Zopa

easteregg_2

I have been with Zopa for many years and I am averaging around 10%, but my bad debts are starting to rise (around 0.3%), as are my late payers (around 2%).

A lot of lenders think they if they set 10% they will get 10%. Unfortunately that is not the case as Zopa now charge 1% plus you have to allow for bad debts.

I think at the moment Zopa is looking a bit better for borrowers as there has been a large influx of funds recently, but with demand starting to rise it will benefit lenders.

CoogarUK

easteregg wrote: »

I have been with Zopa for many years....

Many? Zopa are still only in their fourth year of operation!

easteregg wrote: »

A lot of lenders think they if they set 10% they will get 10%. Unfortunately that is not the case as Zopa now charge 1% plus you have to allow for bad debts.

Plus you have to keep all your money lent out all of the time to maintain that rate as a 'return'.

rl290

easteregg wrote: »

I think at the moment Zopa is looking a bit better for borrowers as there has been a large influx of funds recently, but with demand starting to rise it will benefit lenders.

It's certainly a great deal for borrowers... but, with interest rates so low, even with much higher default rates lenders will see a markedly higher return than current savings rates to compensate them for the risk.

Tozer

Presumably the debt collectors decide when to classify a debt as "bad". What incentive is there for them to continue to pursue?

adampj

Tozer wrote: »

Presumably the debt collectors decide when to classify a debt as "bad". What incentive is there for them to continue to pursue?

Debt Collectors normally add "Admin" charges to the debt, in the aim to recover the original debt plus a bit of pocket money for themselves - they will then also add on charges for phone calls, personal visits, letters.

I think their aim is to chase a £10 loan from a lender, adding on £50 administration charge, £10 phone call charge, £20 letter, £100 visit... in a very short term they could quite easily be requesting £190....

If it's paid then the Debt Collectors are quids in. Interestingly if Zopa do go bust, Zopa have agreed with Debt Collection agency that they will service the outstanding balance for the life of the loan.

Tozer

Yes but there comes a point when debtors end up only being able to service the debt collection rather than repaying creditors.

Also, whilst I understand that Zopa have agreed with DCAs to recover the balance of the debts owed a) who enforces that agreement (individual creditors could not) and b) how could the DCAs administer so many microdebts?

LRW1975

Hi, does anyone know if we're allowed to add our Zopa member page links for the recommend a friend deal to this forum ?

Thanks

Lisa

ryandj

You can do so, on the referrers board.

Gorgeous_George

I've joined Zopa as a lender on Sunday, started lending on Monday, added more funds on Tuesday and I'm impressed by the openness of their website. Nothing is hidden from lenders or from borrowers.

I can see how Zopa benefits both lenders and borrowers. However, I would like shorter term loans, such as 12 months (Zopa only allow 36 or 60 months normally although other terms are available in the 'listings' area).

Risk-wise, it is true that risk is priced in to the rates that the individual lenders offer. However, small-time lenders like myself will find that their incidence of bad debt will be more random and will probably not match the overall risk (of bad debt).

Like all 'investments', you shouldn't gamble what you cannot afford to lose.

Borrowers have NO exposure to risk.

GG

Paul_Herring

Gorgeous_George wrote: »

I can see how Zopa benefits both lenders and borrowers. However, I would like shorter term loans, such as 12 months (Zopa only allow 36 or 60 months normally although other terms are available in the 'listings' area).
GG

Shorter terms are sometimes available on the Listings side of things (though Listings tend to be seen as riskier.)

They used to have 12 and 24 month terms on Markets, but they were removed under the fig-leaf of 'making things simpler for the lenders.'

I'd link to threads about it, but the search facility on their message boards is somewhat crap.

Edit: GMail search proved better than Zopa - here's one: http://talk.zopa.com//index.php?showtopic=2365