Lend $2000 for 1, 3 or 5 Years on Ratesetter and Get $100 + Interest

8811

Lend $2000 for 1, 3 or 5 Years on Ratesetter and Get $100 + Interest

Go to Deal

machej on 31/08/2016 - 17:43 ratesetter.com.au (3168 clicks)
Last edited 01/09/2016 - 14:15 by 2 other users

From their website:

Attractive returns: RateSetter offers attractive returns by connecting you with creditworthy borrowers
Simple: simply select a term, amount, and rate you wish to earn
Provision Fund protection: the Provision Fund can help protect you from borrower late payment or default
A peer-to-peer pioneer: the RateSetter group is one of the largest peer-to-peer lenders in the world

Current rates (Changes daily but usually not massively):

1 year @ 5.5% PA
3 year @ 8.5% PA
5 year @ 9.9% PA

Personal experience:

I have used Ratesetter for over 1 year now and have been pleased with the support and return. The provision fund (which is a form of protection, not to be confused with insurance) has held up rather well and this means that if someone were to default on some of my loans then I most likely wouldn't have a loss. It's best to spread your loans into smaller lots to mitigate risk. I've found that sometimes people pay their loans back early but you can easily lend the funds out again. Make sure your funds are either automatically withdrawn to your designated bank account or relent out otherwise you will miss out on interest if you have money sitting in the non-interest account. Each year Ratesetter automatically makes an annual tax summary so you don't have to worry about the complexities of having tiny amounts of money leant out at slightly different rates.

Ratesetter also publishes their loan book of borrowers which you can find here: http://static.ratesetter.com.au/loanbook/20160630LoanBook.xl…

You can deposit fairly easily via Bpay. It's worth doing some research on the risk and reading the PDS to make sure it's right for you.

For the first 1,000 referrals, with a maximum of 5 referrals per person

MOD: Please

Do not add your referral link in the comments.
Use the user-referral system to add your referral link to RateSetter. Click on the edit link in the grey Referral Links box below.

Warning: This is an investment with a company that is not an Authorised Deposit-taking Institution (ADI). The Australian Government guarantee does not apply in the event of the company going bust. Please consider whether it is appropriate for you.

Referral Links

Referral: random (2)

$50 for referrer and $50 for referee after investing $1,000 in the 5-year income market.

Financial Lending P2p

23 Sep 2016

Related Stores

Plenti (Previously RateSetter)

closed Comments

gstfree on 31/08/2016 - 19:27

+3

P2P is a very risky and complicated financial investment product. I am not familiar with Australian regulations. As it involved too much risks and complicated structure, ozbargain should not promote this kind of "deals". This could potentially make uninformed investors made a huge loss.
- expertreader on 31/08/2016 - 19:31
  
  +12
  
  What's your opinion about Eneloops?
  - machej on 31/08/2016 - 19:36
    
    +4
    
    Never buy Eneloops at full price. Just wait a couple of hours and check Ozbargain.
  - Iggemo on 31/08/2016 - 19:38
    
    +2
    
    Eneloops are always a sound investment. One should purchase Eneloops any opportunity that arises regardless of how many they already own. As a great philosopher once said: without Eneloops, life would be a mistake
  - gstfree on 31/08/2016 - 20:17
    
    +1
    
    Consumables with no significant financial risk :)
- stickyfingers on 31/08/2016 - 19:36
  
  +1
  
  RateSetter is a relatively safe platform compared to a lot of other P2P lending platforms out there. As with anything in the investment market it can be risky, and you should always do plenty of research and keep a close eye on your money.
- wizzlesticks on 31/08/2016 - 21:30
  
  -1
  
  I agree. OzBargain is not what it used to be. :(
- machej on 31/08/2016 - 21:42
  
  +2
  
  OzBargain doesn't endorse the deals posted here. As noted you should check the PDS and do your own research to see if this is the right strategy for you.
samfisher5986 on 31/08/2016 - 19:33

This is a great idea and gives people the opportunity for a higher risk investment.

Unfortunately the profit for this is terrible.

If you are poor, you can't afford to invest although $300 in a year sounds good, if you have a reasonable amount of money then its mostly a waste of time since $300 in a year is useless for the risk.

