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.

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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.

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

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 investments

  • 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 invest?

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

How do I get started?

  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 for investors

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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