Zopa in the current climate

Paul_Herring

CoogarUK wrote: »

So why then do Zopa always refuse to come up with definitive figures for active members on the basis I already stated - "Sorry, that's commercially sensitive information which we will not divulge" - each and every time the question is asked by an inquisitive member?

Because (commercially sensitive) information not willingly given (and exact member numbers would come under this) is none of your business?

Just a suggestion that's different from any usual conspiracy theories. :rolleyes:

Ted_Bloke

LucyTheDwarf wrote: »

I have decided to try Zopa again (gave up last time, because I was determined to get a rate better than I could in a bank (6% at the time), and no-one wanted my money)... but I'm chicken, so I've only put £20:eek: in. I'm aiming for 8% now. I don't care if I lose £20, I'm just seeing what happens.

I hope you put it in £10 max/loan amounts so as to spread your risk!

jamesd

Someone who's patient and wants to dip their toe in might want to try 100 Pounds, ten Pounds per borrower and use the easy lend option to look for 15.9%. If you want it to move a bit faster, try 14.9%.

If you want less chance of seeing any bad debts, drop the rate by 1% and remove the C and Y markets.

If you want to limit the loans to three years instead of five, drop the rate by 0.8% and remove the 60 month markets.

If you're more patient add 1% and expect it to be lent out more slowly.

These rates aren't guaranteed. Just what I think are fairly likely to get your money lent out at very attractive rates at some point over the next month. My view could even change by tomorrow depending on how I see the market doing - sorry, that's just the nature of trying to predict the future.

CoogarUK

Paul_Herring wrote: »

Because (commercially sensitive) information not willingly given (and exact member numbers would come under this) is none of your business?

Yet the information is 'easily' compiled from the figures contained in their publicly available spreadsheets?

Hmmm, in that case let's hope Zopa are more careful with our money than they are with the information they are unwilling to provide yet leak to the geeks :cool:

ViksB

Are there any valid referral threads for Zopa, all the ones seem to expire at the end of 2008?

Thanks

jamesd

None I know of. If you're going to put the money in now you could do worse than trying the last offer in the hope that it will simply be extended.

Palm_Centro

Is that 8% before or after bad debt ?

jamesd

Palm Centro, not really significant now because 8% even after fee and bad debt allowance would be matched to loan applicants within hours. The new year borrowing rush seems to have started.

Today I had A market 60 month application matching at rates before fee and bad debt allowance as high as 10.7%. Since the bad debt estimate for 60 month A applicants is 0.8% a year and the Zopa fee is 1% for new Zopa members that 10.7% is equivalent to 8.9% after fee and bad debt allowance.

Possible rates are likely to stay about the same or drop a little over the next few days as the start of the month repayments from existing borrowers arrive, then increase rapidly. This anticipated increase is why I gave rates well above 8.9% after fee and bad debt allowance (the easy lend way) for those who were content to wait as long as a month.

I'm offering lower rates because I want to see more of the market, because I have a lot of money to move and because I want to spread that money around quite a lot in both time and number of borrowers. But I'm still not looking to lend a lot this week... just a trickle so I see what's happening.

jamesd

For anyone looking to lend money quickly, here are the rates that I expect will be matched at some point over this weekend.

A*60: 7.9%
A60: 7.9%
B60: 7.9%
C60: 8.5%
Y60: 8.5%

A*36: 6.3%
A36: 6.6%
B36: 6.2%
C36: 6.4%
Y36: 6.4%

No guarantees, this is predicting the future and that's inherently unreliable. Rates are after Zopa's fee and bad debt allowance, the same ones you'd use for easy lend. I'm assuming you're paying a 1% Zopa fee, add 0.5% if you're paying 0.5% because you signed up before the summer. If you're new to Zopa please use £10 per borrower as your exposure limit while you're getting a feel for how things work. These are not the highest rates that I expect to be matched, they are the ones that might be used to get money matched fairly quickly.

jamesd

Several 60 month markets ran out or almost out of money to lend today and I saw a fair bit matched at rates above 13% after fee and bad debt allowance (above 17% before). What's happening at the moment is people taking loans when they can't fully pay off their Christmas spending credit card bills, making this the best month of the year for lending.

If you're interested in high rates you might consider something like offering £50-100 each at 10%, 11%, 12%, 13%, 14% on the quick lend screen for 60 month markets only, checking that it's set to a maximum of £10 per borrower. A single borrower can get money from several of these, the number of them depending on how much money is available from other people and how big the requested loan size is. The higher rates will be lent out fairly slowly, mostly when there's a shortage of money to lend. If you have less money or want to reduce the amount one person can get, you might try 10%, 12% and 14%.

Don't go below £50 per offer if you can help it, because you want to match several different people. £10 per offer in five offers is worse than £50 in one.

The lack of money today will probably result in a lot of money being added on Monday and Tuesday, so don't expect instant results - it'll take a while to drain the new money from the markets.

No guarantees, this is trying to predict the future and that's inherently error-prone. Also note that the way someone can match against several rates means that there may be relatively little diversification, so a single defaulting borrower might cost you a greater loss than the total bad debt allowance provides for. Lending to more people (more money per offer/rate, still in £10 units) or with a 2% gap in rates instead of 1% is the way to address this, so if you're unlucky with one borrower the rest still pay the risk premium to cover it.