Frequently Asked Questions

 

Most asked

 

Who can invest with RateSetter?

To invest with RateSetter you must:

- have a UK bank account,

- be at least 18 years of age,

- be a UK resident

We will also need to be able to confirm your identity. We can usually do this automatically, but occasionally we will have to confirm details with you directly. All Investors are responsible for paying UK income tax on their interest earned through RateSetter. The tax you have to pay is dependent on your individual circumstances and subject to change. It is your responsibility to pay the correct tax on your earnings through RateSetter.

Register to Invest

 

What happens if a Borrower misses a payment?

All borrowers pay a risk-adjusted fee into the Provision Fund. If a borrower misses a payment, the Provision Fund reimburses investors; if the loan goes into default, the Provision Fund takes over the loan and repays outstanding capital to the investors.

View Provision Fund

 

How does the Provision Fund work?

RateSetter pioneered the Provision Fund concept in peer-to-peer lending as a way to offer greater predictability for investors, allowing them to focus on setting the rate they require for their money. It has ensured that no individual investor has ever lost a penny, although past performance is no guarantee of future success. All borrowers pay a risk-adjusted fee into the Provision Fund. If a borrower misses a payment, the Provision Fund reimburses investors; if the loan goes into default, the Provision Fund takes over the loan and repays outstanding capital to the investors.

 

What is "Market Rate"?

Once a loan is matched, a Lender is repaid over the term established in the contract. When a repayment is made, the Lender decides whether to reinvest or withdraw. The “Reinvestment” tab in “Your Lending” allows you to automate these decisions. The “Market Rate” setting is one of these reinvestment options - it is set daily and is designed to ensure the Lender’s money is re-invested as quickly and efficiently as possible. How it works: The Market Rate is automatically calculated in each market every day. The rate is set by taking a weighted average of all the rates transacted during the previous day between 6am and 10pm. The Lender’s repayment is then submitted to the market as an order. If the order is not matched on that day, it will be updated to the next day’s Market Rate should it be lower.

View Current Rates

 

Does RateSetter ever lend through its own Market?

Yes, from time to time RateSetter lends directly into its market in secondary loans to facilitate access to lenders. This is always limited and in no way means that access is any more guaranteed.

 

Why do people borrow through RateSetter not a bank?

RateSetter only offers loans to Borrowers who have decided to search for an alternative to a bank. RateSetter loans are listed on most of the price comparison sites and we work closely with them to attract creditworthy Borrowers. Borrowers choose RateSetter because they can get a better rate than their bank will offer, with the promise of a quick application process, great customer service and no early repayment penalties. These features have seen RateSetter's loan products highly ranked by both Personal and Commercial Borrowers as well as consumer organisations. It's important to recognise that RateSetter is competing with mainstream banks and building societies for those Borrowers; that they are not people who cannot find finance elsewhere.

 

How do I change the rate of an offer already on the market?

Please login to your account and click on 'Your Lending'. On the left hand side of the page, there is a menu of options. Directly under the 'Your Portfolio' section, please click on the relevant market which contains the order you would like to change. When the main market page comes up, click on the plus sign next to 'Unmatched' to expand that section. You will then need to click on the 'change' link on the right-hand side of the order number.

General

How do I make a complaint?

At RateSetter we put our customers' best interest first. We recognise that award winning customer service is not just about the good times, it’s about how we help you when things don’t go as planned. That’s why if we make a mistake, we promise we'll go out of our way to make it right. If you are unhappy with any aspect of our service and would like us to look into your concerns further, please do not hesitate to get in contact Click here to see how.

 

How is RateSetter funded?

Since launching in 2010 RateSetter has raised over £40m in equity from private investors and investment funds.

Find out more

 

Can I see previous rates matched on RateSetter?

We display our historical rates and market information within our website.

Historic Rates

 

How can I contact you?

Address: RateSetter, 6th Floor, 55 Bishopsgate, London, EC2N 3AS

Email address: [email protected]

Call RateSetter on 0203 142 6226

 

Does RateSetter ever lend through its own Market?

Yes, from time to time RateSetter lends directly into its market in secondary loans to facilitate access to lenders. This is always limited and in no way means that access is any more guaranteed.

 

Why do people borrow through RateSetter not a bank?