The only way this would work is if you trusted it not to lose your money and you invested at 5 years just like you would a term deposit, but that would be careless.
- machej on 31/08/2016 - 19:35
  
  You can put such a product in your SMSF. IMO lower risk than equities but higher reward than cash sitting there. Diversification for any investment is key.
  - railspider on 01/09/2016 - 11:10
    
    If you have a SMSF you're not buying debt through a relatively tiny P2P lending website like this one
    - machej on 01/09/2016 - 11:14
      
      That's a big assumption. According to RateSetter more than 25% of lenders are SMSF, furthermore the average amount SMSF put in seems to be around $57,300.
    - railspider on 01/09/2016 - 11:27
      
      Not sure where you got the 25% figure from, but assuming it's correct: RateSetter has ~3000 lenders so 750 SMSF lenders. ATO says Australia has ~570,000 SMSFs. That's 0.1% of all SMSFs choosing to invest in this P2P debt - not really a number worth boasting about.
      
      I will admit the average of $57,300 is quite high, and the SMSF investors do appear to be targeting the riskier 5 year loan segment. Not the sort of risk/return mix I'd want in my portfolio but to each their own.
  - [Deactivated] on 01/09/2016 - 16:25
    
    "IMO lower risk than equities"
    
    I understand that this is your opinion, but this statement is a little worrying.
    
    You're suggesting that providing unsecured personal loans provided by an entity that may compensate those whose loans have defaulted at its own discretion is less risky than direct share ownership?
    
    Admittedly, the platform ratesetter have established spreads the risk among lenders and thereby lessens the risk somewhat. But so too an index fund can spread the risk among those who invest in the stockmarket.
    
    I actually am an admirer of the ratesetter business - and any disruptive innovation in the finance sector for that matter. But I think people need to do a little more analysis and see it for what it is, a innovative but high risk investment.
    
    The thing about risk is that even if the possibility of default or disaster is low, if it actually does happen then a high risk investment could be wiped out in its entirety. While the provision fund may take currently take care of individual defaulters adequately, has it been stressed tested to see what will happen if economy goes into a medium term decline and unemployment increases?
    
    If defaults dramatically increase then you have done your dough, which is actually fine because you've signed up to this investment with your eyes wide open and know that its a possibility.
    
    I personally have decided not to invest in ratesetter as I would forgo the better returns due to the increased risk. But everyone has a different risk profile, and should do their own research.
    - machej on 01/09/2016 - 17:38
      
      Solely because of my diversification and the provision fund + RateSetter being backed by a large entity I believe these factors make it safer than an ETF. A lot of ETFs (especially ASX ones) are so exposed to certain industries like Property. I don't have more than 5% of my net worth in RateSetter that's for sure but I'm happy with the risk/reward.
      
      Back in 2009-10 you'd see me buying blue chip equities, not so much today. I feel yield stocks are awfully bubbled. Of course it's all my opinion but I'm happy with my risk analysis and so far it has worked out well for me.
    - [Deactivated] on 02/09/2016 - 03:06
      
      @machej:
      
      As you've allocated only a relatively small % of your net worth into ratesetter it would seem you've wisely mitigated your overall risk.Wise move. And for 5% of your networth, why not have some speculative fun for a higher return.
      
      However, your own risk management of this investment class is still quite a different proposition to the notion that ratesetter is less risky than equities.
      
      Equities are high risk, for sure. And all equities are not created equal. But you are typically buying shares in a business, that generates profits, that either distributes them to you in dividends or reinvests them. The value of a broad based ETF will never go down to zero, unless the earth becomes a barren wasteland devoid of life.
      
      In comparison, unsecured lending is providing money to strangers on a contractual promise that they will pay it back. It's just possible, although hopefully not likely, that individual borrowers may default - and the conditions that cause them to default tend to make many of them do so at the same time, taking your shirt with them.
      
      Unless your mistaking risk for volatility. ETFs are pretty volatile, but diversification across a broad base of shares significantly mitigates any risk of failure.
      
      Or unless your confirmation bias is causing you not to see the risk for what it is?
      
