Zopa

msmyth18

What are peoples feelings about Zopa?

Ive currently got £70 lent out to 7 different borrowers- 2A* 2A and 3 from Listings.

My average rate of return is 8.62 % and overall im fairly impressed with the service. I havent had anyone default *touchwood* and it seems a very good alternative to banking!


Basically I'm getting to the point where im looking at the rates on my ISA and thinking why bother with that at all?

Im looking at buying a place of my own Mid-Late 2014 so tieing up my cash isnt a problem at the moment.

My main questions are-

What is your experience of Zopa lending?

Have you ever had a default- If so was it delt with?

How do you 'hedge' your bets on who to lend to/ Which markets?

Thank you in advanced!

ninky_2

i wouldn't bother. i 'offered' 1k in may just to see how it went. still waiting for a large chunk to be lent out. think this may be because i wanted only top credit rated borrowers - but there were no warnings that they couldn't actually provide many of these type of borrowers. no defaults yet but not much return either.

Jonbvn

ninky wrote: »

i wouldn't bother. i 'offered' 1k in may just to see how it went. still waiting for a large chunk to be lent out. think this may be because i wanted only top credit rated borrowers - but there were no warnings that they couldn't actually provide many of these type of borrowers. no defaults yet but not much return either.

You have not lent a large chunk of your money out because you have set the rates you require too high.:money:

Personally, I have been lending on ZOPA since 2007. I have had a good and bad experiences so far. I had several loans from 2008 default, due to my optimistic assessment of the risk of lending on listings. I also understand that ZOPA have tightened up their checks since then. Now I better appreciate the risks and how ZOPA works, my return is improving considerably, as I trickle money into ZOPA.

BTW, since it takes time to get money lent out, it is generally better to trickle money in, rather than pay in large chunks.

ninky_2

Jonbvn wrote: »

You have not lent a large chunk of your money out because you have set the rates you require too high.:money:

.

actually i didn't set the rates i lent at, i just went along with the rates they offered for the credit rated levels i was happy to lend to - in fact a lower rate than less well rated borrowers. however it seems that zopa generally attracts borrowers who can't get loans elsewhere so not the pick of the crop.

i'll see how it goes anyway.

Paul_Herring

msmyth18 wrote: »

What is your experience of Zopa lending?

Of the lending itself - been there since March '06. Put about 4K in, taken 1K out.

Have you ever had a default- If so was it delt with?

4 defaults totaling around £35 so far. currently 12 late totaling £90. What do you mean by 'dealt with'?

How do you 'hedge' your bets on who to lend to/ Which markets?

I have offers set up in 0.1% increments that cover all markets. So, for example, the '9.9' offer will have 9.5% on A36, and differing rates on the A60/B/C/Y markets.

Money coming back in goes to whichever offer I think it needs to go into.

Maximum per borrower per offer is set to £10.

Farway

Now I have no experience of ZOPA, but are posters saying they just lent £10 to someone?

Maybe I am very naive, but are some people really so in need that they want to borrow £10 at around 8%?

Feel free to correct me if I have misunderstood or am not on this planet regarding cash flows of others, I would lend a tenner to many, and not really expect it back from a complete stranger

If I could lend a tenner and get nearly £11 back it seems I may be missing something here

msmyth18

Farway wrote: »

Now I have no experience of ZOPA, but are posters saying they just lent £10 to someone?

Maybe I am very naive, but are some people really so in need that they want to borrow £10 at around 8%?

Feel free to correct me if I have misunderstood or am not on this planet regarding cash flows of others, I would lend a tenner to many, and not really expect it back from a complete stranger

If I could lend a tenner and get nearly £11 back it seems I may be missing something here

Check out the zopa website...

Basically you lend out a chunk of a loan to someone from £1000-£15,000.

The smallest amount you can lend is £10 and you set the rate you want it lent out at.

E.g for a £1000 loan there could be 100 lenders each lending a tenner.

Thats probably an awful explanation, but the website will help you more!

msmyth18

Paul_Herring wrote: »

4 defaults totaling around £35 so far. currently 12 late totaling £90. What do you mean by 'dealt with'?

Thank you for your response.

For example your 4 defaults have Zopa organised recovering the money?

And for the 12 late payments do they chase them and keep you in the loop ?

Paul_Herring

Farway wrote: »

Maybe I am very naive, but are some people really so in need that they want to borrow £10 at around 8%?