RateSetter only offers loans to Borrowers who have decided to search for an alternative to a bank. RateSetter loans are listed on most of the Price Comparison sites and we work closely with them to attract creditworthy Borrowers. Borrowers choose RateSetter because they can get a better rate than their bank will offer, with the promise of a quick application process, great customer service and no early repayment penalties. These features have seen RateSetter's loan products highly ranked by both Personal and Commercial Borrowers as well as consumer organisations. It's important to recognise that RateSetter is competing with mainstream banks and building societies for those Borrowers; that they are not people who cannot find finance elsewhere.

 

How do I change the rate of an offer already on the market?

Please login to your account and click on 'Your Lending'. On the left hand side of the page, there is a menu of options. Directly under the 'Your Portfolio' section, please click on the relevant market which contains the order you would like to change. When the main market page comes up, click on the plus sign next to 'Unmatched' to expand that section. You will then need to click on the 'change' link on the right-hand side of the order number.

 

Can I draw an income from the interest and reinvest the capital?

Yes, we have a new account feature where you can select to withdraw the interest from an investment, whilst re-investing the capital. This will allow you to draw an income, whilst leaving the capital untouched. Alternatively, you can still choose to reinvest all the funds (capital and interest) if you wish to. You can also control these settings on each individual market through your reinvestment page. We have a new Auto-Withdrawal feature, which enables you to choose the intervals at which the funds are sent and choose the specific day on which the funds are withdrawn. If you would like any help using this new feature, please contact our customer service team on 0203 142 6226 and they will be happy to advise you. Please note that you will need to have made a successful withdrawal before being able to use the auto-withdrawal feature.

 

Do RateSetter lend to businesses?

Yes we do lend to businesses. These are predominantly loans with a value between £25k and £750,000, however larger loans are considered on a case by case basis. We also undertake real estate lending, you can find out more about real estate loans in the real estate FAQ. Our commercial loans are taken through a rigorous credit approval process. We also look for certain eligibility criteria before businesses would be considered.

• UK based; businesses operating within the UK

• Financials; businesses must provide their last 2 years audited accounts and/or management accounts

 

Do RateSetter offer real estate loans?

RateSetter do offer some real estate loans to experienced property developers and investors with excellent track records. We assist them with funding new developments and renovations, which are primarily residential, plus existing investment properties. Our real estate loans are up to £7.5m. RateSetter fully assesses the people behind the business and the underlying real estate to ensure the funding is viable. We undertake this on a conventional basis, looking at financial information both historic and projected, but also a hands on review of the real estate. Our team of underwriters have lengthy experience and fully qualified to make an assessment on each and every deal.

 

Why do RateSetter provide business investing as well as retail?

The more people who join the RateSetter marketplace and the wider the participation, the stronger the market gets - which benefits everyone. Our job is to build the diversity of the RateSetter marketplace so we can provide our investors with opportunities that deliver the returns they expect alongside the detailed borrower assessment they have become accustomed to and our borrowers with a source of reliable funding at competitive rates. All of our lending undergoes rigorous assessment by our specialist credit underwriting teams against stringent criteria. We carefully examine their credit file, personal or business finances and circumstance to understand their financial position and ability to service the loan.

 

What are RateSetter's default rates?

At RateSetter we’re committed to providing transparent information, including what our default rates are. You can get stuck in to the numbers on the RateSetter loan book performance page.

 

Is [email protected] a RateSetter email address?

Yes, this is one of our email addresses. We use it to deliver RateSetter service and promotional messages. Please add [email protected] to the safe sender list in your email software, this will ensure you don't miss any of our communications.

 

How does RateSetter manage conflicts of interest?

In line with FCA requirements, RateSetter has a policy to identify and manage any conflicts of interest that arise as a result of business activities. We actively monitor for and identify conflicts of interest and ensure mitigation of any risk of customer detriment that could can result. Our policy is to always act in the best interests of our customers and uphold the highest moral and ethical standards at all times.

How RateSetter works

Is there a limit to how much people can borrow through RateSetter?

Every borrower is given an individual limit depending on their credit history, financial position and ability to afford the loan and taking into consideration whether the loan is secured or unsecured.

 

Who can invest with RateSetter?

To invest with RateSetter you must:

- have a UK bank account, and

- be at least 18 years of age.

- be a UK resident

We will also need to be able to confirm your identity. We can usually do this automatically, but occasionally we will have to confirm details with you directly. All Investors are responsible for paying UK income tax on their interest earned through RateSetter. The tax you have to pay is dependent on your individual circumstances and subject to change. It is your responsibility to pay the correct tax on your earnings through RateSetter.

Register to Invest

 

What's the minimum and maximum amount I can invest?

