amount on money that would otherwise be earring nothing at all. It’s one sure fire way to make your money work for you. 

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