Your money is automatically reinvested to ensure it keeps earning interest rather than sitting idle in your holding account e.g. as money in your 5 year product is paid back it will instantly be reinvested back into the 5 year product at the market rate on that day or at a rate you have preset.
Alternatively you can customise your reinvestment settings and choose to either reinvest into a different product (e.g. the monthly product) or have your money transferred to your holding account ready to withdraw.
Something else to bear in mind is that our borrowers can pay off part of or all of their loan early, at any time and without incurring any early repayment fees. If a loan is repaid early, you will receive the outstanding capital linked to that contract and any interest that has accrued up until the point of early borrower repayment.
Our loans are repaid via a monthly installment by Direct Debit. Additional or full repayments can be made by Debit Card or Direct Debit Instruction online at any time. The dates of repayments are defined according to the borrower's loan schedule, which will be reflected in the 'Your Portfolio' section of the website. If a loan is repaid early, we'll automatically follow your reinvestment settings.
RateSetter is a live marketplace where the rates are set by investors and borrowers. It means rates change day-to-day, usually only by small amounts. So, one day you could get a good deal but miss out the next. It's the same with any financial product - if you're an investor and commit to a fixed, long-term rate, you want to see rates fall. If you keep it flexible with a shorter-term product, you're happy to see rates rise
because you can soon reinvest at that higher rate. It's the same for borrowers. 'Fixed or variable rate?' is a standard question mortgage seekers face.
Here at RateSetter, we don't control whether rates rise or fall. Our investors and borrowers are the rate setters.
When you invest, you choose the best interest rate available based on supply and demand at the time. Most investors choose the market rate because it’s simple and quick. But you can request a higher rate. Eg. The 1 Year Fixed Term is showing a rate of 3.7%. But you want to earn more. So you can request a higher rate, say 3.9%.
If there’s demand from borrowers, your rate will be matched and you’ll start earning 3.9%. If not, your money will sit on the market earning no interest, until there is demand. It could be there for an hour, week, even longer, there’s no set time. So it’s worth thinking carefully about the rate you set and how long you’re happy
to not earn interest. The closer the rate you request is to the current market rate, the quicker you’ll start earning interest.
Check it out when you come to invest.
We’ll always email you when you have money in your holding account that’s doing nothing. After all, it’s in both our interests to have your money earning interest every second of every day. RateSetter relies on matching investor’s money with demand from borrowers. Unmatched money remains on market or in your Holding account, earning nothing.
Our marketplace works on an “order-driven exchange” basis. The most competitive rate is at the front of the queue, with equally priced orders matched on a ‘first come, first served’ basis. Investors are responsible for their orders. We’ll let you know if any of your money remains unmatched.
But even after the taxman's taken his slice, the returns you'll get from RateSetter can be way above what you'll get on the high street. 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.
To make paying the taxman easier, we'll email you an annual statement showing how much interest you've earned. You can access this any time via your personal account page.
The good news is that RateSetter qualifies for the new Personal Savings Allowance so you will be able to include RateSetter interest in that allowance.
From April 2016 it will be possible to include your RateSetter investment in an Innovative Finance ISA. Interest earned on investments held in the new ISA will be tax free. This is great news as investment in a RateSetter ISA will be the perfect middle ground between the pitiful returns from cash ISAs and the high risk and volatility of stocks and shares ISAs.
The details of how the new ISAs will work are currently being drawn up by the Treasury and will be announced soon. Rest assured that we will share relevant information with you as soon as we have it.
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Hopefully you'll find answers to your questions in our FAQ section.
Still need help? That's fine. Just call us on 0203 142 6226 or email firstname.lastname@example.org
Here's where you can view, select and compare previously matched market rates on RateSetter. Also, check out our default and coverage ratios and see a guide to matched volumes over time.