What is Peer-to-Peer lending?
Peer-to-peer lending is a relatively new market where people can raise money directly from people willing to invest in them. As there are no big bank margins involved, the cost of funds should work out to be far less for borrowers.
What type of loan products are available?
SocietyOne offers fixed rate, unsecured personal loans from 12 to 36 months.
A SocietyOne loan can be used for personal purposes that may include debt consolidation, financing a car purchase, educational costs, life changes such as a wedding, a holiday and many other uses.
How much can I borrow?
You can borrow between $5,000 and $30,000.
What will be the interest rate on my loan?
Your interest rate is set by your peers, the investors in your loan. They make the decision on the rate depending on such aspects about you as your credit experience, your financial position and importantly, the reason why you need the loan. Factored into your loan interest rate is a fee for managing your loan.
Who can apply for a loan from SocietyOne's investors?
SocietyOne is open to all Australian residents and citizens who are:
- 21 years or older
- Have a clean credit history
- Can demonstrate a steady source of income
- Agree to publish your loan listing on our secure platform for our investors to see. Your identity is always kept private.
Our friendly credit team will check the information you provided to ensure you can afford the loan.
What if I have poor credit history?
SocietyOne will not consider applicants who have any history of default or poor payment. SocietyOne has a loan product suitable for people in the high to middle tier credit history. Our friendly Customer Service Team can guide you as to whether an application with us is suitable.
What type of credit check is completed?
SocietyOne uses Veda to provide a consumer credit report and credit score.
What is my SocietyOne score?
Your SocietyOne Score reflects the risk related to your loan and is our formula based on your VedaScore and your financial position.
What are the fees and charges?
You pay a one-off establishment fee dependent upon your credit rating. There are no other charges or fees other than the interest rate you have agreed to pay and charges and fees that may accrue to your account in the event you default on a loan instalment. They are listed in a table in your loan agreement that is emailed to you when the loan is finalised / accepted by you.
Can an investor view my personal information?
Can I repay my loan early? Can I make extra payments?
Yes absolutely, SocietyOne encourages responsible borrowing. You can either pay out your loan early or make lump sum payments during the life of your loan with no extra fees. If you wish to pay off your loan completely then please give is a call so that we can give you an accurate settlement quote and a BPay reference number to use when making the payment.
Can I choose my repayment date?
Yes, you certainly can. When you apply you can nominate a day that suits you best.
For example, when creating your listing, you may choose a repayment frequency (fortnightly or monthly) that corresponds with your usual salary payment and then select the first payment to be deducted from your nominated account when your salary is deposited. If your listing is not complete by the date you have nominated, we will automatically adjust to the next applicable date.
You will then be required to make payments on each payment frequency for the duration of the loan.
Can I change my payment due date?
We can do a change payment plan for you, which will alter the payment due date and thus change the day that your direct debit falls due.
Can I get a personal quote before I apply?
You do not receive a personal quote until you apply for a loan. Only then can we perform our credit assessment and give you a SocietyOne Score which determines which interest rate will apply to you.
How are repayments calculated?
As with all personal loans, the interest you pay is based on the outstanding balance of your loan. It's calculated daily, although you make repayments monthly or fortnightly.
Whilst your repayments remain the same for the life of the loan, you pay less interest and more capital each month.
Can I change the amount I borrow after applying?
You cannot change the loan amount – however you are able to cancel your loan listing application and apply for a new loan listing prior to the first bid being placed.
If your existing application has already been fully bid on by investors, your right to cancel is as per the loan terms and conditions and you should contact us as soon as possible to discuss.
Can I cancel my loan?
Once your loan is active you can cancel it by paying it off and returning the funds and interest you have been lent. Contact us to get a payout figure and BPay reference number to use when you pay off the loan.
Can I change my bank account/direct debit details?
You can change your bank account/ Direct Debit details, by contacting SocietyOne on 1300 144 221. We can update the bank account details in our system for you.
What if I experience difficulty making a repayment?
