I’ve had a number of people contact me about this first time mistake, so I wanted to write a specific post to let you know the ‘trick’ before you make your first investment. With a few more clicks you can get a rate of return 0.1%-0.4% higher than the ‘Lend it now’ rate.

When you first join RateSetter and log into your account, you are given a list of the market rates:

The 5.7% on the 5 year market is the lowest rate that anyone is offering. If you chose this your money will probably be lent within a few minutes. Click ‘Lend now’ to see the next screen:

The mistake that most new investors make is just to put their investment in the ‘Amount’ box and click next. But by doing a couple of extra steps they can get a higher rate of return. In the top right hand corner of the screenshot above, click ‘Set your own rate here’:

You will now see this screen:

Click on ‘View Full Market’, as in the bottom left of the screenshot above and this will pop up:

Looking at my highlighted red box, you can see just 4 people are waiting to lend at 5.7%, with a combined total of around £6,300. According to their published statistics, in 2016 RateSetter lent out on average £1.8million per day, so six thousand is small change.

Looking at the market above, you can make a judgement as to what rate you are prepared to lend at. In this particular case, I’d consider something between 5.8% and 6.1%. You don’t want to set it too high as it will take longer to lend (and the market could move downwards). You don’t earn interest when your money is waiting to lend.

In most cases just setting the rate 0.1% or 0.2% is an easy way to make a higher return with RateSetter. If you are worried about the market price drifting downwards while you’re waiting, you can view the recent trend here:

Update the date in the box marked ‘1’ to the last few months, then hover your mouse over the chart (‘2’) to see what the market rates were on a particular day as shown in ‘3’.

This tip is most useful for longer loan terms, especially the 5 year product. It’s usually not worth the hassle in the rolling market unless you are investing large amounts of money and have a lot of spare time!