Borrowers warned about new peer-to-peer lenders

COBA chief executive Mark Degotardi said customer-owned banks, building societies and credit unions remain the tried-and-tested model for matching consumers who want to borrow and lend.

“New kids on the block in the P2P lending market like Society One and RateSetter bring the promise of competition and choice for consumers, and that is always welcome,” he said.

“Consumers should always shop around, and if they have a good look at the personal loans market, they will see that the best value for borrowers comes from customer-owned banking institutions.”

According to Canstar’s annual review of personal loans, six out of the six five-star ratings for the secured personal loans category were awarded to customer-owned institutions.

Furthermore, eight out of the nine five-star ratings for the unsecured loans category were awarded to customer-owned institutions.

“What sets us apart from listed banks and other shareholder-owned businesses, such as these new P2P players, is that we’re owned by our customers, and that makes all the difference,” Mr Degotardi said.

The warning comes after Mortgage Business reported that a new peer-to-peer lending platform, ThinCats, has seen 134 lenders and finance brokers register since its launch in December last year.