P2P Money Blog

RateSetter has added new functionality that allows lenders to cash-in individual or multiple micro-loans early.  Also this month ThinCats introduced a similar feature.  This brings these two P2P companies into line with Zopa, Funding Circle and Encash (YES-secure) who already allow lenders to cash-in early.

RateSetter have taken a slightly different approach by reducing the interest rate to what the lender would have received if they lent on a shorter market.  An example would be if a lender invested their funds over 5 years, but wanted to cash-in after 3 years, their rate would be reduced to what they would have recieved if they had only lent the money for 3 years.  There is also a fixed 0.25% fee, which is the same as ThinCats and Funding Circle, but less than Zopa (1%) and Encash (1%/2%).  As RateSetter use a market based model the sell will be instant, as Zopa, while ThinCats use an auction model, along with Funding Circle and Encash.

This is another positive development in the peer-to-peer arena, and should help encourage new lenders to join.

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