ZOPA - Anyone used this for short term loan ??

stylus360

Hi All

Just applied online for £6500 and it states it takes 24 for approval, then transfer to my current account.

I only want this as a short term 'bridging' loan and want to repay within one month from receiving funds.

Has anyone used these ?

Can i just repay what i want when i want ie transfer from current to Zopla ??

Any advice much appreciated.

paddyrg

You may be better off with the ratesetter (ratesetter.com) rolling market - more akin to credit-card borrowing, very flexible and you pay it off as fast as you like. IIRC the Zopa ones are designed around a fixed term. Currently around 4.4% APR plus a fiver or so a month in fees.

talana

From Zopa FAQs:
3. Can I repay my loan early if I like?

Yes. At Zopa, unlike at other loan providers, you can repay early, or in lump sums, at no extra cost. Because Zopa calculate the interest on your loan on a daily basis, this means you can save yourself lots of money if you choose to repay early.
For example, a £5000 loan over 36 months at 9.0% APR would cost a total of £5695 if you took the full 36 months to repay. But if you made your normal repayments and then repaid the whole of the remainder after 12 months, it'd cost a total of just £5373 - saving you £322. If you repaid in full after 18 months, the total cost would be £5509, and after 24 months it'd be £5609. So you can see the earlier you repay, the more you save. And Zopa don't charge a penny for this facility

As a lender, I've had borrowers repay within one month, sure

stylus360

paddyrg wrote: »

You may be better off with the ratesetter (ratesetter.com) rolling market - more akin to credit-card borrowing, very flexible and you pay it off as fast as you like. IIRC the Zopa ones are designed around a fixed term. Currently around 4.4% APR plus a fiver or so a month in fees.

How quick is the turnaround ?

Just applied at ZOPLA at 8.4% but as i mentioned i plan on paying back in full within a month.

Would my normal bank/building society offer me such a facility ?

I am with Nationwide.

Thanks

talana - I could not find that ???

DevCoder

http://uk.zopa.com/ZopaWeb/public/help/help-faqs-borrowing.html#early

paddyrg

stylus360 wrote: »

How quick is the turnaround ?

Just applied at ZOPLA at 8.4% but as i mentioned i plan on paying back in full within a month.

Would my normal bank/building society offer me such a facility ?

I am with Nationwide.

Thanks

talana - I could not find that ???

No idea re turnaround speed - but being a Friday, I'd press on if I were you and it was urgent.

Closest equivalent from your bank is probably a temporary overdraft - ask them!

Note it is ZOPA, not ZOPLA btw!

jamesd

For even as long as one month you're not likely to be paying anything close to 8.4% APR from Zopa. What was your fee? Say it was £100. A £100 fee on a loan of £6,500 is about 18.4% plus the underlying interest rate so you'd probably be able to get a cheaper overdraft or credit card cash advance deal for less than a month. The reason it's much more expensive than the APR suggests is that Zopa splits the fee over the whole three years you'll have applied for. That hugely reduces the fee effect compared to the real calculation for just a month.

The Zopa fee varies. It can even be 0. Or £190. So I don't know what fee you got.

Unless you get a low fee, Zopa can be a very expensive option for short term loans. However, do take a look at the Zopa loan cancellation terms:

"Once you have signed the Loan Contract and submitted your completed application to Zopa, you will have for FOURTEEN calendar days (starting the day on which you agree to the offer) a right to cancel the Loan Contract, orally or in writing without giving a reason.

If you wish to cancel the Loan Contract:

* you can send a WRITTEN notice of cancellation to contactus@zopa.com or cancel ORALLY by calling 0207 580 6060 (please be aware conversations may be recorded for evidentiary purposes);
* you must repay the whole loan amount (including interest charged, but not the Borrowing Fee);
* you must ensure the repayable amount is repaid to the Zopa Members' Repayment Account within 30 (THIRTY) days of sending your written notice of cancellation or cancelling orally. Should funds fail to reach that account by this time, you will be deemed to have accepted the Loan Contract such that our normal terms and conditions will apply as if the Loan Contract had not been cancelled."

Note that you don't have to repay the fee, have to give notice within fourteen days of applying but don't have to repay the money until 30+14 days from applying. Do use at least a few days of safety margin, don't push it to the end. That gives a short term window where you may be able to avoid the fee, but not the interest.

This still isn't really worth doing, because all lenders have to let you cancel a loan, so you can cancel and not be at risk of having a fee if you borrow elsewhere.

Note that I have never tried this, so do use care.

Declaration of interest; I've had a loan via Zopa and have lending offers via Zopa that aren't likely to result in lending to you at the moment, but in theory they just might if something unexpected happened.

Please let us know how you get on if if you do this.

So long as it's not for a home purchase bridging loan an averdraft facility would be one typical way to handle this.