A peer-to-peer lender has launched a new green loan to help broker clients invest in sustainable and low-emissions technologies.
RateSetter’s new green loan lending market allows borrowers to fund the purchase and/or installation of clean energy products, such as solar panels and water heaters, battery storage, energy-saving lighting, as well as low-emissions cars and trucks.
The principal and interest loans are for an indicative term of seven years, though loans may be between three and seven years in term. Currently, there is a 6.2 per cent annualised rate (after fees) on the loan, paid monthly.
The green loan is being made available to brokers (as well as through manufacturers of green products and distributors) to enable borrowers to access funding for sustainable products.
Speaking to The Adviser about the new loan product, chief executive of RateSetter Daniel Foggo said, “It’s definitely the first green loan marketplace of its kind in Australia and really, the origins of it came from the fact that we want to provide a very fulsome offering to brokers in Australia and to both consumers and businesses.
“So, there is now an opportunity for brokers – when they help somebody buy a home – to maintain that relationship with that customer by offering them a green loan. It is another reason for the broker to call the customer and say: 'Here's a product that is really relevant', whether it be for a hybrid car if they want a car loan, or installing solar panels when making renovations.
“It’s about making brokers really think about how to maximise the revenue for each customer and making a green choice at the same time.”
Mr Foggo added: “A lot of the offerings at the moment in the market for funding green energy goods are not really offered by brokers, so this can be a new string to your bow.”
He concluded that as a “pretty solid” proportion of RateSetter’s loan volumes came through brokers, it is expected that the third-party channel would similarly uptake this product too.
To be eligible for the green loan, consumers must be over the age of 21, have a regular income, live in Australia and be and permanent Australian or New Zealand resident or citizen.
However, the loans are also available to businesses and self-employed individuals for small business purposes.
RateSetter said that over the next year, it expects to fund just under $200 million in loans, of which around 20 per cent would be via the green market.
The peer-to-peer lender's green loan lending market has received a $20 million investment for the government’s Clean Energy Finance Corporation (CEFC), marking the first time the Australian government has invested in an Australian peer-to-peer lending platform.