Our minimum investment amount is £10 and there is no maximum investment limit, although RateSetter might limit the amount an individual can invest in any single market.

Register to Invest

 

Does RateSetter charge Investors a fee?

As of May 2014, you can invest funds through RateSetter without incurring any investor charges or fees. Contracts formed before this date were subject to a 10% Investor fee.

RateSetter Fees

 

Can a Company or Trust invest through RateSetter?

Yes, if investing money isn’t its main business, a Company or Trust can invest with RateSetter as part of managing their treasury and cashflow.

 

What happens if a Borrower misses a payment?

All borrowers pay a risk-adjusted fee into the Provision Fund. If a borrower misses a payment, the Provision Fund reimburses investors; if the loan goes into default, the Provision Fund takes over the loan and repays outstanding capital to the investors.

View Provision Fund

 

Should I diversify my Loans?

RateSetter does not split your loans across multiple Borrowers. Our Provision Fund is there to mitigate the risk of individual Borrowers defaulting – if a Borrower fails to pay, then the Provision Fund steps in to compensate the Lender. Every Borrower on RateSetter has contributed to the Fund: this means that there should be no reason to diversify your loans, because the risk of default is already diversified across all the Borrowers and has accumulated in the Provision Fund. You will often find that you do have multiple loans or contracts as your money is matched in the normal course of things, but there is no reason to actively manage your savings to seek out multiple Borrowers.

The Provision Fund is well capitalised – you can see the details of the Fund in real time, including any claims. As you would expect, the size of our largest potential single loan is in direct proportion to the capitalisation of the Fund: we wouldn’t allow the Fund to become overly reliant on any single Borrower. The most important thing is that we are finding the right kind of people, who are creditworthy, reliable and can afford their monthly repayments. An unfortunate fact is that we will have the occasional default as circumstances change: at this point the Provision Fund will be there to protect the Lender (see “Who am I lending to?” for more information).

View Provision Fund

 

Who am I lending to?

RateSetter is an anonymous service and all credit, affordability and suitability checking is done by RateSetter, and is not displayed on our website. Some other peer-to-peer sites let you judge the potential borrowers so you can make a decision about a specific borrower or types of borrowers. At RateSetter we do the work for you – we take borrower applications, vet them, and take a Credit Rate from successful applicants which grows the Provision Fund. We think this is a simple way of managing risk. The Personal and Commercial borrowers who are accepted are creditworthy and have been rigorously assessed by our specialist Credit Underwriting Teams against stringent criteria. We carefully examine their credit file, personal or business finances and circumstance to understand their financial position and ability to service the loan. The majority of loans are unsecured but we also write some secured loans. We don’t judge simply on the basis of how much they want to borrow: it is very important to understand whether the loan is affordable for the borrower in the context of monthly personal or business outgoings. This stringent process means that we actually decline the majority of applications. Those who are accepted are exactly the people or businesses that our investors would expect: creditworthy borrowers who can sensibly afford a loan. To find out more about who we lend to please click here.

 

How do I transfer funds into RateSetter?

Registered RateSetter members can transfer funds to RateSetter by Bank Transfer, Debit Card, Regular Lender Instruction or Standing Order - the terms for each are set out in the table below. To transfer funds, log into the 'Lending' section of your account and follow the simple instructions under the "Money In" tab. Using our Regular Lender feature you can now arrange for monthly deposits to be paid into your RateSetter account via Direct Debit Instruction. This feature also allows you to automatically lend funds in the market of your choice. We aim to credit all funds to your RateSetter account within 1 working day. To set up a Regular Lender instruction, simply login to your RateSetter account and follow the instructions under the "Regular Lender" tab.

 

Deposit Method

Credited to Account

Fees

Minimum Deposit

Bank Transfer

Same day before 5:30pm

Free

£10

Debit Card

Immediate

Free

£10

Standing Order

Next working day before 5:30pm

Free

£10

Regular lender

Next working day before 5:30pm

Free

£10

 

How do I withdraw Funds from RateSetter?

Withdraw from your Holding Account

To withdraw funds from RateSetter to your designated bank account, log-in to 'Your Account' and click the "Withdraw"link on the left hand menu. You can set your account to automatically transfer funds from your RateSetter Holding Account to your bank account. You can change this at any time. This can be set to be done once per week or once per month. You can select to have ALL of your current balance withdrawn, or a fixed amount each time. Note that withdrawal requests are always processed on the next working day. You can withdraw available funds from your "Holding Account" at any time using the methods in the table below.