      Either way, good luck with your investment (sincerely)!
- greatlamp on 31/08/2016 - 21:22
  
  +1
  
  High risk, mediocre returns.
  There are corporate bonds which have similar returns, and are nowhere near as risky.
  
  Not a deal
  - makeyouryear on 01/09/2016 - 13:31
    
    What is a corporate bond you would recommend?
lonix on 31/08/2016 - 19:45

-1

I'd rather keep the money in my redraw.
- Shwayne on 01/09/2016 - 01:05
  
  +1
  
  I believe you are what they call a borrower.
  - lonix on 01/09/2016 - 18:46
    
    yes, that is correct, unless you were born into riches, you won the lotto, or you somehow became the chief executive of a large corporation, then you have to borrow money to buy a house.
    
    lonix on 01/09/2016 - 18:46 (Collapsed - Offtopic. Show)
    - Shwayne on 02/09/2016 - 00:38
      
      I'm saying there's not much point in mentioning that you have a mortgage when this offer is about lending money, clearly you're not in a position to lend money to others unless you wanted to take on risk for fun.
    - lonix on 02/09/2016 - 10:15
      
      @Sturmeh:
      Yes, and my point is I am better off keeping my money.
    - Shwayne on 03/09/2016 - 17:28
      
      @lonix: Obviously, but you don't need to say it, because it means nothing.
    - lonix on 03/09/2016 - 20:45
      
      @Sturmeh: obviously, yes, but there is also no need for you to reply to my comment.
      
      unless you want to continue this conversation indefinitely.
    - Shwayne on 03/09/2016 - 23:42
      
      @lonix: Yeah but I might as well, because I can right? Seems like a reasonable thing to do, people need to know I can reply to this comment.
    - lonix on 04/09/2016 - 10:59
      
      @Sturmeh:
      Yes, you can, and I can also reply to your reply.
    - Shwayne on 04/09/2016 - 20:00
      
      @lonix: Too meta
    - lonix on 05/09/2016 - 18:00
      
      @Sturmeh:
      You need to be the bigger man and stop replying, because I'm as petty as they come.
    - Shwayne on 05/09/2016 - 21:41
      
      @lonix: I'm not sure I can do that. :(
    - lonix on 06/09/2016 - 17:48
      
      @Sturmeh:
      Try harder.
    - Shwayne on 07/09/2016 - 11:26
      
      @lonix: Never!
    - lonix on 07/09/2016 - 19:06
      
      @Sturmeh:
      Please?
    - Shwayne on 08/09/2016 - 10:54
      
      @lonix: Not happening!
    - lonix on 09/09/2016 - 10:11
      
      @Sturmeh:
      True to the ozbargain spirit!
    - Shwayne on 10/09/2016 - 15:27
      
      @lonix: Not this time!
    - lonix on 11/09/2016 - 10:45
      
      @Sturmeh:
      Next time?
    - Shwayne on 11/09/2016 - 23:15
      
      @lonix: Maybe.
    - lonix on 13/09/2016 - 05:36
      
      @Sturmeh:
      :(
    - Shwayne on 13/09/2016 - 10:56
      
      @lonix: Noo not the sadface. :(
    - lonix on 13/09/2016 - 18:29
      
      @Sturmeh:
      
      =\
    - Shwayne on 14/09/2016 - 11:11
      
      @lonix: you win
chumlee on 31/08/2016 - 20:01

+3

Having a look at their loan book they have too much exposure to tenants borrowing to consolidate debt or pay off loans.

When can I short this company??
- machej on 31/08/2016 - 20:05
  
  Not that many when you filter out "repaid" and "homeowners". You can short LendingClub on the NYSE which is another P2P company. (Albeit much riskier than Ratesetter due to their lack of transparency.)
  - chumlee on 31/08/2016 - 20:33
    
    +1
    
    lending club has been in difficult times for a while now. Shorters are all over it
- TimCinel on 01/09/2016 - 02:29
  
  When can I short this company??
  
  CarSales owns a chunk of RateSetter, so I guess you could short them.
  
