Zopa. Neither a borrower nor a lender be!

meanmachine_2 · 1 April 2006 at 3:30PM

I don't get it.

Big banks borrow from other markets, say Japan at 0.5%, then lend in their own markets at 5.1%. Lovely jubbly. That's why there has been so much cheap money around lately.

Zopa *appears* to give lenders and borrowers much the same rate. Erm... Sorry, but if I'm risking my money like this, to be honest, I'd expect a rate well north of 10%, probably closer to 15% - a sub prime rate.

seriously.

And I don't believe any other potential lender would think differently.

newmoneyuser · 3 April 2006 at 8:34PM

Zopa's own forums have a very long thread on this subject here

http://zopa.spreebb.com/index.php?showtopic=38

If you have the time to read it, you will seem that Zopa seem to have made a complete mess of introducing this new fee structure and one or 2 people are less than happy.

meanmachine_2 · 3 April 2006 at 9:50PM

Yeah, I've read some of the posts.

The model Zopa uses just doesn't work for me. It offers about the same rate as an ISA, but also lumbers me with a bad debt risk and NOW a fee on top of that.

Er, thanks but no thanks.

Ted_Bloke · 5 April 2006 at 10:39PM

newmoneyuser wrote:

Zopa's own forums have a very long thread on this subject here

http://zopa.spreebb.com/index.php?showtopic=38

If you have the time to read it, you will seem that Zopa seem to have made a complete mess of introducing this new fee structure and one or 2 people are less than happy.

What you see there is ppl contributing to MSE are in financial understanding Alan Greenspans compare to the Zopa contributors, so what worries me is that I have invested in Zopa so if it looks like Zopa investors are idiots..._pale_

Ted_Bloke · 5 April 2006 at 10:52PM

Ted_Bloke wrote:

...
I keep wondering and asking, see prev. posts.

wharrabout the lenders? I keep on asking.
Where does the subsidy come from?...
PS
Now even yet my wonder grows as Zopa announces that they extend their subsidy offer to the 'B market'... Offer again valid for one month only, who knows for how long?...
As for lenders, I don't think I got an answer but ah well, silly me, I'd said I'd watch not just what Martin said but how he said it, that includes what he doesn't say.

Watch this space for what it doesn't say.

I made the above post in early March. Concerning the question in BOLD, sure enough, now in early April on the Zopa site it now says "The 2% bonus is available until the end of April."
I keep making posts on this thread hoping someone will take up my questions in previous posts, how does it work, how can they keep their promises?
Somewhere on the Zopa site if you can find it, apparently the 2% subsidy - I guess that is now in practice 1.5%? - is like the offers credit cards make you for taking out a new card, in order to get known, build up reputation and clientele, drum up business. However the cc's already have a big business that they seek to expand, it's more worrying for a startup like Zopa. Still the credit card example and the fact that Zopa directors come from the cc business is some comfort, as a lender I hope they know all the cc dirty tricks!:D

Paul_Herring · 6 April 2006 at 9:49AM

Ted_Bloke wrote:

I made the above post in early March. Concerning the question in BOLD, sure enough, now in early April on the Zopa site it now says "The 2% bonus is available until the end of April."
I keep making posts on this thread hoping someone will take up my questions in previous posts, how does it work, how can they keep their promises?

I beleive it's called a loss leader.

Somewhere on the Zopa site if you can find it, apparently the 2% subsidy - I guess that is now in practice 1.5%?

Only for offers made or amended after April 12th. Money offered before then isn't charged the .5%

- is like the offers credit cards make you for taking out a new card, in order to get known, build up reputation and clientele, drum up business. However the cc's already have a big business that they seek to expand, it's more worrying for a startup like Zopa. Still the credit card example and the fact that Zopa directors come from the cc business is some comfort, as a lender I hope they know all the cc dirty tricks!:D

Personally I don't think they've learnt enough. Consider the vocal minority that have posted on that thread mentioned above. Zopa still aren't replying to some valid concerns.

newmoneyuser · 8 April 2006 at 2:12PM

I guess its time for a new lending grid

newmoneyuser wrote:

From 6/2/06

"A" rated loan at around 20:20 Monday, a blank indicates that the
funds were not available.

............6M...12M...24M...36M..48M...60M

..£1,000 4.7% 4.9% 5.6% 4.2% 6.7% 7.0%
..£2,000 4.8% 5.0% 5.8% 4.4% 6.8% 7.2%
..£4,000 5.0% 5.1% 6.0% 4.6% 7.1% 7.5%
..£6,000 5.2% 5.2% 6.1% 4.7% 7.6%
..£8,000 5.4% 5.4% 6.3% 4.8%
£10,000 5.6% 5.5% 6.5% 5.2%
£12,000 . . . . 5.7% . . . . 5.7%
£14,000 . . . . 5.8%
£15,000 . . . . 6.0%

This new grid includes the .5% lending fee that pushes up the short term loans a lot

............6M...12M...24M...36M..48M...60M

..£1,000 6.1% 5.6% 6.1% 4.4% 7.0% 7.2%
..£2,000 6.3% 5.9% 6.2% 4.7% 7.3% 7.5%
..£4,000 6.6% 6.0% 6.5% 4.9% 7.9% 8.3%
..£6,000 6.8% 6.2% 6.8% 5.0%
..£8,000 7.1% 6.4% 7.1% 5.7%
£10,000 7.4% 6.6% 8.2% 6.7%
£12,000 7.9% 6.8%
£14,000 . . . . 7.4%

As you can see the 'market' can no longer service some of the larger or longer term loans, I can see this happening because a number of lenders were less than happy with the changes and so withdrawn their funds, but also people hopefully are placing their cash in to this year's ISAs before looking at putting it into something like Zopa.

I'll try and put together another grid a few weeks after the lenders also incur their .5% fee.

tango · 21 April 2006 at 9:44PM

Hi anyone heard anything on Zopa,the new way of borrowing and lending,have been on their web site,but it looks very different from the 'normal' way of borrowing. thanks tango

savvy · 21 April 2006 at 10:44PM

Hi Tango, I think this is where you need to be

HTH savvy

tango · 22 April 2006 at 10:25AM

Oops didn't see it

Zopa. Neither a borrower nor a lender be!

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