 

Withdrawal Method

Credited to Bank Account

Fees

Faster Payments

Next Day by 4pm

Free

 

How does the Provision Fund work?

RateSetter pioneered the Provision Fund concept in peer-to-peer lending as a way to offer greater predictability for investors, allowing them to focus on setting the rate they require for their money. It has ensured that no individual investor has ever lost a penny, although past performance is no guarantee of future success. All borrowers pay a risk-adjusted fee into the Provision Fund. If a borrower misses a payment, the Provision Fund reimburses investors; if the loan goes into default, the Provision Fund takes over the loan and repays outstanding capital to the investors.

 

How is risk managed?

The main risk to investors is that borrowers do not repay their loans. RateSetter seeks to mitigate this risk in a number of ways:

Excellence in underwriting: robust credit and affordability checks on all borrowers.

Portfolio management: Our loan book is diversified across many borrowers of different types and channels.

The Provision Fund: if a borrower misses a payment, the Provision Fund reimburses the investor; if the loan goes into default, the Provision Fund takes over the loan and repays outstanding capital to the investors.

How We Manage Risk

 

Who is behind RateSetter?

RateSetter was founded in 2010 by ex-Lazard investment banker Rhydian Lewis and former Ashurst lawyer Peter Behrens. The business has quickly garnered a user base of more than 250,000 RateSetters, with peer to peer lending taking off in the UK.

Find out more

 

Can I see previous rates matched on RateSetter?

We display our historical rates and market information within our website.

Historic Rates

 

Why is my actual rate of return less than what was displayed on the website?

Our displayed rates of return assume that an Investor is reinvesting their repayments in the same market, at the same rate. If you have calculated your rate of return and it is less than the one which was displayed on the website, this may be that you have not reinvested your repayments, or have reinvested them at a lower rate than the original rate you agreed.

 

What is RateSetter?

RateSetter is a Peer-to-Peer finance company, which essentially means that instead of putting your money into a savings account, you can lend it direct to Borrowers and enjoy a higher return. It’s a win-win situation; you get a higher interest rate and the Borrowers get a lower APR for their loan.

Find out more

 

What is "Market Rate"?

Once a Loan is matched, a Lender is repaid over the term established in the contract. When a repayment is made, the Lender decides whether to reinvest or withdraw. The “Reinvestment” tab in “Your Lending” allows you to automate these decisions. The “Market Rate” setting is one of these reinvestment options - it is set daily and is designed to ensure the Lender’s money is re-invested as quickly and efficiently as possible.

How it works: The Market Rate is automatically calculated in each market every day. The rate is set by taking a weighted average of all the rates transacted during the previous day between 6am and 10pm. The Lender’s repayment is then submitted to the market as an order. If the order is not matched on that day, it will be updated to the next day’s Market Rate should it be lower.

View Current Rates

 

If I deposit funds into my account, how long before it is matched to a Borrower?

This can vary from a few minutes to several days or more. It all depends on what rate you are offering and what the Borrowers are willing to accept.

 

Why borrow through RateSetter?

Many Borrowers choose to borrow through RateSetter as our APR rates are often much cheaper, we have no early repayment fees and accounts are easy to manage online. Add that to the speed of our application process (instant quote available online, and 1 day to receive a credit decision), and it’s a winner. Not to mention our lovely customer service team, who are available at the end of the phone to help you with any questions you may have.

Get a Smart Quote

 

How do I change the rate of an offer already on the market?

Please login to your account and click on 'Your Lending'. On the left hand side of the page, there is a menu of options. Directly under the 'Your Portfolio' section, please click on the relevant market which contains the order you would like to change. When the main market page comes up, click on the plus sign next to 'Unmatched' to expand that section. You will then need to click on the 'change' link on the right-hand side of the order number.

 

Can I invest funds through a SIPP?

Yes, peer-to-peer loans can be included in SIPPs. If you are interested in lending through your SIPP, please ask your SIPP provider. Peer-to-peer lending is a relatively new form of investment and so understandably a lot of SIPP providers are unsure about it but technically there is no reason you cannot include your peer-to-peer investments like RateSetter in your SIPP. 

 

Can I access my money on loan in an emergency?