  Be careful shorting, though. The losses are potentially unlimited.
  - machej on 01/09/2016 - 13:37
    
    +1
    
    CarSales has a $3 billion marketcap with many other assets such as a stake in Stratton Finance and many subsidiaries. If RateSetter were to fail I doubt it would hit CarSales at this point in time considering it's a separate entity.
    - TimCinel on 01/09/2016 - 21:24
      
      True, it would barely move the needle.
    - Shwayne on 03/09/2016 - 17:29
      
      @TimCinel: Ohai Tim. :P
    - TimCinel on 11/09/2016 - 08:08
      
      Ohai. You were right, I do like this site =)
outlander on 31/08/2016 - 20:37

+1

I'm guessing with all these people signing up, the 1yr lend rate is going to take a hit, even though its clear they are trying to push people towards the 3yr option
- stickyfingers on 01/09/2016 - 22:17
  
  I'm pretty sure that's why they actually offered the referral bonus.
  The rates have been getting higher and higher, which is probably making their borrowing market less appealing.
rockman117 on 31/08/2016 - 20:40

http://www.productreview.com.au/p/ratesetter.html 4.9/5 stars from 254 votes. I think I might give it a go
- Hansi on 31/08/2016 - 21:46
  
  +7
  
  Careful, if you look at the reviews, I assume most of them are fake.
  
  Most of the reviewers have only left 1 review in total and have some HD generic animal / car etc picture…..bad fake reviews….
  - rockman117 on 31/08/2016 - 22:01
    
    yeah excellent point. i noticed so many people had profile pictures. who goes through so much effort for randoms on a forum?
    - machej on 31/08/2016 - 22:11
      
      It is possible RateSetter tells borrowers to rate them but it does look a bit suss. There are some with multiple reviews.
  - Associatedmilsomb @ Plenti (Previously RateSetter) on 31/08/2016 - 22:17
    
    +8
    
    Hi Hansi,
    
    I'm Ben Milsom, Head of Marketing here at RateSetter.
    
    All of the reviews on ProductReview.com.au are genuine reviews, provided by actual customers. We do ask customers to leave a review if they would like, but we don't offer any incentives or reward, and we don't cherry pick or selectively request reviews. All borrowers are invited to review our services.
    
    Our customer service and credit teams work to make sure that all our borrowers and lenders have an amazing experience, so it's frustrating when people are so cynical as to think that we make these up.
    
    As for the profile pictures, these are provided by ProductReview.com.au for those customers who don't want to provide their own. Its for this reason that some of them are duplicated or appear similar.
    
    If you'd like to know more about our reviews, I'd be happy to provide further information.
    
    Ben
WaywardOne on 31/08/2016 - 20:46

+5

That's the problem with referrals — deals with referrals get a huge amount of upvotes because referees want exposure.

Is this a good deal? Or do people just want a commission?
- Mr BoMBAStiG on 31/08/2016 - 21:03
  
  +2
  
  That's the only reason I upvoted it.
CheapskateQueen on 31/08/2016 - 20:51

+2

In other news I'll pay 3.5% pa to someone who gives me their money to sit in my offset account #NotKidding lol
- maxwellian on 31/08/2016 - 21:16
  
  If you pay for the contracts I'm almost keen haha
  - CheapskateQueen on 01/09/2016 - 09:45
    
    I'm a lawyer, I'll write them. Haha
    
    Get your own separate offset account with a key card. Pay your interest monthly. Boom. Done. We both win ;)
- Slippery Otter on 01/09/2016 - 08:23
  
  +2
  
  That's what I do with my sister, actually I gotta inform her of the interest for last month ;) and I'm a little cheaper at 3.47%. Does require ALOT of work since I have deposits and withdrawals coming from and to offset several times a day… Arghh the joys of managing two business finances and bills…
  - CheapskateQueen on 01/09/2016 - 09:49
    
    Thats awesome but crazy re the constant deposits and withdrawals! That'd drive me mad.
    
    It's funny more ppl don't think too do it but i guess money and family/friends can get messy.
    
    I was going to get a friend to do it with me but then she realised how clever an idea it was and did it with her brother instead! Can't blame her.
    
