Zopa. Neither a borrower nor a lender be!

Ted_Bloke

MSE_Martin wrote:

Update Note 2 March 2006

The fact that this is possible, is rather worrying in some ways. Why people are willing to lend at 4.6% when they could put it in a savings account and earn more, i don't quite understand.
Martin

I do because with the 2% subsidy that 4.6% becomes 6.6%.
But in what other ways is it worrying? :question:
I keep wondering and asking, see prev. posts.

MSE_Martin wrote:

However the fact that they are means cheap borrowing is now available and thus moneysavers should grab it.

I'm sure they should, seems to me it was always pretty good for them.
But now wharrabout the lenders? I keep on asking.
Where does the subsidy come from?
From taxes? gamblers? the future? banks? something will turn up? I've already speculated about most of these. And I just thought of something else. There is a big difference in what you pay for a loan according as you want a payback guarantee or not. Could selling basically insurance be part of the equation? But as a financial engineer I'm an amateur.
I mean when you get a financial product you are advised to understand it. I understand what they say. I don't understand how it works. And it doesn't work like other things of the same kind because there are no other things of the same kind.

PS
Now even yet my wonder grows as Zopa announces that they extend their subsidy offer to the 'B market' of less solid borrowers, where if you lend at 6.9% you are promised a return at 8.9% which after their bad debt estimate reduces to a less stratospheric 5.9%. Offer again valid for one month only, who knows for how long?

So, unreliable borrowers, pile in there, Zopa is very kind and generous to you.

As for lenders, I don't think I got an answer but ah well, silly me, I'd said I'd watch not just what Martin said but how he said it, that includes what he doesn't say.

Watch this space for what it doesn't say.

Kayleigh_3

I have seen a couple of threads where people are warning against lending with Zopa. But I want to take out a loan and they are definitely the cheapest rate.
Has anyone taken out a loan with them ?
How long did it take to process ?
Any other advice ?

blacksta

Almost did but was rejected and dont know why even do i had a very high score with them. So stuff them

newmoneyuser

The load process is slow as they do manual checking and it seems to take 3-4 days. As blacksta has noted, they seem to reject a lot of people even if they receive a high credit score.

The main forum thread on Zopa can be found here

HugoRune_2

MSE_Martin wrote:

Update Note 2 March 2006

Well zopa has now been around a long time and finally its rates, in some limited circumstances, have got competitive ( see updated cheapest loans article for when.

The fact that this is possible, is rather worrying in some ways. Why people are willing to lend at 4.6% when they could put it in a savings account and earn more, i don't quite understand. However the fact that they are means cheap borrowing is now available and thus moneysavers should grab it.

Martin

Quidco are offering 80 quid cashback if you loan/borrow at Zopa, this could have a lot to do with it, probably 90% of members of Zopa are also members of Quidco!

Jarlawuk

HugoRune wrote:

Quidco are offering 80 quid cashback if you loan/borrow at Zopa, this could have a lot to do with it, probably 90% of members of Zopa are also members of Quidco!

I just noticed the quidco offer as well - does anyone have any experience on how long it takes to get that £80? Was thinking of taking a £1k 6mth loan - get the £80 and pay off the loan straight away

jimmyjim_uk

Received an email today confirming that Zopa will be charging both lenders and borrowers a fee of 0.5% on all loans arranged through them.

Details here

Has anyone actually used Zopa?

payless

lenders are being charged 0.5% per annum !

meanmachine_2

Oh good grief. Could they make this any *less* attractive for a lender?

Well, they've just about managed it.

I give this outfit 6 months, at the most.

I wonder who *they* borrowed from to set this website up...

MSE_Martin

Interestingly from the borrowers perspective while it adds a cost it actually makes little difference - by the APR rules it must be incorporated so during a comparison you can still (providied you're not going for insurance) do an easy comparison. As for lenders.... while i'm still not a fan of considering zopa for that anyway!