Bonds

[Value Collector]

This site looks very interesting. I've read some of the FAQ's but I was wondering if there was anything that you might have found as a user that perhaps we should know about? In other words, is there anything that you find annoying or anything that you might not be happy with? Thanks.

No nasty surprises (yet), I have been lending on there for about 2 years now. It all works as advertised, I am really happy with it.

It’s pretty straight forward, you transfer money into your holding account ($10 minimum) and then pick your lending market and loan it.

It then gets paid back to your holding account in monthly principle and interest payments, from there you can reinvest in manually, or setup auto reinvestment, or have holding account balance deposited into your bank account weekly.

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Their management seem very switched on, I had a chance to speak with them over drinks at an investor night they invited members along too, they manage the loan portfolio and provision fund very well.

 

[Zaxon]

I've never been a fan of bonds. To begin with, they're not capital secured: the value of your bond fluctuates over time, so it's an at-risk asset. Secondly, you can get equivalent or better interest rates than government bonds in a savings account at your bank a lot of the time. You'd need to go up to corporate bonds to do better.

If you're prepared to risk your capital, then use shares with a much higher upside potential.

 

[Bill M]

Their management seem very switched on, I had a chance to speak with them over drinks at an investor night they invited members along too, they manage the loan portfolio and provision fund very well.

Hi VC, thank you for your reply, it is really helpful and informative. I looked at this a long time ago and did nothing but now with interest rates looking like dropping further this may be the product I am looking for. They sound very efficient too, cheers.

 

[Zaxon]

If you're going into the Peer-to-Peer lending space, there's also Wisr, which is Australian.


RateSetter is British


I haven't used either personally.

 

[Bill M]

This is what the Australian RateSetter site says:
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RateSetter in Australia is an independent company, managed and majority-owned locally, although we benefit from being part of the RateSetter group.

RateSetter was established in Australia in 2012, led by our CEO Daniel Foggo, and officially launched to the public in November 2014. Importantly, RateSetter launched as the first peer-to-peer lender licensed to provide services to all Australians, not just wholesale and sophisticated investors.

https://www.ratesetter.com.au/about-us
---

 

[Zaxon]

RateSetter in Australia is an independent company, managed and majority-owned locally, although we benefit from being part of the RateSetter group.

Sounds like it's a franchize then. Still, I can't buy its shares.

 

[HelloU]

If you're going into the Peer-to-Peer lending space, there's also Wisr, which is Australian.
View attachment 94794

RateSetter is British
View attachment 94795

I haven't used either personally.

OT (plenty of action happening in wzr in the pre this morning)

 

[Zaxon]

plenty of action happening in wzr in the pre this morning

I've chosen it as my pick for the June tipping comp, saw this thread was talking about RateSetter, so I mentioned an Australian equivalent, then decided to buy some....all this morning since 8:21 am.

 

[Value Collector]

If you're going into the Peer-to-Peer lending space, there's also Wisr, which is Australian.
View attachment 94794

RateSetter is British
View attachment 94795

I haven't used either personally.

Rate setter Australia is a separate company from the British version.

Rate setter Britain is a share holder (15%) in rate setter australia, but apart from that they are separate.

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The key advantage rate setter has over other peer to peer lenders is the provision fund.

 

[Bill M]

VC, I opened an account with them and transferred some funds in. I was going to split the loans 50/50
1 month/5 years. The 5 year loan was filled within 2 hours, I got 7.9%.

With the 1 Month one, I put up this AM at market and was not filled. Later I checked and there was lower offers so I went .1% lower than all of them and my order is still not filled. It has dropped from 4.5% to 3.8% in the space of a day.

2 Questions. What is the easiest way to fill a 1 Month order? 2. How does it auto reinvest when the market rates are continuously changing? What interest rate will it offer during auto invest? Especially when say several lenders are rolling over on the same day at the same time?

Thanks for your time.

 

[Bill M]

OK, I managed to fill the 1 Month loan and received a rate of 3.8%. I think it was a lack of borrowers and a combination of people lowering their rates. Later in the evening someone was willing to borrow at 3.8% so I quickly matched them.

I am still not sure how they will deal with auto invest after the month.

One thing very good about the 5 year loan is that they pay you back principle and interest each Month. It is kind of like a 5 year annuity where at the end you would have received all your capital back with interest.

The platform is easy to operate too, thank you for bringing RateSetter to my attention, cheers.

 

[Value Collector]

VC, I opened an account with them and transferred some funds in. I was going to split the loans 50/50
1 month/5 years. The 5 year loan was filled within 2 hours, I got 7.9%.

With the 1 Month one, I put up this AM at market and was not filled. Later I checked and there was lower offers so I went .1% lower than all of them and my order is still not filled. It has dropped from 4.5% to 3.8% in the space of a day.

2 Questions. What is the easiest way to fill a 1 Month order? 2. How does it auto reinvest when the market rates are continuously changing? What interest rate will it offer during auto invest? Especially when say several lenders are rolling over on the same day at the same time?

Thanks for your time.

Hi Bill,
Yeah the interest rate available moves around during the day with supply and demand.

In general I have noticed the are lower in the morning as all the investors but money on the market that they transferred in over night, but usually tick up into the afternoon as borrowers come on and take out loans.

3.8% is pretty high for the 1 month, it’s been around 2.9% most of the time recently.

For reinvestment, I usually set it to market rate that way it’s definitely gets filled, because otherwise it can sit there for to long if the market moves, also they watch the reinvestment options set to market rate, and give them priority.

I have my five year loans set to auto invest the capital, and the interest goes to my holding account and is swept to my bank account every Tuesday.

 

[Value Collector]

OK, I managed to fill the 1 Month loan and received a rate of 3.8%. I think it was a lack of borrowers and a combination of people lowering their rates. Later in the evening someone was willing to borrow at 3.8% so I quickly matched them.

I am still not sure how they will deal with auto invest after the month.

One thing very good about the 5 year loan is that they pay you back principle and interest each Month. It is kind of like a 5 year annuity where at the end you would have received all your capital back with interest.

The platform is easy to operate too, thank you for bringing RateSetter to my attention, cheers.

Yeah, loans depend on having borrowers available, and they come and go throughout the day.

Also, you may notice that borrowers appear on the screen in green normally just below the lowest rate offered by lenders, the loan will sit there for 2 hours waiting to see if any lender is willing to jump the que and take the offer,

But after 2 hours the loan automatically rises up and is filled by those lenders in the que at higher interest rates.

The automatic reinvest just automatically gets put in the que at about where the market is sitting, but it is monitored by staff to make sure it doesn’t sit there to long, so rate will be adjusted to make sure it lends within about 24 hours.

 

[Triathlete]

For Corporate bonds try

www.fiig.com.au