    I assume you have an excel spreadsheet that works it out the interest?
    - Slippery Otter on 01/09/2016 - 10:21
      
      I posted this template for whirlpool
      https://docs.google.com/spreadsheets/d/1pMbXhuf0oQGZEJwaz4_x…
cocomelon on 31/08/2016 - 20:53

+1

I love the idea of this company, but too risky.
Bunnyburger on 31/08/2016 - 20:59

+2

Look at Lending Club's share price and think about whether you want to do this.
- machej on 31/08/2016 - 21:46
  
  Lending Club's CEO left and there were major failures on transparency. Bear in mind RateSetter is probably losing money like most startups until their 10% interest covers their operations. LendingClub has the same issues with competition.
altomic on 31/08/2016 - 21:00

um, this reads really well, as in a way to make easy money ,i.e. rates of return. just like Pyramid Building Society.

but someone is at the top earning a lot of money from it. and then the people who work there are making money. then all the lenders are making money, and the office at Martinplace sydney is costing big bickies - just the borrowers are "paying" for all of this.

this has hints of a Ponzi scheme.

"there is no guarantee nor warranty as to any protection"

It's worth doing some research on the risk

worth your investment

I just see it going really wrong.

and the dude running it walking away saying "well, I tried, but <insert meaningless marketing jargon>" (actually, he would be driving away to his harbour view house in his porsche - which were "bonuses" whilst he "managed" this "venture".
- VBO on 31/08/2016 - 21:34
  
  whoever goes in last loses all, and no one thinks they would be the last…
- machej on 31/08/2016 - 21:48
  
  +1
  
  On that logic a bank is a ponzi scheme too because they take your capital and lend it out. The real definition of a Ponzi is something that offers returns that are illogical and funds have to come exclusively from the capital they are sitting on. (ie. there is no real business plan that generates cashflow)
  - gadget on 31/08/2016 - 22:09
    
    Technically Ponzi payments come from a continuing inflow of cash from new 'investors', without which the scheme collapses.
    
    Oh and the banking system here enjoys the lender of last resort facility provided by the feds.
    - machej on 31/08/2016 - 22:12
      
      Correct, but wouldn't you agree RateSetter would make more money by ensuring that risk is minimised and remaining solvent? They get 10% of gross interest.
    - altomic on 31/08/2016 - 22:25
      
      @machej: according to their own data they are currently getting returns of ~7.5% on loans. somehow they are going to return rates of 10% over a 5 year period? it's not going to happen.
    - machej on 31/08/2016 - 22:30
      
      @altomic: You're interpreting the data incorrectly. There are different markets and different points in time. The rate that currently exists is subject to change and it's what you'd receive if you invest today. When I signed up a year ago the rates were much better, now as more people are dumping capital in it pushes the live market rates down because they only approve so many borrowers per day and there is a surplus of deposits.
      
      TL;DR it's akin to an unsecured term deposit and the rate you lock in for one market (ie. 3 year market) is not the same rate that someone else will get in 2 months time. (It could be higher or lower)
    - altomic on 31/08/2016 - 23:23
      
      @machej: no, i get it.
      
      as more people are dumping capital in it pushes the live market rates down because they only approve so many borrowers per day and there is a surplus of deposits.
      
      wow, too much demand for loans for them to cope with!? I don't know, that sounds weird. they make their money from loaning money. and they have too much money from a surplus of deposits because they can't loan it out fast enough.
      
      I think I'll stick to a safer investment strategy, like tulips.
zacjanes on 31/08/2016 - 21:11

Signed up with Akame referral link. Hope you enjoy your $100 bonus :)
- watwatwat on 31/08/2016 - 21:27
  
  Congrats to him. Make him buy you beer.
spackbace on 31/08/2016 - 21:16

+3

Lol since this post went up, that referral count has gone from 2 to 56!
dtc on 31/08/2016 - 21:22

+6

Guys we get it. It's too much of a risk for you. For those of us that like investing in Australian biotechs, this is like an RBA bond
wizzlesticks on 31/08/2016 - 21:27

+2

This will probably work, for a while, but if it goes pear shaped just pray you don't have any funds invested or you'll end up being an unsecured creditor.
VBO on 31/08/2016 - 21:29

It's really risky and the return makes it not worthy. Won't even put my money into it for 6 months.
watwatwat on 31/08/2016 - 21:38

+6

I've got 30% of my net wealth in RS.

