RateSetter Review: How to Make 15% in 12 Months with Peer-to-Peer Lending

RateSetter Review: How to Make 15% in 12 Months with Peer-to-Peer Lending

Feature Image crop 1

Today I will be discussing and reviewing the Peer-to-Peer lending service RateSetter. How I am using it to generate a 15% return in 12 months on a £1000 investment, and how you can do it too.

Just quickly for anyone not fully conversant with Peer-to-Peer lending (P2P), the concept is quite manageable.

An individual or company wants to borrow some money (borrowers), they use a service (RateSetter), to find other individuals that will lend them the money for an agreed interest rate (lenders, us).


By avoiding the big banks, P2P lending allows both borrowers and lenders (investors) to receive more attractive rates. Additionally, those rates come at a much lower risk than stocks/shares and other traditional forms of investing.

For this reason, I have 13% of my net worth in P2P investments, which I consider to be a large slice of the pie.

Crowdfunding case study: MVMT Watches: A Shopify Story (Case Study to Success)

The name peer-to-peer suggests how money flows from average joe to average joe, which is a framework that I can get behind. There are hands-on and hands-off type platforms out there, RateSetter falls more on the hands-off side in my opinion. It’s very simple in design and feels like a savings account, only you get better interest rates.

A bit about RateSetter

The piece de resistance to this platform is the guarantee provided by their ‘Provision Fund’.

RateSetter has a Provision fund of over £35 million to provide a buffer for poorly performing loans. It has a 100% track record in doing so too, which you can’t argue with. Their website states:

‘All investors have received the return they expected and no individual lender has lost a penny since our launch in 2010. While this is a track record we want to maintain, please note that past performance does not provide a guarantee for the future.’

With the Provision Fund securing all three investment options, you can choose to put your capital into the instant rolling market, 1-year or 5-year markets. Their respective interest rates for the agreed term fluctuate continually, or you can elect your own interest rate (hence the name, RateSetter…).


You don’t select or know the person/s that you are lending too, the platform does the matchmaking for us. RateSetter lowers our risk further by lending our capital to multiple parties automatically – win.

So, everyone has been paid out and the insurance fund is looking pretty, but don’t assume that this comes risk free. All investments are subject to some risk, if the platform were to experience big enough defaults technically money could be lost. Furthermore, the Provision Fund is offered at the Directors’ discretion, allowing a very small chance that you could come unstuck.

That being said, I consider the risk undeniably small making the this an ideal opportunity for those with a lower risk appetite (me).

How to make a 15% return in 12 months

Head over to RateSetter’s website and make an account, it’s refreshingly painless.

During registration you can elect to use their normal Everyday Account or use both a new ISA Account and Everyday Account. I decided to open a new ISA with them and use both accounts. You can transfer from an existing ISA too if you wish.

Once your account is up and running, select ‘Invest’ on the left-hand side of your account dashboard.


From here you can select your timeframe and amount to invest, I went for the 1-year option and £1000.

Now you have the choice of using the advertised market rate, the big number. Or you can select whatever rate you want (up to 10%). However, be mindful that your money will sit in your account until a borrower accepts your rate. A more realistic rate in the 4-7% region will get accepted more quickly. I went for a conservative 5% (when the advertised rate was about 4.4%). This was snapped up in about 10 hours and my money was on loan earning interest at 5%.

That’s the standard 5% sorted, now to get that extra sneaky 10%. I signed up using a referral link and would like to offer you the opportunity to do the same.

If you are interested and would like to use my referral link here, we’ll both get a bonus (and I can keep the site going).

That’s it! Upon completion of your 1-year term (or greater if you wish), you’ll receive £100 into your chosen RateSetter account on top of the £50 interest, that’s equivalent to 15% if you invested £1000 like me. Easy £150 – thats the phone bill sorted for 6 months.

Parting thoughts

Some main takeaways to wrap up this RateSetter review:

  • Ideal for beginners with easy to use interface automatic loan matching.
  • You can choose your own interest rate.
  • Hands-off style, no need to maintain or do anything routinely on your account.
  • Their Provision Fund provides great loan security with a 100% track record.
  • Not the highest interest rates available in the P2P arena however, well placed for low level of risk and loan default insurance.
  • Investments are spread across multiple borrowers including individuals, businesses and property.
  • Potentially less susceptible to Brexit fall out with the majority of loans going to individuals and property.
  • Authorised and regulated by the Financial Conduct Authority.
  • Investment capital can be released prematurely for free from the rolling market, or at 0.3% and 1.5% penalty from the 1-year and 5-year terms respectively.
  • Moneyfacts have voted RateSetter the Peer-to-Peer Provider of the Year for the last three years.
  • Don’t forget as with any P2P investment or otherwise, your capital is at risk and you can lose some or all of your money.

I hope you have found this useful and informative, there are few easier ways to make a 15% return at such a low risk profile. If you have any questions or comments please do write to me below, I would love to be of help.

Take care,

Dom Sign off

Leave a Reply

Your email address will not be published. Required fields are marked *

Share via
Copy link
Powered by Social Snap