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RateSetter offer secured loans
RateSetter, one of the clear leaders in the peer-to-peer sector, have announced that they will now offer secured loans. RateSetter already offer protection to lenders with their provision fund, and this simply would mean the provision fund would be able to recover funds through those assets.
More interesting is that these loans will be made through "chosen partners" rather than the RateSetter website initially.
Here is the full statement from RateSetter which is listed on their notice board:
On Monday, we are planning to issue RateSetter’s first secured loan. This is not a first in peer-to-peer lending, a number of other platforms already offer secured loans, but we believe it is something that will be valuable for our customers, on both sides, so we have taken the decision to put in place the infrastructure to do so.
From a Borrowers’ perspective, this means that they can borrow larger sums, while from a lender’s perspective, RateSetter’s “USP”, the Provision Fund will to work as normal: all Borrowers, whether secured or unsecured, will continue to pay a Credit Rate, only now the Fund will have the addition of an asset to recover.
We have sought to enter this market place with a clearly defined aim of what we are trying to achieve: to open our market to creditworthy Borrowers who are typical of the RateSetter profile and who want to borrow more money than they could with a conventional unsecured loan. These loans will not initially be available via the website, but through introductions from chosen partners, who have a demonstrable track record of understanding the markets they operate in and the credit within them. We continue to underwrite every application with the same rigour we have applied so far and believe that this new product will allow us to satisfy more potential RateSetter Borrowers.
For our lenders, the implications will be negligible: we have updated the Terms and Conditions to reflect that you are happy to lend via a secured contract as well as our normal unsecured contracts, but, as you would expect, we will administer all aspects of the security for you including holding it on your behalf. We will begin by taking security over property with strict valuation and loan to value criteria.