If you have missed a payment, please contact us immediately to arrange a new payment date. If you are experiencing Hardship and struggling to repay your loan, please call us on 1300 144 221 to discuss. There is a standard dishonour fee for payments that are dishonoured by your bank when we do the direct debit to your account. Check you loan agreement that we emailed you for the table of fees. They include overdue payment fees, and default fees.
What happens after I apply? How long is the process before I get a loan?
Your loan application will be reviewed and assessed by SocietyOne within 7 hours during normal business hours after you have submitted it online. You may be contacted for further information.
SocietyOne will verify if your information is true and correct. If everything checks out OK, you will be issued with a SocietyOne Ranking for investors to refer to when they bid on your loan listing.
Your listing then becomes active on the platform for you to raise your funds.
As soon as you have enough bids to provide you with your funds, your loan listing is finalised and you may draw the funds down in accordance with your Loan Terms and Conditions.
My loan has been funded by the investors, how do I finalise/accept it?
Log into your account and the system should take you directly to the loan that is ready to be finalised / accepted. If it doesn't, then click on the Borrowing top banner menu item, then Manage Listings on the left side menu, then View the loan. There is a button at the very bottom that you need to press in order to turn the funded application into a loan. Proceeds are paid into your nominated bank account within 48 hours.
Have we answered your question?
If any of your questions are still unanswered…….contact us.
I'm interested, how do I become involved?
SocietyOne will allow three types of investors to invest on the platform. These are:
- Sophisticated Investors
- Retail Investors
To ensure the success of SocietyOne's offering and managed delivery, a phased approach has been taken to introducing investors to the business. Until further notice, the investors on the platform are by invite only. There are also specific terms and verification required to become an investor. To read more Click here.
EAR Calculation: what is Effective Annualised Return?
The Effective Annualised Return (EAR) calculation is also known as effective annual interest rate method and is used as a consistent measure of comparing different interest rates. EAR includes the effects of intra-year compounding and is the annualised return on a loan restated from its nominal interest rate. It assumes that principal and interest payments are immediately reinvested and therefore the interest rate is compounded and payable in arrears. This figure is shown on the Investment Summary Page of the members area of our website for all investor accounts.
SocietyOne's EAR calculation reflects only actual cash payments received and does not incorporate future looking projections of performance. As EAR is traditionally used to compare the annual interest rates between investments with different compounding terms during the year, SocietyOne believes it can provide loan investors with a more accurate way of calculating total investment returns as opposed to considering only the stated interest rate on a loan.
How is Effective Annualised Return calculated?
EAR is the output of a formula where the numerator is composed of interest received net of any write-offs. If a loan does not get paid, the interest received for that period will be zero. If a loan is "written-off", the entire principal amount of the loan is subtracted from the numerator. Thus, in the numerator, we accumulate all interest received minus any write-offs for all relevant periods.
Next, we divide this result by the denominator, which is the accumulation of the outstanding principal amount of the loan for all relevant periods. This yields a fraction for the period.
The final step in the calculation involves annualising the result. We take 1 + the dollar-weighted average performance for all periods, raise it to the 12th power to reflect the number of compounding periods for the year, and subtract 1. This result is the Effective Annualised Return, expressed as a percentage. See formula below:
The following are rules and examples when calculating the EAR:
Determining when loans can be included in the formula
To be included in the EAR calculation, a loan must have been issued more than three (3) months prior to the calculation date.
Determining which periods are included in the formula
If it's been more than 3 months since loan purchase, an EAR can be calculated and displayed on an Investor's summary page. After that, the EAR calculation is perpetual (until termination of the loan): meaning, loans don't drop out after 12 months of history. This is why the formula is annualised and results in a fair assessment of determining an investor's loan performance.
Limitations of Effective Annualised Return
EAR is just one method to calculate the return on cash invested in the SocietyOne P2P Lending Trust. We think it is the most useful and accurate way to measure investment performance and compare effective returns because it takes into account actual cash received and write-offs. However, there are other methods for evaluating historical investment returns on fixed-income securities that you could consider.
Have we answered your question?
If any of your questions are still unanswered…….contact us.