Does anyone have any experience with Zopa Loans ?

Brenster

Hi I am considering a loan and Zopa seems to be very competative, user freindly and flexible. Has anybody got any experience (good or bad) with them?

27col

I assume that you know that Zopa does not lend its own money. It lends money supplied by individual lenders, such as myself. I am a Zopa lender and the rates are competitive because the lenders have to bid against each other to get their money lent out.
They are strict with their lending criteria because it is not their money they are lending. Borrowers can pay back extra or early at any time, without penalty. All this information is on the website, you just have to take the time to find it and to read it.
If you default they will go through the same recovery channels as other lenders. Although, because of their strict lending criteria, defaults are low. I hope the above is of some help.

Brenster

Hi yes I have looked through it, and read it all, but i just wanted some honest feedback from someone in addition to the website. I need £6k, and want to pay back in 18 months, unfortunately they only do 36 or 72, but its flexible and allows you to over pay or pay in full, so thats not an issue.
Got to say the business model is very impressive, undercutting the banks on both sides !

Moomum

We used them for a £6k loan a few years back, paid it back in under a year with no problem at all and rate was very competitive. Wouldn't hesitate to use them again.

jamesd

For a £6,000 target over 18 months why not try 0% credit card deals? It's often easy enough for anyone with good credit to get at least that amount and close to that duration and the rate - typically 2-4% initially then nothing until the end of the deal - will undercut all personal loan providers. Each of the cards in the list will let you transfer a balance from your current account to the card, which moves money to your current account.

If you can buy what you're after a 0% for purchases card can be even cheaper because you don't have the initial balance transfer fee to pay.

I had a loan via Zopa that I've completely repaid.

Use some caution with the APR they quote when your intent is to repay in 18 months. Check their fee. If it's 0, no problem. Else the effect of their fee on your real APR is roughly doubled because of the shorter term but they won't know this and won't display it. The same applies to any other loan with an initial fee.

If using Zopa, know that the time of the month, week and day affect the rate that you get. The best rates are likely to be available from about 10:30PM on the first Tuesday, Wednesday or Thursday that is one full business day after the start of the new month. Wednesday 2 May is the next of those days. The worst rates are early Monday mornings, near the end of the month and before 9PM in the early evening. The early morning of Monday 30 April is likely to be the next really bad day to borrow. All of this is subject to change because it's a market and rates vary.

The good and bad times to borrow are illustrated in this graph of demand vs supply. Times when the line is as low as possible are good for borrowers. The effect of this on rates is also available.

Declaration of interest: I have active offers in the Zopa market. It's currently unlikely that they will be used in any loans.

Brenster

James D that is very useful thank you.

I am consolodating a Credit Card, and 2 overdrafts. The credit card limit is at its max of £4k and to transfer to another CC their is no guarantee of the limit till you have been assessed and credit checked, + their is usually a transfer fee of 3% which when based on the total £6k to be consolodated will be £180.

I am currently paying about £40 a month interest for my overdraft, and about £25 for my credit card (was 0% but i used a couple of times to withdraw money stupidly), so £65 a month interest.

+ psycologically I am always in negative numbers in my bank, and it always a case of whats another £10 !

So the idea of this loan is to wipe these out completely. cancel my credit card and overdraft, and live within my means, if my bank account is £0 I will have to go without, I need this debt sorting once and for all. I have prepared a schedule and I can have the Zopa loan paid back in about 15 months, and for a £6000 loan, I think I will be paying no more than £3-400 interest and borrowing fee.

Thanks Again

jamesd

Hmm, not sure you'll get a loan from Zopa if you're always in your overdraft. It's a negative, just don't know how negative. No harm in trying, though. If you can qualify for a loan from Zopa there's no doubt at all that you'd also qualify for a credit card balance transfer deal. You could get a card, use it for a balance transfer and stick it in the freezer until done with it.

Brenster

I am in my overdraft but not and never has been over its limit, I will try, I really dont want to have too many marks on my credit history. Over the past 5 years I have had loans and paid them back so hopefully that will be a good point.
I know myself and I just want to have 1 point of debt, which is manageable, that is the best way for me to proceed.
Thanks for your help and support.

jamesd

Good luck with it.

paddyrg

Also give ratesetter a quick check - they have a 'rolling' market which is meant for people wanting to repay fast (a bit like a credit card than structured loan). If you're only borrowing very short term, and can overpay, you may find it cheaper. Like zopa, they're peer lending (members money, not their own), so rates are competitive

Brenster

Thanks for all your help and advise, James D was right, I wasnt approved by Zopa. I think they must be more strict than banks as I have been pre approved by my bank.

After further consideration I think I just need to work hard at paying off my existing debt off,

Thanks