Thursday, 23 April 2015

Ratesetter Monthly Lending Rate at an all time high of over 3%

This is a short update with the latest Ratesetter peer to peer lending news. I am shocked and pleased to report that a monthly loan has been matched at 3.1%. Previously the highest rate I seen was 3.0% recently and before that the rate never seemed to get above 2.9%. In fact I say it averaged around 2.7%.

Obviously a rise in interest rates is brilliant for lenders like myself. When I noticed the 3.0% figure yesterday for monthly lending I deposited some cash into my RateSetter account. Unfortunately due to more unexpected expenses this month I only made a small deposit. The money just cleared this morning and I have set my limit at 2.9% so I can get it lent out quickly. Earning 2.9% on my money for a month is better than most 1 year returns available at this moment in time. It equates to 2.32% for a basic rate taxpayer which is a reasonable return for only fixing your money for a month. Of course with this site your capital is at risk so I never invest large amounts monthly, just a little that I will not miss. To be honest the money I invest monthly would pay for one night's cocktails in my favourite bar and since I am pregnant I am saving this money anyhow.

I am guessing the rates are rising as it is approaching near payday and people are short of cash and looking for a little to tide them over until next week. Increased demand combined with decreased supply is every investors dream.

If you want to know more about RateSetter you can check out my review here

3 comments:

  1. Hello there!
    I saw your comment on Huw's blog and thought I'd follow your link - I'll have a good read of your blog over the weekend as you've written some interesting stuff! :-)

    I too am doing some peer to peer lending, and am using Ratesetter, Lending Works and Funding Circle, although slowly, I'm shifting more of my cash into Funding Circle.

    I guess I'm not quite as risk averse as you are, as I took out a 'comfortable' (for me) lump sum out of my cash ISA to try out peer to peer lending and I'm invested over 3-5 years. I too tried a few monthly Ratesetter loans but I just wasn't impressed with the interest rates, although the 3% you got was excellent.

    I'm moving more of my cash towards Funding Circle because of the incredibly high interest rates (up to 11%) available.

    Yes, my cash is at risk as it's not covered under the FSCS and I could lose it all, but I'm comforted by the fact that it's covered under the FCA, so at least it's regulated.

    In time, I may add to the amount that I have out on loan but at the moment, I'm just happy to reinvest the repayments and interest I receive.

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  2. Sorry, not sure what happened there - the comment went into a loop and when I refreshed a few times, the comment was just duplicated!

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