Peer to peer lender RateSetter launches in Australia, providing everyday Aussies with investment opportunities
UK-based peer to peer lender RateSetter has hit Australian shores as the first P2P platform to provide everyday Australians with investment opportunities.
Peer to peer platforms work by cutting out the banks from the borrowing equation, connecting creditworthy borrowers directly with investors. While P2P platform SocietyOne has been in Australia since 2012, so far only wholesale and sophisticated investors have been able to invest in the P2P lending platform (investing into a portfolio of consumer loans).
RateSetter Australia executive officer Daniel Foggo said RateSetter is the first and only P2P lender operating in the Australian market licenced to offer all Australians, “not just institutions and sophisticated investors,” the opportunity to invest and achieve better rates on their savings.
“RateSetter offers investors attractive returns by connecting them directly with creditworthy borrowers on our simple, secure online platform. Without a traditional middleman taking a cut and with our lower overheads, we can pass on savings in the form of better rates”, he said.
RateSetter is aimed at attracting creditworthy borrowers looking for a better deal on personal loans by offering competitive interest rates. While rates start from just 7.90% on its Unsecured Personal Loan, RateSetter uses a risk-based tier system, which means the rate you receive will depend on your credit history.
Investors can lend from as little as $10 for terms from one month to five years and interest rates are set directly by the lender and borrower.
RateSetter uses a credit screening systems to ensure loans are “high quality" and is also the first P2P lender to introduce the concept of a provision fund to help protect investors from default. However, keep in mind the provision fund is not a guarantee or insurance product.
For more information on peer to peer lending in Australia read our in depth guide here.