RateSetter review: Peer-to-peer lending and borrowing

The peer-to-peer platform RateSetter can offer attractive rates to both borrowers and investors. It's not a bank but a marketplace, where people looking to borrow are matched up with those who want to invest. Find out if RateSetter can provide the right opportunity for you.


Fact checked
RateSetter offers borrowers the opportunity to take out personal loans, often at low rates of interest. It also offers investors the chance to get a return on their money by loaning it out to others. RateSetter acts as an intermediary, matching up all the lovely people who want to lend their money with those who want to borrow it! RateSetter loans are available in amounts up to £35,000 and can be applied for online, with the money reaching you within 24 hours. Read the full review to find out if RateSetter loans are right for you.

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What is RateSetter?

RateSetter is a British peer-to-peer lending company based in London. It is known for introducing the concept of a “Provision Fund” to peer-to-peer lending – an internal fund to protect lenders from borrower default. It was also one of the first peer-to-peer lending companies to permit investment through a Self-Invested Personal Pension (SIPP). Since its inception in 2010, RateSetter has matched more than £2bn in peer-to-peer loans.

What is peer-to-peer lending?

Peer-to-peer lending platforms offer a way for individual consumers to borrow or lend money without involving a bank or building society. The platform acts as an intermediary, matching up investors with people who would like to borrow money. Investors lend money, and then receive part of the interest that borrowers pay on the loan.

As peer-to-peer lenders like RateSetter keep overheads low by operating online, they can often offer attractive rates on loans to borrowers.

Peer-to-peer lending platforms make money by paying slightly less interest to investors than they charge to borrowers. In some cases they also charge borrowers or investors a fee.

Key features of RateSetter loans and investments


  • Loan terms from 1-5 years.
    However you can pay off all or part of your RateSetter loan early at any time.
  • Loan amounts from £500-£35,000.
    The amount you can borrow via RateSetter will depend on your individual circumstances and on your ability to afford the loan.
  • Competitive rates.
    Because RateSetter does not have the overheads associated with a high-street bank, it is often able to offer very competitive rates. The rate you will be offered will depend on your income and credit rating, and may differ from the advertised APR.
  • “Soft” no-obligation quote.
    You can get a quote from RateSetter without affecting your credit rating.
  • Fast application and turnaround.
    If you apply online for a RateSetter personal loan, you will be given a lending decision within one working day. Once you have accepted the loan, the funds will be transferred in to your account on the next working day.
  • Online loan account.
    You can manage your loan through your RateSetter online account.
  • Fees spread over the term of the loan.
    RateSetter charges borrowers an administration fee and a Credit Rate fee. Fees vary depending on the size of your loan, the term and your credit rating. The fees are spread out over the monthly repayments, so there is nothing to pay upfront.
  • No early-repayment fees.
    You can pay off all or part of your loan early at any time and RateSetter does not charge early repayment fees. This can be arranged online.


  • 1-year, 5-year or “Rolling” plans.
    Choose the investment term which best suits your circumstances.
  • No initial or annual fees
    here are no initial investment fees or annual management fees when investing with RateSetter.
  • Diversified portfolio.
    While most loans are issued to private individuals, a significant amount is also issued to businesses, property developers and via third party specialist lenders (e.g. vehicle loans and guarantor loans).
  • Provision fund protection.
    A buffer against poorly performing loans. Find out more about RateSetter’s provision fund
  • Release your investment
    You can access money invested in “Rolling” plans at any time without fees, provided there’s another investor available to take your place. For fixed-term investments, you have the option to transfer your matched loan contracts to an available investor but a transfer fee is payable.
  • Receive interest on your investment
    The rate you receive is a function of supply and demand on the market, and will vary according to when you invest.
  • SIPP.
    Invest with RateSetter as part of your pension portfolio and enjoy tax benefits.
  • All borrowers credit worthy at origination.
    RateSetter says it only lends to borrowers who are creditworthy when the loan is granted, and can demonstrate that they are able to pay back the loan.

What is a provision fund?

Provision funds were introduced to peer-to-peer lending by RateSetter, and are a way of keeping investors’ money safe.

It is essentially a pot of money which works as a buffer against poorly performing loans, so that investors don’t lose out on repayment fees.

Am I eligible to use RateSetter?


  • You are 21 or over
  • You hold a UK bank or building society account
  • You have been a resident for 3 or more years (this does not include the Channel Islands)
  • You have a regular source of income
  • You have a good credit history

Business borrowers will also need to meet the following criteria:

  • Minimum of 3 years trading in the UK with at least 2 years of filed accounts
  • 3 months satisfactory bank statements
  • Satisfactory credit search of the business and its shareholders

Property development loans are deemed more “personal”, and do not have a strict set of criteria to meet. The loan approval is at the discretion of the account managers.


  • You are 18 or over
  • You hold a UK bank or building society account

How do I get started?


  1. Visit the RateSetter website for a no-obligation quote.
    Answer some short questions and RateSetter will tell you how much you can borrow and your likely interest rate.
  2. RateSetter will confirm how much you can borrow.
    This includes a ‘soft search’ of your credit file. It will not affect your credit rating, but will be marked as a quotation. RateSetter will email you in one working day to confirm your eligibility for a loan and how much you can borrow.
  3. RateSetter will match you with a lender.
    You can then accept the best interest rate available.
  4. RateSetter will send you the money.
    Once you have accepted the loan, RateSetter will send you the money the next working day.

For business borrowers

  1. Apply online.
    Fill out some basic information online.
  2. Speak to a relationship manager.
    Speak with a RateSetter relationship manager who will take you through a bespoke proposal
  3. Receive funding.
    After signing your loan agreement your funding will be in your account the next business day

For property development loans

  1. Email RateSetter.
    email one of RateSetter’s account managers, and receive a response within 2 days.
  2. Meet a representative.
    One of the team will come and meet you on site.
  3. Receive your decision.
    You will receive a decision within 5 working days.


  1. Create an account.
    Fill in some basic details to get registered with RateSetter.
  2. RateSetter verification.
    RateSetter will call you to verify some further details.
  3. Choose how you’d like to invest.
    Browse the product page and decide which option is right for you.
  4. Deposit funds.
    At this stage, you can transfer your funds to your RateSetter account.
  5. Confirmation.
    Confirm your investment and start earning.

Frequently asked questions



warning iconWarning: Funds lent through a peer-to-peer website are not covered by the Financial Services Compensation Scheme (FSCS) Please ensure you understand the risks.

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2 Responses

  1. Default Gravatar
    PaulineMarch 11, 2020

    When is interest paid to investors?

    • Avatarfinder Customer Care
      nikkiangcoMarch 12, 2020Staff

      Hi Pauline,

      Thanks for your comment and I hope you are well.

      At RateSetter you earn can interest every month – with returns that are higher than most savings accounts and more stable than stocks and shares.

      Hope this helps and feel free to reach out to us again for further assistance.


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