Frequently Asked Questions
Loans can be used for any personal purpose including: consolidation of debt, weddings, home improvement, motor vehicles etc.
Loans may be between $5,000 and $50,000 plus the establishment fee. Our average loan size is currently around $18,000.
Our loan terms are 2, 3 and 5 years.
Borrowers are creditworthy individuals that meet SocietyOne's stringent credit criteria. They must have a good credit record, be over 21 and satisfy a number of other behavioural and loan servicing criteria.
SocietyOne's credit team and loan origination system assesses borrowers' creditworthiness using best practice credit assessment techniques. Only borrowers who meet SocietyOne's stringent requirements are listed on the platform and made available to investors.
Currently less than 15% of loan applications are listed for funding by investors.
Borrowers are assigned a credit grade (AA, A, B, C or D) based on a number of credit criteria, including their credit score. The credit grade determines the minimum and maximum interest rate range within which investors can bid. Interest rates change depending on market conditions. Find more info on investing in personal loans.
As an investor, you choose the credit grade and term of loans in which you want to invest and the maximum amount you wish to invest in any one loan when completing the Investment Agreement. SocietyOne takes care of the rest. Our allocation engine bids for loans on your behalf in accordance with your choices.
Currently you can only choose the grades of loans in which you invest, but not individual loans. Our allocation engine is calibrated to bid on loans with diverse characteristics, e.g. terms, interest rates, geographies, professions, etc within your selected credit grades. The objective is that the loans in which you invest are broadly representative of all loans available in that credit grade.
Investors currently receive between 6.10% and 23.84% as a gross return on each loan (after deduction of SocietyOne's Service Fee and depending on the borrower's credit grade). The weighted average gross return to investors across all credit grades is currently around 10.5% before defaults and impairments (8%-10% p.a. on average after defaults and impairments). Find more info on investing in personal loans.
The interest rate is fixed for the life of the loan.
Personal loans repayments include both interest and capital. Repayments are made fortnightly or monthly. Borrowers can repay capital early without penalty.
Currently the distribution of loans amongst credit bands is as follows:
Fortnightly or monthly depending on the borrowers loan contract.
Repayments are made by direct debit. Once funds are cleared, which may take up to 5 business days, investors may withdraw up to the amount of their cash interests at call. Investors can also setup monthly automated withdrawals.
You may elect to leave your funds in cash, reinvest both capital and interest in further loans or reinvest the principal component only.
SocietyOne receives the RBA Overnight Cash Rate less 0.50% from Macquarie Bank on the pooled trust account. The full amount is paid to investors.
Borrowers pay an establishment fee of 3% to 5% (depending on their credit grade) if the loan application is successful and fully funded. This fee is capitalised onto the loan and funded by investors.
SocietyOne charges investors a Service Fee of up to 1.65% of the amount of the loan for originating and managing the loan through to repayment. The Service Fee is deducted from borrowers' repayments by the trustee and paid to SocietyOne before returns are paid to investors.
The loans are not a liquid investment as there is currently no secondary market to sell loans. Loan investments are held for the term of the loan unless the borrower repays early (which they may do without penalty). However, loans pay a regular fortnightly or monthly income stream, which provides a steady cash flow.
The investor information memorandum outlines the full risks associated with personal loans. The marketplace model SocietyOne uses spreads risks across many borrowers by enabling investors to take fractional parts of loans. Investors do take on the credit risk associated with each loan and any loan default may result in a partial or full loss of the investors capital investment in that loan.
SocietyOne adheres to strict credit control protocols and passes loans to a collection agency when a borrower is in default. If a borrower does not repay the loan, investors will lose their investment in that loan.
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