Securing a loan from a mainstream financial institution can be a grueling and costly affair. Interest rates are often above 10% and approvals are dependent on borrowers’ creditworthiness. RateSetter offers a P2P platform for the UK market which can help borrowers secure loans easily and at much lower interest rates than traditional banks offer. RateSetter is a simple exchange platform where people can lend/borrow money and interact directly with each other. Members decide their own interest rates and no banks are involved in the whole process. Lenders can also benefit from P2P lending as they can invest their money at a much higher interest rate than a traditional savings account or any other investment would offer.
RateSetter uses the latest technology and data to speed-up the process of securing a loan. Paperwork and credit checks are involved but once through, the rest of the process is handled seamlessly by RateSetter for which it charges a small fee from borrowers. The fee is usually around 2% but in certain cases, may depend on the borrower’s credit profile. The fee is the difference between what the borrower pays and the lender earns. Members can borrow money at low interest rates if they have good credit status and lenders can decide whether they want to lend money to risky borrowers at higher interest rates or to worthy borrowers at lower interest rates. This translates to higher savings for the consumers since additional costs involved with banks are eliminated. RateSetter is the first financial loans company to offer monthly and one year investment options. RateSetter has a stringent background check process for a user who wants to become a borrower. According to the company’s website, no investor has lost a penny since its launch in 2010.
RateSetter was founded by Rhydian Lewis and co-founded by Peter Behrens in 2010. RateSetter was one of the “50 Best FinTech Innovators of 2014” and is now the largest P2P lending platform in the UK. The privately owned company is headquartered in London, UK. It has an active base of 24,278 investors and 118,472 borrowers. Major investors include Woodford Investment Management investing £8.2 million and Artemis investing £3.2 million in March 2015. The RateSetter team consists of seven people with vital contributions from 4 non-executive directors.