Types of investment
By Michael Trudeau
Article 2 of 5
If you're thinking about saving or borrowing through a peer-to-peer lending website, read our in-depth RateSetter review.
RateSetter, like its main competitor Zopa, aims to make peer-to-peer investing as simple as possible.The site automatically allocates your money to borrowers and aims to cover any late repayments automatically and seamlessly. The rates on offer aren't as high as a site such as Funding Circle where you take a more active role in choosing how to lend your money. But if you're looking for an experience that is almost as simple as putting money in a savings account, offering better returns for a little more risk, RateSetter could be for you.
1st out of 3 peer-to-peer lending websites
|Ratesetter peer-to-peer lending satisfaction|
|Explanation of the risks|
|Variety of products available|
|Ease of use of the website|
|Clarity of information on the website|
- Star ratings out of five show levels of satisfaction for each category.
RateSetter peer-to-peer lender details
- Minimum lend: £10
- Lending term: One month, one year, three years or five years
- Can I withdraw funds early? Yes, but your rate will be reduced to the nearest lending term - eg, funds in a one-year bond taken out after six months would revert to monthly instant access rates
- Rates of return on offer for lenders: From 2.9% on monthly instant access account to 6.6% on a five-year bond (after fees, but before tax. Rates checked 18 February 2016)
- Minimum amount you can borrow: £1,000
- Maximum amount you can borrow: £25,000, depending on personal circumstances
- Borrowing term: Six months to five years, depending on personal circumstances
- Can loans be paid off early? Yes, and without any penalty fees
What do RateSetter's customers say about them?
We surveyed 5,000 Which? members in May 2015. These were some of the comments from those who'd invested in RateSetter:
'I'm getting good returns on my investments and am able to control the level of return.'
'Good rates, a clear and easy-to-use site, low default rates and a provision fund.'
'Simple to invest. Good returns so far.'
Alternatives to peer-to-peer websites
If you're looking for a loan, it's worth checking out Which? Best Rate personal loans, too.
In almost all cases you'll want to build up cash savings (in Isas or savings accounts) before considering putting your money into a more risky investment such as peer-to-peer lending.
If you're looking for higher returns you might want to consider other investments.
- Last updated: June 2016
- Updated by: Michael Trudeau