Zopa in the current climate

getthemax

opinions4u wrote: »

So what, exactly, are you saying Zopa is secured against?

All Zopa loans are unsecured. At the end of the day it depends upon the risk assessment carried out by Zopa and the classification allocated to the borrowers and what grade of investors you choose to lend to.

I steered well away from Listings, they just seemed too flaky. I've been a lender for nearly 3 years, and started pulling money out about 3 months ago when I judged it would become increasingly risky to put money in there. I believe the number of defaults will rise over the next year or so.

My wife and I have jointly about £40k in Zopa, and have had about £300 bad debts so far. Overall interest rate of return ovr the last 3 years has been good though.

CoogarUK

opinions4u wrote: »

So what, exactly, are you saying Zopa is secured against?

I'm not. What I'm saying is that Zopa only loans out money which is already on deposit.

gozomark

getthemax wrote: »

My wife and I have jointly about £40k in Zopa, and have had about £300 bad debts so far. Overall interest rate of return ovr the last 3 years has been good though.

what APR have you achieved ?

easteregg_2

gozomark wrote: »

what APR have you achieved ?

About 9% so far.

Masomnia

I'm really tempted to try it, just to try and diversify a bit and hopefully make a little more. Was thinking of putting £100 in the high risk, not too much money, and could get a decent return. If it doesn't work out it's not the end of the world.

I was fortunate enough to have opened a 6.3% fixed Egg account, am I likely to make a return higher than this?

Also, since I won't pay tax this year I'm guessing I don't have to worry about declaring anything anywhere, is that right?

gozomark

v maybe 6% on fixed rate deposits ? A 3% pickup is OK given the risk, but hardly stunning IMO

Masomnia

gozomark wrote: »

v maybe 6% on fixed rate deposits ? A 3% pickup is OK given the risk, but hardly stunning IMO

Yeah it's instant access and I have it until next October.

I'm just wondering whether to put it in Zopa or maybe even invest more in funds. Like you say, for the sake of 3% it may not be worth it.

Blah99

CoogarUK wrote: »

The banks lent money they didn't have, secured against assets that were grossly overvalued (or worthless, as many turned out).

The underlying problem is the inability of debtors to pay creditors. I'm amazed anyone thinks Zopa is immune to this problem. By doing unsecured lending on Zopa you're taking direct exposure to this risk.

I'd love to know how many Zopa lenders actually fully understand the risks they are taking, but of course that's a catch-22 problem.

gozomark

this is what worries me abou it - the typical person who is borrowing this way, what interest rate would a bank charge them ? presumably more than they are being charged this way, or they would borrow through a bank. So you are betting that a bank's calculations are too pessimistic, at a time we are possibly going into a once in a lifetime recession... a possible 3% extra return wouldn't be enough to compensate me for that risk

getthemax

gozomark wrote: »

what APR have you achieved ?

Rates were quite low for the 1st 6 months or so, about 5% I seem to remember. It was gradually creeping up over time I found, and since we were quite conservative as to what markets we lent to we both got about an average of 7.5% p.a. over the 3 years. This wasn't as high as I think is possible if you wanted to take the extra risk.