Zopa????

getthemax

Both myself and my wife have around £22k invested with Zopa for nearly 3 years, and the bad debt rates have been extremely low. I think in total we've probably had about £300 between us in defaults.

However, I have noticed that recently the default rate has crept up, whereas in the first year of investing we had no defaults. I should add that we had very small loan size (£20), so correspondingly a large number of borrowers.

So we've both decided to pull out of lending for the foreseeable future, and are now gradually drip feeding the returned capital and interest back into other more normal accounts.

I think Zopa is a brilliant concept, and shall return back to lending on it again when saner financial times appear - hopefully!

I should add that my average gross lending rate since I joined is 7.12%, so not bad compared with an ordinary savings account.

Jonbvn

I have lent on ZOPA over the last 18 months. So far I have only had one £20 loan go bad. The bad debt rates are incredibly low. They are bound to get worse in the near future. Overall, I see ZOPA as a good way of diversifying my portfolio.

Recently I have been lending on listings and my average lending rate has nearly reached 12%. Note that this is not directly comparable to a savings rate on a lump sum, since as the borrower pays back the capital, the interest they pay reduces. However, with each loan repayment, you can lend to another borrower so you see the effects of compounding in short order.

easteregg_2

I too lend on Zopa as I've been there since it started. I'm currently averaging about 14% before bad debts, around 10% after estimated bad debts.

jamesd

I was highly critical of Zopa for lenders so in August I decided to try it to see if I could get enough return above a 10% regular saver account to make it worthwhile. Here are the results so far:

Lent	Av Rate	AfterFeeBD	ToBorrower
Markets		1530	16.13	12.81		12.48
Listings	640	18.91	13.61		17.00
All loans	2170	16.95	13.04		13.93

Lent: the total amount I've lent in that area, markets or listings.
Av rate: the average interest rate before fees and bad debt allowance.
AfterFeeBD: the average interest rate after deducting the Zopa fee (0.5% for me, 1% for newcomers) and bad debt allowance.
ToBorrower: the average rates the borrowers were offered from all lenders who participated.

The borrowers I see are usually doing debt consolidation or refinancing and end up with a lower interest rate than they had before.

Note that to get this I've also had some 2,000 in offers and am accepting as much as 330 lent to a single borrower in the markets - in four cases I have lent more than 80 per borrower in the markets. It's likely that after fee and actual bad debt I'll end up with around 14-15% return.

Please note that these numbers are due to extreme gaming of the system and don't represent readily achievable results with low time investment.

There's a thread with signup offers over on the referrers board.

opinions4u

Like the concept, but I really don't think the start of a recession is the time to set myself up as a provider of unsecured credit to individuals I don't know.

Will defo revisit when the good times return!

mroller

Do you have to fill in a tax return to declare the income from Zopa? if yes, then not worth the hassle for me!

getthemax

mroller wrote: »

Do you have to fill in a tax return to declare the income from Zopa? if yes, then not worth the hassle for me!

You have to declare the income as it's untaxed when you receive it.

stevetodd

getthemax wrote: »

I should add that my average gross lending rate since I joined is 7.12%, so not bad compared with an ordinary savings account.

But I think it is bad, as within the last 10 days I have deposited money with BM at 7.05%, KE at both 7.15% and 7.67%.

Also I suspect that money whilst loaned out is either only earning a small rate of interest or perhaps even worse no interest? If so this brings the headline rate down to a lower 'actual achieved rate' This looks like an awaful idea to me, which requires a management input (ie loaning out the money) possibilities of default and periods of no (or littlle interest) between loans

getthemax

stevetodd wrote: »

But I think it is bad, as within the last 10 days I have deposited money with BM at 7.05%, KE at both 7.15% and 7.67%.

Also I suspect that money whilst loaned out is either only earning a small rate of interest or perhaps even worse no interest? If so this brings the headline rate down to a lower 'actual achieved rate' This looks like an awaful idea to me, which requires a management input (ie loaning out the money) possibilities of default and periods of no (or littlle interest) between loans

Yes, but bear in mind that when I started lending nearly 3 years ago the average rate on deposit account was about 4-5% going by memory.

You also get paid interest on money waiting to go out, but I can't remember what rate that is, probably about 4%.

I found that on average on about £12k at any one time I had about £200 in my holding account waiting to go out, the rest was out there earning interest.

Before I stopped re-lending money was going out at nearly 10% a week.

There is an auto re-lend facility which just offers your money out again as soon as it comes in, so little management is needed other than tweaking your offer rates if you wish.

Jonbvn

stevetodd wrote: »

This looks like an awaful idea to me, which requires a management input (ie loaning out the money) possibilities of default and periods of no (or littlle interest)

You mean a bit like some Icelandic banks?;)