RATESETTER has announced that it is simplifying the way investors can access their money, with one single “transfer fee” when selling loans on the secondary market.
Lenders are currently charged two fees when selling out existing RateSetter loans, but from 2 November this is being streamlined into a single charge. The fee will be a percentage of the capital being withdrawn, and will be fixed for each market.
RateSetter has published the example table below, arguing that under the new system the transfer fee charged will be lower than the current average fees incurred when selling out an existing loan.
Earlier this month, another P2P platform LandlordInvest opted to reduce the fees on its secondary market, after trialling removing them entirely.
Alongside the introduction of the single transfer fee, RateSetter is adjusting some of the terminology used on its site. The word deposit will be replaced with ‘money in’, withdraw will be replaced with ‘money out’ and sell out will be replaced with ‘release your investment’.
Furthermore, the firm is removing the ‘drawdown’ function – which moves a specified amount of money back into the holding account as loan repayments are received, with the remainder reinvested. RateSetter said that currently less than two per cent of investors make use of the facility.
However, it will retain the ‘auto money out’ function, which transfers funds from an investor’s holding account to their bank account on a regular basis.
According to RateSetter, around £240m has been accessed by investors via the secondary market to date, which it claimed demonstrates that its markets have “consistently been deep and liquid”. Nonetheless, it pledged to “be clear that early access to invested funds is subject to other funds being available to take their place on contracts”.