Im getting a little worried about Zopa Peer to Peer lending.

CatsCash

They have been sending out emails for ages trying to reassure investors, saying that new investments arent being taken but that matching money to investments (already in the system) is taking a lot longer.  Explanation being that they are being more careful of loan acceptance during COVID.  But it seems that the number of loans they are working with (requested and / or accepted) is rolling down a hill. 

Looking at a few emails send since last year - and pulling on random days - this is currently the wait to be re-matched whenever a part of your investment is repaid.

May 2020 - 2 days to match
August 2020 - 15 days to match
July 21 - 52 days to match
August 21 - 57 days to match

That means that any of the small increments that are repaid sit there for 3 months before being re-matched to any loans.

I currently have 10% of my investment sitting in 'holding' not being matched with anyone and this  % is growing rapidly.

Rate of return on actual investments isnt bad as they are focusing on a smaller group of loans, but once you factor in 10% doing nothing, just sitting there, and the length of time that sits there, not to mention the increase of time iits sitting there, no real answers when i contact them to ask what is being done to change them (polite answers i should add - but not saying anything that interesting) its making me rather nervous and Im looking for other options.

Alexland

Can you change the settings to withdraw the money as the little increments are repaid?

I wouldn't want money sitting in cash or invested with a P2P provider for any longer than necessary.

Nebulous2

There were some previous threads if you look. Consensus seemed to be that closing it to new money (as has now happened) would be a bad sign. At the same time It is sensible that they have tightened their underwriting. 

I have pulled most of my money out. I stopped reinvesting and withdrew the repayments once a month before the pandemic hit. About three months ago I turned reinvesting back on, and am in a position where I have more money to invest, but I don't think Zopa is it. 

They seem to be concentrating on their bank now with peer-to-peer not being very prominent. 

Aceace

I tried Zopa for a couple of years but am almost out now. I found the return to be unimpressive for what was essentially unsecured lending. Zopa claim that I have received annual returns of 4.15%, but in reality it was 3.11% once the cash drag was taken into account. I've moved these funds to Loanpad. They pay 4% on their 60 day notice account with the funds diversified over 103 loans secured against property with low LTVs, and there's no cash drag. Plenty of other P2P options if you want to move higher up the risk/reward scale. 

TUVOK

I've been withdrawing money from Zopa daily, and I was withdrawing from Ratesetter before it decided to close it's P2P.

I have about £4K in Zopa still, and I am withdrawing from my holding account daily when money is parked there.
It's a laborious way of reducing my account, but I am not sure if there is another way to reduce without occurring charges/losses etc?

Can anyone more experienced throw light on what/how I can withdraw money without any losses?

Thank you.

john95346

I've been with Zopa for years (5+?) and I agree that things seem to have changed a lot. I presume a lot of it is down the pandemic.

Zopa used to say how much they'd lent out over the last 4 weeks on their weekly emails, but that stopped by November last year (just scanned my emails - it was still in an August email). The amount they'd been lending out had tanked. From up to £100m over 4 weeks at one point, down to £43m in that August email.

Call me a cynic but I presume the reason they stopped publishing the figure is because it was getting worse.

This would also explain the longer waiting times (as would higher demand but I have no data about that).

I'm quite relaxed about the £1200 or so I have in my P2P with them but I'm certainly not going to add to it (other than reinvesting the repayments). I don't think I can add any more going by their recent emails. They have stopped new money being added by existing lenders.

Personally... I think that if they are not lending out enough money, and they have too many lenders beating a path to their door (given the waiting times mentioned above),  they should lower the interest rates to their borrowers (and hence lenders). This will give a better deal to borrowers, and reduce the demand of investors. It may well be that the lower return would not justify the risk taken by lenders/investors, but that's life and we will have to make a decision. It's a nice problem to have. I'd rather have that problem than having to borrow money.

I think that's how Zopa used to work in the early days - the lenders chose their own interest rate that they wanted to lend at. I wasn't in back then. I think there might be other P2Ps that still offer this model. But I haven't looked.

Aceace

TUVOK said:

I've been withdrawing money from Zopa daily, and I was withdrawing from Ratesetter before it decided to close it's P2P.

I have about £4K in Zopa still, and I am withdrawing from my holding account daily when money is parked there.
It's a laborious way of reducing my account, but I am not sure if there is another way to reduce without occurring charges/losses etc?

Can anyone more experienced throw light on what/how I can withdraw money without any losses?

Thank you.

There's no need to log in and remove funds daily. You can simply set a trigger amount for Zopa to automatically withdraw funds. Here's what Zopa says on the subject: 

Automatic withdrawals are the simple way for you to send money from your Zopa holding account to your bank account, without having to log in and go through the manual process. All you need to do is pick a trigger amount. For example, if you set a trigger of £500, every time your holding account reaches that level, we’ll automatically send all the money from your holding account to your bank account the following morning.
Please note, the payment could take up to three working days to reach your bank account and the amount you receive may be slightly above your trigger amount if repayments made by borrowers lift you above that threshold

john95346

I don't think I can edit my above post. So I'm just quickly adding that I re-read the August email and it stresses that they have tightened their lending criteria. That would certainly explain some of the lower lending volumes. But I still stand by my suggestion that they lower the interest rates. They would increase their market share of the borrowers whom they are prepared to lend to (and meet the demand of their lenders).

tebbins

If you don't want to sell they have an auto-withdraw option, every time £10 rolls into my holding account it gets sent to my current account.

TUVOK

Yes, I have seen that on the site.
It's no big problem to log in each day, but I may well go down the route you wrote about.

Thanks for the info.

Nebulous2

I've just had the latest email. Encouraging me to take my money out. 78 days matching time for Zopa core. They have given up on peer-to-peer and are concentrating on their own bank.