3 questions from our users
HI - I am a new investor to Ratesetter and I have loaned funds in the 5 year income stream. I have also selected to reinvest Capital and Interest repayments back into the 5 year income stream. My question is, am I trapped in an endlessly looping cycle when I reinvest in the same market, as my first monthly repayment will be reinvested into other loans, then the first of those repayments will be also reinvested. It sounds a good strategy for compounding interest, but what is the strategy for getting out of the loop? Is it just a matter of deselecting reinvestment after the 60th repayment, and then waiting another 5 years? I hope this question makes sense! Thanks.
Hi V C,
Each time your funds are reinvested in the market you will be matched with a new borrower forming a new loan contract and loan term.
You could turn your reinvestment settings off and wait for the loan contracts to be repaid, however, we understand that having funds invested for a 5 year term or longer is a big commitment, which is why we introduced the Early Access Transfer feature. Early Access Transfer is a feature on the platform that may allow investors in the 3 year, 5 year, or National Clean Energy markets to liquidate their loan contracts in order to withdraw their funds from the platform prior to the maturity of their loan contract.
When accessing the Early Access Transfer feature, outgoing lenders pay a fixed fee of 1.5% of the amount paid to them by the early access facilitating partner. As the interest rate that applies to an outgoing lenders early access loan may differ to that of a replacement funders facilitating loan, there may be a capital adjustment fee.
You can find some additional information about the Early Access Transfer Feature in our PDS - Refer section 7.12.
Is it possible to split a large investment amount int several smaller loans?
Lenders are unable to choose the number of borrowers to which their funds may be matched. Lenders simply nominate a lending market, an amount, and a rate at which they wish to lend.
Lender orders are typically matched to multiple borrower loans which helps in diversifying the risk of failed borrower payments. The number of borrower loans that your order will be matched to is entirely dependent on the supply and demand of loans in the market at the time that you place your order. Lenders can see an overview of the number of loans their funds have been lent to and the repayment profile for each of these once your funds have been matched to borrower loans.
Importantly, the principal that inspired the RateSetter peer-to-peer lending model is that the risk should be pooled in the Provision fund, rather than requiring lenders to manually split investments across borrowers. Every lender who has invested on RateSetter platform has been paid back all capital and interest on time, which is largely due to Provision fund's ability to compensate lenders for losses immediately provided it is sufficiently funded.
If you have any additional questions, please feel free to contact us at email@example.com
I am inerested in the 3 year income.The monthly repayments are iassume capital repayment &interest. If I elect not to reinvest the capital amount can itremain in my holding a/c until i decide to either withdraw it or reinvest in another loan
You best of contacting rate setter direct to ensure there product is right for your circumstances.
Investors in the 3 year and 5 year markets typically receive monthly repayments of both capital and interest amounts. You can choose to have those funds reinvested back into the market automatically, or moved into your holding account where you can withdraw them or reinvest them at a later date.
If you have any further queries, please do not hesitate to contact us at firstname.lastname@example.org.
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