Close behind results from Zopa, RateSetter, another emerging leader in the online peer-to-peer (p2p) market has reported a record month for loans in October.
RateSetter, cleared £3.6m in loans for the month, taking the company past £40m in loans created, of which nearly half are earmarked for car purchases. Speaking to Motor Finance, a spokesperson for the company said "46% of our loans go toward purchasing a car so it’s a considerable chunk."
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The monthly figure is up from £3.25m in September, itself 25% up on August. Across the two months, RateSetter claims to have been responsible for more than 30% of p2p consumer loans.
Such a lending model was recently considered at a Motor Finance panel discussion on the future of car finance provision and has risen to a £350m-plus market this financial year, with borrowers now asking for £1.2m every day, according to RateSetter’s statistics.
Birthday presence
The company also celebrated its second anniversary in October, having passed 150,000 users the month before.
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By GlobalDataRhydian Lewis, co-founder and chief executive of the company, explained "consumers not only understand the advantages of p2p, but that RateSetter offers a simpler and safer model."
That model also includes strict lending criteria – less than 20% of borrowers are approved – and an average loan of £3,972 over 28 months with representative APR between 7 and 10%.
To further protect lenders, RateSetter operates a provision fund of £650,000, covering late or missed payments, which is currently running at 0.3%. The average deposit from peer lenders is currently £11,000, with an interest rate of between 3.2%, for monthly access, and 6.5%, on a five-year bond.
The company is also a founding member of the Peer-to-Peer Finance Association alongside Zopa and Funding Circle.
richard.brown@timetric.com
