Zopa????

halight

Hi all,

Do any of you use Zopa in invest your money? For thsoes who have not haerd of it then what you do is lean money out to people and a rate of intest of your choice.
It looks a good site. And seems a safe risk......

If you use it could you please let me know how you have got on with it.

Thanks

amcluesent

Have had £1000 on perpetual reloan for about 18months at interest rates between 6% and 12%

JMC39

I really like the idea of Zopa and have got a small amount (£100) invested. The rate I receive a fairly good (6.3%-10.5%) however it does mean that your money is tied in and there is the risk of non-payment (however this risk is spread).

Personally, I won't be adding any more as the risk/tie-in is too great for the returns.

halight

Thanks...

I also like the idea. But im not very keen on the tie in...
I have set up a account with them this morning But as i yet iv not put any money in. I think that i will be putting some small amout in. Over time and spead my risk over a few borrowrs. I might build up a totel of £500 in zopa over the next 12 months putting some in each month. And i think ill leand it out in £10 and £20 amounts to diffrnt folks. As i think over the next 12 months there my be high defaults in some of the loans at zopa (at the banks too)
Still if you look at the losses of my stocks the loan defaults will be a lot less!!!!! Still the stocks should come back up again at some point. And if im lucky the Gov

halight

Thanks...

I also like the idea. But im not very keen on the tie in...
I have set up a account with them this morning But as i yet iv not put any money in. I think that i will be putting some small amout in. Over time and spead my risk over a few borrowrs. I might build up a totel of £500 in zopa over the next 12 months putting some in each month. And i think ill leand it out in £10 and £20 amounts to diffrnt folks. As i think over the next 12 months there my be high defaults in some of the loans at zopa (at the banks too)
Still if you look at the losses of my stocks the loan defaults will be a lot less!!!!! Still the stocks should come back up again at some point. And if im lucky the Gov might pay out some for the bradford and bingley stocks that thay stole off me(yes i do think thay stole them im just glad that i did not put any more money in them when i had the chance with the rights issue)

rl290

I put £1,000 in Zopa in April and have been quite pleased with the results - my average lending rate is c.10% and I lend to all the markets. I put another £1,000 in recently and that is on the same lending offer. Everything is on perpetual relend, and I have no late payments nor bad debts.

R

amcluesent

If defaults are >3 % in 6 months time, that'll kill Zopa. If not, it could take off in a big way to disintermediate the banks.

Stavros_3

rl290 wrote: »

I put £1,000 in Zopa in April and have been quite pleased with the results - my average lending rate is c.10% and I lend to all the markets. I put another £1,000 in recently and that is on the same lending offer. Everything is on perpetual relend, and I have no late payments nor bad debts.

R

Sorry for being dense but how is your lending rate of 10% cheaper than the banks. Who is the money lent to, individuals or bona fide companys. What if a borrower defaults on your lending, thanks

amcluesent

Lending at Zopa

rl290

Stavros wrote: »

Sorry for being dense but how is your lending rate of 10% cheaper than the banks. Who is the money lent to, individuals or bona fide companys. What if a borrower defaults on your lending, thanks

I will only lend 10 pounds to one borrower at a time - this is what most Zopa lenders do. So, if someone comes along and wants a loan for 1,000 pounds, they will typically get 10pounds for each of 100 lenders. This has some huge benefits:

1. If a borrower should default (though none of mine have so far), then the most I will lose from them is 10 pounds. When you set up a lending offer, Zopa will indicate your "expected return" after taking account of the likelihood of people defaulting for the given credit ratings of people that you have offered to lend money to. It's worth pointing out that the whole risk/return profile of Zopa depends on how comfortable you are the fact that people may begin to default in larger numbers during, say, a recession.

2. Say someone with an "A*" credit rating wants to borrow 1,000 pounds from Zopa. Then Zopa will match them up with 100 lenders (each offering 10 pounds) starting with the lowest rates. There are lenders who are offering money to A* borrowers at only 3.5%! Then there are people like me who are offering 9.6% to this market. The rate the borrower sees is the average of all the lenders that are matched with him/her. So, they may get a loan at 7.5%. Of course, because the rate of my offer is relatively so high, it means that my money will take longer to loan out, as most loans are filled by lenders offering lower rates. Again, this is a factor that you have to take into account when deciding what rates to offer money at.

Hope that's all clear. Apologies for the lack of a "pound" symbol on this keyboard!

R

halight

I think that the fucher may be in trading clubs loan clubs and credit unions as well as building soc.
More and more people are getting fed up of banks.
People like to deal with people. Thay like to know whos getting there money and were there money is.
But as a share holder in banks if more and more go looking wlse were for there loans and savings then my divis will go down (not that im going to be having any for bit!)
We will just have to see what happens.................