In this life, I will either live a fulfilling life of great compounding interest or I will live as a peasant. Yolo.
robhung on 31/08/2016 - 21:47

How does this compare to the other p2p lender, SocietyOne?
- watwatwat on 31/08/2016 - 21:49
  
  +1
  
  Doesn't. Societyone doesn't allow retail investors.
- machej on 31/08/2016 - 21:50
  
  SocietyOne doesn't have a provision fund although it is funded by Westpac. (Not backed by, I suppose Westpac wouldn't want to foot the bill). SocietyOne was the first P2P for sophisticated investors in Australia, RateSetter was the first P2P for retail investors. Not sure what else they do differently.
  - TimCinel on 01/09/2016 - 02:35
    
    Not sure what else they do differently.
    
    SocietyOne offer secured livestock loans. The performance of these loans are theoretically not correlated with unemployment.
    
    In addition to that, SocietyOne rate the risk of each borrower and suggest charge rates accordingly. Much closer to the LendingClub model.
kheob on 31/08/2016 - 21:47

-1

Nah I'll keep my cash in the safest place I know - under my mattress.
giventofly on 31/08/2016 - 22:06

-1

Why don't we start putting pay-day loan deals on here? Gees. A deal would be to loan $2000 and only pay back $1800.
[Deactivated] on 31/08/2016 - 22:10

+1

A fool and his money are soon parted. Not a bargain, also very risky.
[Deactivated] on 31/08/2016 - 22:24

-2

Smells of Ponzi scheme. Remember on average unsecured creditors recover 2-3% of debt in cases of default.
From: https://www.ratesetter.com.au/peer-to-peer-lending/risks
No Provision Fund protection

We may make a claim to the Provision Fund to compensate you in the event of a borrower late payment or default. However, the Provision Fund is not an insurance product and we cannot guarantee nor warrant that you will be compensated in the event of a financial loss.

If you are not compensated by the Provision Fund, you may benefit from a number of debt collection or recovery processes that RateSetter may undertake. If a loan is secured, these processes may include the relevant security interest being exercised and the secured asset being repossessed or sold.
Flurogreen on 31/08/2016 - 22:39

Shouldn't be on OzBargain. Asking someone to risk cash for an average return isn't a bargain.
- watwatwat on 31/08/2016 - 22:42
  
  10% is average return? What is higher?
  - TimCinel on 01/09/2016 - 02:37
    
    -1
    
    Property mate.
    
    5x leverage, doubles every 7 years. That's 50% return on equity! Better yet, the capital gains aren't taxed until sale, at which point they're taxed at a 50% discount!
    
    Also there's no risk with property.
    - Soluble on 01/09/2016 - 08:13
      
      +4
      
      No risk with property?
    - Cluster on 01/09/2016 - 11:07
      
      +1
      
      TimCinel was obviously being sarcastic.
    - machej on 01/09/2016 - 11:10
      
      +1
      
      @Cluster: Personally I found his comment hilarious. Australians are way too exposed to property through investments in the bank, construction industry and the family home.
boonce on 31/08/2016 - 22:39

+4

1YR: $100 + 5.5% p.a. on $2000 = $2210 : 10.50% ROI
3YR: $100 + 8.5% p.a. on $2000 = $2610 : 10.17% ROI

(Using simple interest calculations, not sure exactly how it is calculated or paid out.)

Just pointing out the bigger interest rates may seem better but don't compare with the value in the "free" $100. Also ties your capital up for longer and may have added risk if the company fails in 2-3 year horizon.
Tasmaniac on 31/08/2016 - 22:41

So what's the default rate on the liquefied capital ? Will I need an audit to determine debit credits ?
- machej on 31/08/2016 - 22:44
  
  Currently stated to be "<3.1%" which is always subject to change but that means $1,345,512 of bad debts and their provision fund is $2.4 million so there is a decent buffer. They'd have problems if the default rate doubled to 6% but bear in mind they vet their borrowers carefully.

This was posted 8 years 2 months 22 days ago, and might be an out-dated deal.