Zopa. Neither a borrower nor a lender be!

sophistry

Hi - new to the boards so I might be asking a question that was answered ages ago, if so, apologies...

Just followed Martin's advice and had a look at Zopa - after getting rid of three of our credit cards we just have one card and a bank loan to get rid of (mind you, they total over £30k). Our bank loan is costing us 7.9%, they have offered to reduce it to 6.9% to keep our business but thought I'd try apply for a cheaper alternative first.

Love the idea of Zopa, love the principles, so I was going through the process of becoming a member so I could apply for a loan when I read carefully through the terms and conditions and discovered that they charge a one-off fee of 0.5% of the loan when you take it out, plus 0.5% of the outstanding balance as a monthly fee. As we wanted to borrow around 15,000 this would mean paying £75 to start with, then close to that every month for 5 years while we pay it off, obviously this would reduce as the balance went down but even so...

My question is - does this still make them cheaper, assuming I get a rate of less than 6.9%, than my bank? I have to say, even if it worked out the same price, I'd be tempted to go with them on principle alone, but just wondered if anyone here has used Zopa and what the experience/overall cost was?

Thanks for listening,
Keep up the good work, Martin
Sarah (the one who ran crying from the bank and saw a car sticker right outside - yay!)

liz_uk

http://www.zopa.co.uk/ZopaWeb/default.aspx

MarkyMarkD

Note to moderators - I can only imagine that the post above was a new thread which was pointlessly started, and then merged here instead.

Why not just delete things like this? They just clutter up the boards and revive threads which don't need reviving.

Zopa most certainly ISN'T a good lending site, and it's only a good borrowing site because those doing the lending aren't getting a sensible rate of return for the risk involved.

ruddoug09

Hi

Has anyone used the new lending website Zopa - basically, all I need is a 2k to 3k loan to repay over 2 or 3 years at the lowest possible rate.

Any help appreciated?

Grumpy_Old_Duffer

I seem to remember this company being discussed here about 18 months ago .........

Yup! Search just confirmed it!!;)

Rafter

For a small loan they may be a good option for you - make sure you factor in their lending charges though.

Big banks don't offer their best rates for loans under £5k or over shorter periods.

If you are an egg customer, you may be better off getting a flexible loan from them for £5k then immediately repaying what you don't need. All depends on what rates you get offered though.

Good luck.

R.

matto

You can repay Zopa loans early without any penalty.

ruddoug09

Thanks for the help people, I appreciate your time!!!!!

ruddoug09

I've opted to go for a Northern Rock loan at 5.7% with no early repayment charges, slightly more than Zopas rate of around 5.2% but I think the extra few pence a month are worth it for the security of being with one of the big financial institutions.

I know Martin has said Zopa for borrowers seems safe enough, but theres just something that nags me about them and I'm not going to take that path.

Thanks again for everyons help.

Rafter

At the end of the day, zopa is still a commercial organisation with directors and investors who are hoping to make money out of it.

Are they really any different from a bank then by claiming to cut out the middle man?

Hope you manage to get the NR loan at 5.7% and make sure you don't fall for the hard sell on PPI.

R.