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

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  • TUVOK
    TUVOK Posts: 530 Forumite
    Sixth Anniversary 100 Posts Name Dropper
    One thought on their offer about using a 'trigger amount', if for example you set the 'trigger amount' at £50-00 and only small amount are accumulating to it, can Zopa take amounts from it whilst it is accumulating? 

    Hope that I have made the query clear?
    Thanks
  • Aceace
    Aceace Posts: 388 Forumite
    Sixth Anniversary 100 Posts Name Dropper
    edited 21 August 2021 at 10:16AM
    TUVOK said:
    One thought on their offer about using a 'trigger amount', if for example you set the 'trigger amount' at £50-00 and only small amount are accumulating to it, can Zopa take amounts from it whilst it is accumulating? 

    Hope that I have made the query clear?
    Thanks
    There's nothing in Zopa's current T&Cs that allows them to take cash from your holding account, and I firmly believe that they would not do this.

    They are allowed to change their T&Cs (which they call principles) , but they say that they "will make changes to the Principles that we reasonably believe will not put you at a disadvantage, or because we need to respond in a fair way to:..."

    However, there is one precedent in this area where another P2P lender (Lending Works) did do this. They changed their T&Cs to allow them to charge negative interests, which did allow them to take cash from lender's holding accounts. They justified this by saying that doing so was being fairer to the majority by sharing the losses on certain loan cohorts between all lenders in those cohorts. In my opinion the FCA should not have allowed them to do this, but my opinion counts for nothing, and the FCA are pathetically incompetent beyond belief. 
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Nebulous2 said:
    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. 
    Did they really say "we have given up on peer-to-peer and are concentrating on our own bank" in their latest email or is that something you wrote as your opinion and they didn't?
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Aceace, Zopa used to routinely take money from holding accounts to fund loans because that used to be the standard way it worked. Nothing prevents them from going back to that way of working if it seems sensible and it'd just be how Zopa works again.

    I started with Zopa back in 2008 and periods of high and low loan flow compared to investor demand are normal. Just withdraw the excess money and wait for a better balance again. It's not something to be concerned about. If you like you can use the automatic withdraw feature. If you do, there's no need to set worried low levels, just try to set it so it sends money once a month or week or hundred Pounds rather than every day so you're not wasting their resources and banking costs.

    I stopped new investing back when they first introduced the safeguard fund because I wasn't happy with rates and that approach compared to alternatives. Since then I've been withdrawing repaid loans and repaid bad debt and it's currently only the latter that I'm getting. The last time I actively lent there it was for something like 9%. So little money involved that I now check once or twice a year, for tax return more than significant money.
  • Nebulous2
    Nebulous2 Posts: 5,672 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 21 August 2021 at 10:12AM
    jamesd said:
    Nebulous2 said:
    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. 
    Did they really say "we have given up on peer-to-peer and are concentrating on our own bank" in their latest email or is that something you wrote as your opinion and they didn't?
    I have a tendency to exaggerate for effect. The last sentence is very much my opinion. What they did say was:- 

    "We continue to see very long matching queue times for investors who are reinvesting their repayments. If you’re experiencing this and would like to stop adding money to the matching queue, you can follow the steps outlined here to direct your repayments to your holding account. We’ve also launched a handy feature to make withdrawing money from your holding account easier."

    Matching time for core is given as 78 days and core plus as 65 days. 

    Looking at their website Zopa - Apply for a credit card or loan - Save or invest 

    It has very little to say about peer-to-peer, offering several different products. I think the personal loans are still peer-to-peer, are the car loans, or HP? It doesn't look like it. So yes I'm of the view that the emphasis is shifting and they are concentrating on their banking products, with peer-to-peer likely to wither. 


  • mikb
    mikb Posts: 634 Forumite
    Part of the Furniture 500 Posts Name Dropper
    Zopa are hardly going to say "Thank you for your support over the years, and helping us build our brand, but as one of our many retail customers, you are not worth the trouble any more." -- which is the general feel from the P2P companies that have survived to go "next stage".
  • poppy10_2
    poppy10_2 Posts: 6,588 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Get your money out while you can. Ratesetter pulled a similar strategy and held on to peoples money for months before returning it
    poppy10
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    That's what is required by the way the loans work when there is a demand shortage. You can't sell loans when there's n buyer for them so you can't get out faster, just wait for the supply to get to what you're selling or your normal loan interest and capital repayments. We've been here before and we'll be here again with places that work this way, it's simply normal supply and demand operation.

    Some things might prompt concern but markets operating as expected like this isn't one of them. RateSetter has had similar imbalances and delays in the past. Just business as usual.

    Zopa used to have a mechanism that could regulate supply and demand a bit on the lender side: you could set your own rates. When rates became undesirable money was withdrawn from being offered, leaving more for those willing to take the lower rates.
  • Aceace
    Aceace Posts: 388 Forumite
    Sixth Anniversary 100 Posts Name Dropper
    jamesd said:
    That's what is required by the way the loans work when there is a demand shortage. You can't sell loans when there's n buyer for them so you can't get out faster, just wait for the supply to get to what you're selling or your normal loan interest and capital repayments. We've been here before and we'll be here again with places that work this way, it's simply normal supply and demand operation.

    Some things might prompt concern but markets operating as expected like this isn't one of them. RateSetter has had similar imbalances and delays in the past. Just business as usual.

    Zopa used to have a mechanism that could regulate supply and demand a bit on the lender side: you could set your own rates. When rates became undesirable money was withdrawn from being offered, leaving more for those willing to take the lower rates.
    There's a shortage of borrowers on Zopa currently, not a shortage of lenders. It should be easy to sell any performing loans if someone wants out. 

    Why people would want in when there's over 2 months cash-drag and such poor rates for unsecured lending is beyond me. 
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    In the past there have been lender shortages; that sort of time was when I did most of my own lending, with higher rates.

    I agree about the rates and haven't done new lending there for almost ten years.
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