You can access your money that is on loan at short notice using the ‘Release Your Investment’ function. This will allow you to sell your contracts provided there is a new lender available to match your existing loans. On the ‘Money Out’ page click through to Release your Investment. You can then enter the amount that you would like to withdraw from any given market. Click "Proceed to Quote" and RateSetter will automatically identify the amount of loans to be sold to achieve the amount you would like to access. It will show the calculation of the interest to be paid and any fees due. You can then click ‘confirm’ to proceed. 

The Release Your Investment function can be found by clicking on the "Money Out" tab on the left hand side menu of the members area

 

What is Regular Investor?

The Regular Investor feature allows you to set up an automated investing instruction on your RateSetter account. It consists of two parts - a Direct Debit instruction to your bank, and an investing instruction for your RateSetter account. Each month, RateSetter will draw down your payment from your bank, and automatically submit it as a loan request according to your instructions. Regular Investor is set up by filling in the simple form, and found by clicking the "Regular Investor" link in the "Instructions" menu of your account.

 

What is "Your Rate"?

Once a Loan is matched, a Lender is repaid over the term established in the contract. When a repayment is made, the Lender decides whether to reinvest or withdraw. The “Reinvestment” tab in “Your Lending” allows you to automate these decisions. For those RateSetters who want control you can select your own rate to reinvest at. This will not be impacted by the market and offers your money at the exact rate you set. Selecting this option does mean that your money could sit on the market not earning interest if your rate is too high. Similarly, if you set your rate too low you may not get the maximum return that is possible. It does, however, give you complete control.

Payments

 

What happens if a Borrower misses a payment?

All borrowers pay a risk-adjusted fee into the Provision Fund. If a borrower misses a payment, the Provision Fund reimburses investors; if the loan goes into default, the Provision Fund takes over the loan and repays outstanding capital to the investors.

View Provision Fund

 

 

How do I transfer funds into RateSetter?

Registered RateSetter members can transfer funds to RateSetter by Bank Transfer, Debit Card, Regular Lender Instruction or Standing Order - the terms for each are set out in the table below. To transfer funds, log into the 'Lending' section of your account and follow the simple instructions under the "Money In" tab. Using our Regular Lender feature you can now arrange for monthly deposits to be paid into your RateSetter account via Direct Debit Instruction. This feature also allows you to automatically lend funds in the market of your choice. We aim to credit all funds to your RateSetter account within 1 working day. To set up a Regular Lender instruction, simply login to your RateSetter account and follow the instructions under the "Regular Lender" tab.

 

Deposit Method

Credited to Account

Fees

Minimum Deposit

Bank Transfer

Same day before 5:30pm

Free

£10

Debit Card

Immediate

Free

£10

Standing Order

Next working day before 5:30pm

Free

£10

Regular lender

Next working day before 5:30pm

Free

£10

 

How do I withdraw Funds from RateSetter?

Withdraw from your Holding Account

To withdraw funds from RateSetter to your designated bank account, log-in to 'Your Account' and click the "Withdraw"link on the left hand menu. You can set your account to automatically transfer funds from your RateSetter Holding Account to your bank account. You can change this at any time. This can be set to be done once per week or once per month. You can select to have ALL of your current balance withdrawn, or a fixed amount each time. Note that withdrawal requests are always processed on the next working day. You can withdraw available funds from your "Holding Account" at any time using the methods in the table below.

 

Withdrawal Method

Credited to Bank Account

Fees

Faster Payments

Next working day by 4pm

Free

 

 

Why is my actual rate of return less than what was displayed on the website?

Our displayed rates of return assume that an Investor is reinvesting their repayments in the same market, at the same rate. If you have calculated your rate of return and it is less than the one which was displayed on the website, this may be that you have not reinvested your repayments, or have reinvested them at a lower rate than the original rate you agreed.

 

 

If I deposit funds into my account, how long before it is matched to a Borrower?

This can vary from a few minutes to several days or more. It all depends on what rate you are offering and what the Borrowers are willing to accept.

 

Can I draw an income from the interest and reinvest the capital?

Yes, we have a new account feature where you can select to withdraw the interest from an investment, whilst re-investing the capital. This will allow you to draw an income, whilst leaving the capital untouched. Alternatively, you can still choose to reinvest all the funds (capital and interest) if you wish to. You can also control these settings on each individual market through your reinvestment page. We have a new Auto-Withdrawal feature, which enables you to choose the intervals at which the funds are sent and choose the specific day on which the funds are withdrawn. If you would like any help using this new feature, please contact our customer service team on 0203 142 6226 and they will be happy to advise you. Please note that you will need to have made a successful withdrawal before being able to use the auto-withdrawal feature.

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