People borrow a lot more than that, but lots of lenders contribute £10 (or more) to make up that loan.

Individual lenders will make differing amounts on the money they contribute to that loan and it is the average rate that comes to (in your example) 8%.

Necessarily, to get that rate, for all those getting more than 8% there will be those getting less than 8% in order for it to average to 8%.

To expand on msmyth18's example:

40 lenders offer £10 each at 6%
20 lenders offer £10 each at 8%
40 lenders offer £10 each at 10%

The loan then becomes £1000 at 8%.

In reality, the loans are for more than £1,000, some lenders offer more than £10 per loan, and the variety of individual lender interest rates is greater.

Paul_Herring

msmyth18 wrote: »

For example your 4 defaults have Zopa organised recovering the money?

"Default" happens after attempted recovery, and the recovery is deemed to have largely failed. Before that they are 'late payments.'

But to be more specific, to select one of them - I have this recorded by Zopa against it (in reverse chronological order):

[09/11/09]The Insolvency Service has written to Zopa explaining that there is no prospect of a distribution of funds and therefore a meeting of creditors will not be held to establish the owed debts. The loan has been set to "Default" and no funds can be expected to be returned.
[09/10/09]Borrower has defaulted on loan. CRS have requested a field agent to chase the outstanding amount at known premises.
[180909]A Notice of Default has been issued and the borrower will be "In Default" if no response is received within 14 days
[05/08/2009]CRS are chasing the borrower
[02/07/2009]CRS are chasing the borrower
[15/06/09] Referred to CRS
[08/06/09]A notice of late payment is issued to the borrower.Will be passed onto CRS if he doesn't contact Zopa in the next 7 days
[02/06/2009] Borrower has been notified of missed payment.

Another:

[27/05/10]IVA has been amended to an estimated 68p in the £1 over 5 years. The first dividend will be paid in May 2011
[12/05/10]Zopa has requested for modifications in the proposed IVA to increase the expected dividend; current expected dividend is 48% over 60 months and will inform lenders when the outcome of the proposed IVA has been announced. The meeting of creditors will be held on 26th May
[01/05/2010] Borrower has been notified of missed payment.
[27/04/10] Zopa has received a request for information from an insolvency practitioner. The member will be applying for an IVA

And for the 12 late payments do they chase them and keep you in the loop ?

Yes - using the same mechanism shown above, as you can see from the earlier comments in both of them.

From one of the late payers (anonymised):

[25/5/10]Borrower has advised Zopa that he cannot maintain payments due to reason. Agreed to accept reduced payment for xmths.

Another:

[27/07/10] Partial payment received
[05/07/10] Member has made a token payment. Payments to resume with CCCS from sept
[08/06/10] Member has made a token payment to Zopa
[27/05/10] Member has not made any payments to CCCS due to an unexpected expense.Member will resume payments from July onwards.
[27/4/10]Partial payment received via CCCS.
[26/02/10] Partial payment received from CCSS
[28/10/2009] Borrower has been notified of missed payment.[01/10/09] Payment received for 101.75 by CCSS
[28/10/08] Borrower has set up a Debt Management plan with the first payment to be made on 25/11/08.
[20/10/08] Borrower has made another £50 payment
[25/09/08] IVA rejected by creditors. Borrower is looking to arrange a debt management plan and has made a £50 payment to partially cover arr

But to put this into context, since I've been with Zopa, I've had 750 'contracts' (I won't say 'borrowers' since some borrowers have had more than one contract so would be double counted,) and only 4 of them have defaulted, and of those 12 late I expect few, if any, of them to default.

msmyth18

Paul_Herring wrote: »

"Default" happens after attempted recovery, and the recovery is deemed to have largely failed. Before that they are 'late payments.'

But to be more specific, to select one of them - I have this recorded by Zopa against it (in reverse chronological order):


Another:


Yes - using the same mechanism shown above, as you can see from the earlier comments in both of them.

From one of the late payers (anonymised):


Another:


But to put this into context, since I've been with Zopa, I've had 750 'contracts' (I won't say 'borrowers' since some borrowers have had more than one contract so would be double counted,) and only 4 of them have defaulted, and of those 12 late I expect few, if any, of them to default.

Wow! So overall if im sensible about who i lend to, and 'put my eggs' into many baskets i shouldn't really see much defaulting! Thank you for taking the time to reply!