Explain ratesetter to me please..!

C_Mababejive

Apologies, but i find the ratesetter website a bit confusing.

I have lent money out on zopa and it seems clearer i.e you put money in pot and it gets segmented into lots of smaller loans to spread risk etc.

I am currently interested in the ratesetter monthy product.

I see there is no segmentation setting and so money gets loaned out in bigger chunks but is backed up by their buffer security fund.

So how do i see what prospective borrowers want and for what rate? How is it matched? How do i decide and set my own rates?

Is it possible to borrow chunks of money on the monthly market at cheaper rates and relend it longer term and take the profit?

Keep_pedalling

You can only see what rate is immediately available from borrowers, when their rate is below the lowest rate set by lenders. At this moment you can lend immediately on the monthly market @ 2.4%, but you can set your required interest rate higher than that which will put you in a queue. The higher you set it the longer you will wait for the money to start earning interest.

The market rate does vary, but at the moment I have my monthly money reinvestment rate set at 3% which seems to get matched within 48 hours or less, so that might be a good starting point. I am currently withdrawing all my Zopa cash and moving it to RS as it is easy to get 5%+ in the 3 year market without waiting an age to get your money on the market.

Once you get the hang of it RS is simple to use. You can be total hands off and leave the system to reinvest at the market rate, but to get slightly better rates use a little manual intervention to adjust your rates to natch the spikes that come along when the lenders money starts to get low.

C_Mababejive

For ratesetter lenders,,how much are you comfortable with lending out?

steelbru

Of my total assets ( cash, P2P lending, stocks and shares ) I've got about 4% in ratesetter, and 8% in P2P in total.

guitarman001

I'm putting 2k into FC and Ratesetter and 2.6k into Lending Works.
Rates are good but after 40% tax...................
(How do you get around this other than ISA / put more into pension to bring you out of that bracket)

Broken_Biscuits

C_Mababejive wrote: »

For ratesetter lenders,,how much are you comfortable with lending out?

http://www.p2p-banking.com/countries/uk-transparency-in-credit-management-risk-management-at-ratesetter/

17k average per lender.
or did you mean do you divide up your money into chunks?
if you divide your money but put it in at the same time and same rate then quite often it still gets taken by the same borrower. Not always though. Yesterday i put £400 in at 6.5% and the majority was taken by one borrower and the rest another.

you diversify over time as capital and interest reinvest daily throughout each month, forming new separate loans.

ive had 3 incidents so far where loans were repaid early. Twice it was just a months payment early and then once it was the whole loan. On every occasion i had the money back out in another loan the same day at the same or better rate.

my average rate for all loans are 6.4% currently but am only putting more in when rates spike above that so should see it rise.

guitarman001

Trying to decide on putting more money into FC or join Wellesley. I don't want to help fund anything property related as I want prices to go DOWN but there's a £50 joining bonus which is 2.5% of the £2k amount you need to put in.

Broken_Biscuits

guitarman001 wrote: »

Trying to decide on putting more money into FC or join Wellesley. I don't want to help fund anything property related as I want prices to go DOWN but there's a £50 joining bonus which is 2.5% of the £2k amount you need to put in.

have you seen this site?

http://www.4thway.co.uk/

gives an overview of each lender including their perceived level of risk.

for me personally i wouldn't be happy with increasing projected returns by half a percent or so for a much bigger chance of recording a loss.