Zopa Loans

sharding85

Hello,

I am looking at getting a loan from Zopa the peer to peer loan company. I was wondering whether anyone has used them or has any advice about them or peer to peer companies?

Thanks

[Deleted User]

The main advice is that you will need a very good credit history to be accepted.

Apples2

Just like the banks, they expect all the repayments to be made on time so if a bank has already rejected you, Zopa most likely will too.

sharding85

Hi,

I haven't applied at a bank etc yet. I searched on loan comparison and they came up with the best offer so far.

Apples2

If your credit file is good then go for it.

I have been lending on there for nearly 4 years and haven't had any bad payers (yet) which again suggests they only take on those with low risk.

27col

I've been lending on Zopa for several years and have had 2 or 3. Defaults. But not many considering the number of loans that I currently have on my loan book. If you get a loan, bear in mind that it is the money of people like myself and Apples2 that you are borrowing. We do not take kindly to people not repaying our hard earned cash.
Luckily defaults are few because of Zopa's strict lending criteria, and long may it continue that way.

ElkyElky

Apples2 wrote: »

If your credit file is good then go for it.

I have been lending on there for nearly 4 years and haven't had any bad payers (yet) which again suggests they only take on those with low risk.

What's the returns like?

I've been considering using some of my savings for this purpose. Do you loose the money completely if they default?

AmTheMan87

I have used zopa for a loan earlier this year and was offered a better rate than I had from my bank. (Also had a small loan with them a few years ago but paid that off after 6 months).


They do a soft search on your initial request and will tell you if you do not meet their criteria or a likely apr - IF you meet the criteria once the full credit search has been done.


Why not enter your details into the moneysupermarket smart search for loans, quick soft search to see what you may be suited for and take it from there?

Apples2

ElkyElky wrote: »

What's the returns like?

I've been considering using some of my savings for this purpose. Do you loose the money completely if they default?

It used to be much simpler to see than it is now.
You used to choose the rate you wanted to lend at, the higher the rate, the higher the return but the higher risk of default.
The lower the rate, the lower the return but less risk.

Your money is not protected by the FSCS so there is always an inherent risk so I would never put all my savings into it.

In the early days I used to monitor my money but now it simply goes round in circles, as I get repaid the loan money (& interest), it goes straight back out to be lent again to someone else.
You only lend small chunks, about £10 to each borrower so one default loses you no more £10, not the whole lot.

If there is a default, Zopa do all the work chasing right through to CCJ if necessary but the costs of the chasing are funded by the exposed lenders so you might not get all £10 back.

The rates are set by Zopa so there are many loans at different rates (Zopa take 1%)

I hardly ever look at it now, it just sits within Zopa going round and round.

Some borrowers put kind messages of thanks to the lenders which you can see in your loan book which puts a nice edge to it.

I wouldn't call it a get rich quick scheme but it is different and a higher return than you get from an instant access savings account, although I have never made a withdrawal.

cannycat

I borrowed some money from Zopa three or four years ago to buy a car and it was a very hassle free process - the rate was much cheaper than my bank of over 25 years would give me despite my having been a very good customer. I also really liked the fact that you could overpay, so a loan which, with a bank, would have dragged on over 3 to 5 years at a ludicrous interest rate could be paid off in a year. If you have a decent credit rating, go for it.

ElkyElky

Apples2 wrote: »

It used to be much simpler to see than it is now.
You used to choose the rate you wanted to lend at, the higher the rate, the higher the return but the higher risk of default.
The lower the rate, the lower the return but less risk.

Your money is not protected by the FSCS so there is always an inherent risk so I would never put all my savings into it.

In the early days I used to monitor my money but now it simply goes round in circles, as I get repaid the loan money (& interest), it goes straight back out to be lent again to someone else.
You only lend small chunks, about £10 to each borrower so one default loses you no more £10, not the whole lot.

If there is a default, Zopa do all the work chasing right through to CCJ if necessary but the costs of the chasing are funded by the exposed lenders so you might not get all £10 back.

The rates are set by Zopa so there are many loans at different rates (Zopa take 1%)

I hardly ever look at it now, it just sits within Zopa going round and round.

Some borrowers put kind messages of thanks to the lenders which you can see in your loan book which puts a nice edge to it.

I wouldn't call it a get rich quick scheme but it is different and a higher return than you get from an instant access savings account, although I have never made a withdrawal.

Interesting, thanks for that. I've just signed up. I definitely don't put all my eggs in one basket, I have some savings and investments staggered across various products so certainly wouldn't put everything in to it.

Though I've never tried P2P lending before so I've been considering it.

It seems somewhat unfair they take 1% from the lenders though? As without the lenders, they'd have no business and make no money? Presumably they take a cut of the interest the borrower pays.