New investor bonus: £50 bonus when you invest £500+. Terms apply.

What is peer to peer lending?

How does peer to peer lending work

Peer to peer (P2P) platforms bring together people wanting to invest with borrowers that are looking for a loan, delivering better value to both.

Until now, people have not been able to lend directly to borrowers in a meaningful way. Instead they have had to put their money into a bank deposit and the bank then lends their money on.  Banks are regulated with the objective of keeping deposits safe, but this comes at a price: low returns that often can’t even match inflation.

P2P lenders like RateSetter are different to banks - we are optimised to deliver value. We offer the opportunity to put your money to work, by efficiently matching investors with borrowers, allowing investors to directly enjoy the risk and returns.  We have an excellent track record of delivering steady, healthy returns to investors since 2010.

P2P lending is becoming a popular investment for people that are diversifying their investment portfolio, because lending sits in the gap between the safety, but low returns of cash deposits and the potentially large returns, but volatility of shares.

Benefits of peer to peer lending with RateSetter

We know that life is complicated enough, so we aim to make investing with RateSetter as simple and easy as possible.

This means that investors simply choose:

  • how much to invest, from £10 upwards

  • the level of access required, from easy access to longer term investments. Find out more about access here.

RateSetter takes care of assessing loan applicants, matching investments to loans and collecting and returning repayments to investors. You can read more about investing with us here.

By investing through RateSetter you are entering into credit agreements as a lender with one or a combination of individuals or businesses as the borrower. We help investor manage risk by only lending to creditworthy borrowers. Find out more about who we lend to here. Our Provision Fund spreads each investor’s risk across the whole loan book and provides a buffer against poorly performing loans. RateSetter borrowers pay into the Provision Fund and, if a borrower misses a payment, the Fund steps in to reimburse the investors. Find out more about our Provision Fund here.

As a result, to date, every individual investor has received the capital and interest that they expected.  This is a record we are proud of, but we always like to be clear that it is not a guarantee for the future.  Investments with RateSetter are not covered by the Financial Services Compensation Scheme and capital is at risk.

RateSetter has a customer satisfaction rating of 'Excellent' on independent review website, TrustPilot.

We are fully regulated by the Financial Conduct Authority.