Has anyone had any dealings with Zoopa or Funding Circle?

geek84

Hi Folks

As you know, interest rates are at an all time low, and the money sitting in banks/building society accounts is earning next to nothing, in terms of interest.

Websites such as Zoopa and Funding Circle offer individuals the opportunity to lend money to other individuals or businesses, and can expect to earn interest on that money of up to 9%.

I am thinking of doing this, so just wanted to know if anyone has had any good or bad experiences of this?

Thank You.

xrjtg

I have lent money through both Zopa and Funding Circle, and have been very happy with how they are run. I'm not currently making new loans, but only because there seems to have been a flood of new money, and interest rates have fallen. I managed to lend at an average rate after bad debt and fees of 8% over the summer, but I believe the equivalent figure now is much lower (around 5% maybe).

If you're happy with the rates on offer then go for it (and do let me know if I'm wrong about how low the returns have fallen!).

EDIT: There's nothing to stop you opening accounts with each and playing around with tiny amounts of money just to see how the system works: in fact, I recommend you do this if you decide it's something you want to try.

The tax situation as described below by evening2005 is important to understand, so make sure that you do.

evening2005

geek84 wrote: »

Hi Folks

As you know, interest rates are at an all time low, and the money sitting in banks/building society accounts is earning next to nothing, in terms of interest.

Websites such as Zoopa and Funding Circle offer individuals the opportunity to lend money to other individuals or businesses, and can expect to earn interest on that money of up to 9%.

I am thinking of doing this, so just wanted to know if anyone has had any good or bad experiences of this?

Thank You.

I'm a lender at both Zopa and Funding Circle. Rates are down at Zopa at the moment and you have to watch the bad debt and tax situations. You can't write off the money you lose through bad debt. The obvious advice is to stick with the "safer" markets, but of course money loaned out in these markets attracts a lower rate of interest.

I have found both organisations to be very efficient. There is a good set of forums at Zopa (talk dot zopa dot com). The lenders' forum has a wealth of interesting information. There is a "Funding Circle" thread on the chat forum as many Zopa lenders are also active at FC.

Obviously peer-to-peer lending carries no guarantees so you should exercise caution.

Reaper

For more opinions type "Zopa" or "Funding Circle" into the forum search tool. For Zopa in particular you will find many previous discussions.

lottoshare

geek84 wrote: »

Hi Folks

As you know, interest rates are at an all time low, and the money sitting in banks/building society accounts is earning next to nothing, in terms of interest.

Websites such as Zoopa and Funding Circle offer individuals the opportunity to lend money to other individuals or businesses, and can expect to earn interest on that money of up to 9%.

I am thinking of doing this, so just wanted to know if anyone has had any good or bad experiences of this?

Thank You.

I heard a rumour that the Funding Circle is closing. Their website is currently down.

Biggles

lottoshare wrote: »

I heard a rumour that the Funding Circle is closing. Their website is currently down.

No, it's not.

"Funding Circle is currently undergoing scheduled maintenence.
We expect this work to be completed and normal service resume shortly".

What is the source of your 'rumour'?

edinburgher

I've used Zopa for a few years, no losses (smallish portfolio), no late payments and a pretty good rate.

Then again, it's not the same for everyone (although their default rates are impressively low in the grand scheme of things).

Biggles

Further update:-

UPDATE 11:45 05/04/2011

We have experienced a hardware failure at our datacentre which has caused the site to run extremely slowly. Our hosting provider is working to replace the relevant hardware and we hope to bring the site back up shortly.

We appreciate your patience as we deal with this issue. All auctions due to finish today will be extended to allow lenders time to bid.
Please accept our apologies for any inconvenience caused.

For more information contact: [EMAIL="info@fundingcircle.com"]info@fundingcircle.com[/EMAIL]

The Funding Circle Team

mr_fishbulb

Been thinking of dipping my toe in the funding circle too.

Is the tax on interest taken as income tax, or CGT, or something else?

Biggles

You have to declare interest to HMRC and pay income tax.