Zopa?

pjbltd

Hi all

Just heard about Zopa from reading this article:
http://www.timesonline.co.uk/tol/money/savings/article5816534.ece

Am thinking of joining the Lending side and wanted to know if there was anything extra I should be warned of or any advice from fellow Zopa Lenders?

I am not planning to lend a lot. Maybe £500-1000.
It looks good but must be some catch for example I find it hard to believe the last part of the times article:

" “a Zopaholic”. He receives an average return of 10.5 per cent each month"

Any advice much appreciated

Thanks

ps. any cash back or sign up bonuses?

cliffski

I stuck £100 in it a few weeks ago, just to see how it works. the interest rates are astonishingly good, the only downside seems to be you HAVE to lend for either 3 or 6 years, which is a bit long term for me.
Still, for long term savings it does seem truly excellent.

agsnu

cliffski wrote: »

I stuck £100 in it a few weeks ago, just to see how it works. the interest rates are astonishingly good, the only downside seems to be you HAVE to lend for either 3 or 6 years, which is a bit long term for me.
Still, for long term savings it does seem truly excellent.

The interest rates would be astonishingly good if there were zero defaults. Nobody really know what the default figures are going to be for the future

pjbltd

you have to lend for 3 to 6 years?!

ffacoffipawb

pjbltd wrote: »

you have to lend for 3 to 6 years?!

3 to 5 years, although for listings I have seen 2 year loans.

Robert_Sterling_3

Has ZOPA been going long enough for even a single person to get their money back?

agsnu

Robert_Sterling wrote: »

Has ZOPA been going long enough for even a single person to get their money back?

It was launched in 2005 and there used to be shorter terms (6, 12, 24 months), so undoubtedly yes - although AFAIK most people automatically re-loan their repayments out rather than withdrawing.

littlemrtinkle

i am seriously considering gambling a couple of hundred, has to beat the lottery which i haven't won anything on in years :-)

theGrinch

as unemployment rises then defaults are expected to rise also. i dont think zopa has been going long enough for a 5 year view on returns and risk yet.

i know the site's owners have been speaking to govt about the concept. is it possible for them to insure against bad debts?

withnell

Remember you get money back each month with the payments, which go into a holding account paying 0% - so unless you withdraws that money pretty regularly it soon drops the return % down

SpinnerB

It's an investment (gamble) I've go 3 late payers right now ... but I've also got loads of prompt payers, on the whole I'm happy with my returns, that get reinvested into new loans ... jut not too sure what happens if I die, wishing they didn't drop the 12 mth option