Is Zopa any good?

Arlyd

Hey guys,

I've got a bonus coming through from work tomorrow and I'm going to have about £1000 laying around.

I don't want to waste it and I don't want to put it in a savings account and earn a miserable £15 a year... Then I remembered a mate told me about Zopa.

Has anyone got any experiences with Zopa? Positive or negative would you mind sharing? It seems a win win. What happens if someone does pay back? Do Zopa take them to court?

Thanks!

Daryl

DCFC79

Yes theres nothing wrong with zopa, if you search the forums theres a thread on P2P lending sites where zopa is mentioned.

[Deleted User]

Arlyd wrote: »

What happens if someone does pay back? Do Zopa take them to court?

That would seem rather harsh.

bigadaj

The problem is OP that it ain't going to make you a millionaire.

Any from of lending has defaults and these will be factored into the return you actually receive, you can get 5-6% on current accounts or regular savers and Zopa or similar will probably struggle to beat this in net terms.

Apples2

Arlyd wrote: »

What happens if someone does pay back? Do Zopa take them to court?

Lets assume you mean doesn't but essentially, Zopa do all the running and chasing through debt collectors and CCJ's if necessary.

Sadly the lenders bear this cost though so you may not get all of your money back. That's the biggest risk and there is no FSCS protection.

Bear in mind you don't lend the whole lot to one person, it is spread out (used to be £10 each) so you end up with hundreds of borrowers on your books, all for a few quid each so your exposure isn't very much per borrower.

Arlyd

Thanks for all your replies.

Yeah sorry I meant what if they don't pay back but hey, if it's £10 a person (which their website seems to imply) then the impact seems minimal if they default.

Anyone got any success stories from this? I know it won't make you a millionaire but I'd love to give a realistic idea of how much you can return.

Thanks again

Apples2

Arlyd wrote: »

Anyone got any success stories from this? I know it won't make you a millionaire but I'd love to give a realistic idea of how much you can return.

Not sure how you define a success story. I have been lending on there for a few years.

Like you seem to imply, I went in hoping to see my returns piling up but after a short while I simply clicked a button to send any returns straight out to more lenders.
Now my money just goes round in circles getting bigger each time.

You can have a quick return if you want but I pretty much ignore it now. Maybe log in once a month just to have a look.

I only lent to low risk applicants when I started (which brings the lowest returns). It's changed now but you could opt to lend to the youngsters or the high risk applicants for better returns (but with a higher chance of them legging it with the loot).

00ec25

I too have been [STRIKE]lending[/STRIKE] investing with Zopa for years. They are now a very different proposition to when I started.

You invest in £10 chunks. Nowadays you have no say what rate you get, instead you have a bit of a lottery that provided you put a reasonable amount in then you will invest in enough loans that you will achieve the average rate of return which Zopa "promises". that promise has yet to be put to the test

As for defaults then under the new arrangements Zopa guarantees to repay you if the lender defaults, so in theory it is now [STRIKE]zero[/STRIKE] low risk. As a result the rate of return has dramatically fallen.

As ever it can take a good while to lend out 100 x £10, in the meantime your money earns zero.

lessons:
- do not invest lump sums, start small, say £50, and drip feed more in as it gets lent out. Keep the balance in an interest earning account that you can withdraw from easily, even 0.1% interest beats 0%

- decide if you want to lock money away for 3 or 5 years. Those are your realistic only options. The withdrawals facility ("rapid return") will cost you 1% and if you use it then you should not have invested that money in the first place as it was not 3 or 5 year unencumbered funds

- despite Zopa repositioning themselves as a bank and offering a headline interest rate it is still an investment, it is NOT a savings account. That said there is a real prospect they will get FCS protection soon, when that happens I would expect interest rates to fall further since it is now Zopa and not its investors who control the rate.

- best lesson : read as much of the Zopa forum http://talk.zopa.com as you possibly can. That is where the real Zopaholics live and you will soon understand what investing there entails and what some people do to monitor their rate of return and how their investment strategy is panning out. people who expect to drop in money and then sit back and collect a reward at then end as with a bank savings account may be Zopa's new target market but there is still some way to go before that is the sort of person who should use them - in my opinion!

as for me, after 4 years I no longer put money into Zopa as I get a better rate elsewhere in other P2P players - albeit at higher risk