Thoughts on Zopa?

john10001

What are your thoughts on Zopa the peer-to-peer lending company (and similar companies)? Do you see any positives and negatives?

The big negative I see is that if you miss a payment by even just one day that is a 22.5% fine of the amount you missed which could rack up quite a bit. Contrasted to the fixed £12 fine a lot of banks and credit card companies charge and the £6 that Nat West do it is pretty colossal. It is 40% if they use "field agents" whatever they are?

The only positive I see so far is that applying doesn't effect your credit file and the interest rate seem reasonable for a loan at the moment though I am not sure that is the rate you would get?

BugsyBrowne

They are a good outfit the Zopa boys they concentrate more on people who just don't miss or late on Payments ever which is a good thing where as applying for a credit card you might be accepted with a couple of late Payments.

As its Peer to peer lending any descrepencies on your credit files will be instant decline.

tonkinator

I like the idea of social lending/investment

As Bugsy said you wont get accepted unless you have a squeeky clean credit rating.

Still don't see it as a viable investment oppurtunity for savings, at the moment, as Idon't think they guarantee a return (that could have changed now? anyone?)

Apples2

If you are already considering the fall out from missing a payment, is a loan a good idea anyway?

Never take loans unless you are in no doubt the repayments will be made.

paddyrg

Peer lenders Zopa and Ratesetter operate at the top end of the market only. If there's any question that you may miss a payment, they're not for you frankly.

KingElvis

Ever seen Men in Black? then they are the same "field agents" that Zopa use.

27col

Zopa only lends out the money of savers like me and not their own money, they take good care not to lend it to anyone they think is likely to miss payments.
The stricter their criteria are, the more I like it. I did not put my hard earned savings into Zopa so that some low life with financial problems could take it off me. They must be doing something right, as I have only had two defaults out of about 90 loans. If there were many more defaults, I and no doubt, many others, would pull our money out. We are not philanthropists, we are just trying to get a reasonable return on our savings.
It's not like a bank, any bad debts that our borrowers run up, represent a total loss to us. It is not like when the government guarantees savings in banks or building societies. Our savings are at the mercy of the borrowers. So, I for one am not interested in lending to anyone who is likely to default.

geoffky

Zopla are a great addition to the market and i hope they do not lend to people who have no intention of paying it back unlike payday loans.

geoffky

27col wrote: »

Zopa only lends out the money of savers like me and not their own money, they take good care not to lend it to anyone they think is likely to miss payments.
The stricter their criteria are, the more I like it. I did not put my hard earned savings into Zopa so that some low life with financial problems could take it off me. They must be doing something right, as I have only had two defaults out of about 90 loans. If there were many more defaults, I and no doubt, many others, would pull our money out. We are not philanthropists, we are just trying to get a reasonable return on our savings.
It's not like a bank, any bad debts that our borrowers run up, represent a total loss to us. It is not like when the government guarantees savings in banks or building societies. Our savings are at the mercy of the borrowers. So, I for one am not interested in lending to anyone who is likely to default.

Col what is the average rate you are getting?
i have a wedge with newcastle bs at 5.5% but will need a home for some money next month that needs to pay its keep..

27col

geoffky wrote: »

Col what is the average rate you are getting?
i have a wedge with newcastle bs at 5.5% but will need a home for some money next month that needs to pay its keep..

In the last month 6.6%, and since I joined a couple of years ago, 7.15%. Note that this is after the 1% fee that lenders pay to Zopa

BugsyBrowne

I think Zopa lenders are people with a small pocket of savings hoping for a few quid earned in interest on their little lending they've done as anyone with a big wedge wouldn't dare risk shuffing their loot into what possibly could be a disaster.