Zopa interest rate confusion
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Medihv
Posts: 49 Forumite
hello and thank you in advance for any help you are able to give.
Do many of you use Zopa? I am a little confused about the interest rate. When they say your money has been lent at 3% do they mean 3% per year when you lend or is it a well worded ploy and you will get 3% on your investment over the 3 years.
I have put a few thousand on there in Oct 14 and I'm getting confused by the wording. It refers to the interest as X% over the term of the loan.
Any one make sense of Zopas interest rates and what do you think of it?
Do many of you use Zopa? I am a little confused about the interest rate. When they say your money has been lent at 3% do they mean 3% per year when you lend or is it a well worded ploy and you will get 3% on your investment over the 3 years.
I have put a few thousand on there in Oct 14 and I'm getting confused by the wording. It refers to the interest as X% over the term of the loan.
Any one make sense of Zopas interest rates and what do you think of it?
Great things are done by a series of small things brought together.
If you cannot do great things, do small things in a great way.
The greatest good you can do for another is not just to share your riches but to reveal to him his own.
If you cannot do great things, do small things in a great way.
The greatest good you can do for another is not just to share your riches but to reveal to him his own.
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Comments
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The figures are AERs.
It is the yearly, gross rate of return you will receive while your money is lent out at that rate.I am one of the Dogs of the Index.0 -
By the way, with the same model, Ratesetter's rates tend to be a bit better.I am one of the Dogs of the Index.0
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You will only get 3% if you reinvest your monthly repayments at the same rate or better, and those repayments are matched on the same day you receive them. In practice, this usually doesn't happen. I don't use Zopa, but there's been quite a lot of lender anger on its forum about not getting anywhere near the advertised rates, and about what the lender's perceive as Zopa's underhanded behaviour.
It's why I've opted not to use them.0 -
Thank you ChesterDog and TattyBear for your help. Im glad it's AER and i know that it is possible to trick people by offering 5% over the 5 year term, but not at a yearly rate. IE over 5 years your money would have grown by 5%.
Yeah i have seen some of the negative comments regarding ZOPA, but i still like to try things myself to see what its all about.
Thanks again!Great things are done by a series of small things brought together.
If you cannot do great things, do small things in a great way.
The greatest good you can do for another is not just to share your riches but to reveal to him his own.0 -
I use Zopa and Ratesetter.
Ratesetter match your loans much quicker,often on the same day,Zopa can take a couple of weeks0
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