MrB

Zopa

57 posts in this topic

Have about £2000 with them over a year. Returns 5.5% after bad debt (1 loan of £29 lost)

Did think of slinging £2k Zopa's way. How do run it Hippy? Lots of small £30 loans?

There have been threads on this before. Can't find them now though.

Edited by TheReturnofRover2000

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Threads are in this sub forum

Thanks doccyboy

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Did think of slinging £2k Zopa's way. How do run it Hippy? Lots of small £30 loans?

There have been threads on this before. Can't find them now though.

I am currently lending to 125 people sums between £10 and £30 with a mixture of A+, A, B and C over 3 and 5 years.

My feeling is it is good for borrowers compared to the banks but the extended tie in is a pain for lenders - I'm slowly removing my money but that will take almost 5 years. It would really help if you could sell on your loans when you need your money back. As it is you get it back in penny packets. The lack of ISA wrapper is also a loat opportunity.

The borrowers get to pay off the loan whenever they want i.e. the best customers leave early and reduce the returns. The one borrower who defaulted had a rating of A. In addition I have another borrower who has a very poor record of paying on time with a credit rating of A+ so I am also concerned that bad debt could wipe out returns

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Isn't zopa a whole lot more trouble than it's worth?

You're all talking of small amounts. £1k at 8% is £80/year, which is surely not worth more than a one-off form-filling exercise. Anyone in there for noticeable money - say £1k income in a year? How much time and effort (not to mention sleepless nights over repayment) do you put in for your returns?

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Isn't zopa a whole lot more trouble than it's worth?

You're all talking of small amounts. £1k at 8% is £80/year, which is surely not worth more than a one-off form-filling exercise. Anyone in there for noticeable money - say £1k income in a year? How much time and effort (not to mention sleepless nights over repayment) do you put in for your returns?

Not really - I certainly dont lose any sleep over the occasional default on a £10 laon. Overall my return is in the region of 7%. Once you have set up your loan book - you can switch to auto lend which simply recycles payments back in. Alternatively let them fill up a holding account.

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I've been getting back into lending on Zopa as well - I've noticed that if I leave spare cash lying around in my account there it gradually gets lent out at something like 9.5%. It's better than leaving it in my current account or ISA getting 0.1% or something.

I've not had any defaults on Zopa but I have two late loans which is unfortunate. Maybe I'll get something back for them eventually.

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I put 100 quid in zopa last august/september just to test it out.

At the moment (well 7/4/2010) I am 5.39 up. After the full year is up I will be pushing 8%.

I only lend to A*/As and have no bad debt (out of 11 loans).

My plan now is to stick in an extra 250/300 quid a month (lot for me! - 25k p/a) and wait for the first bad debt.

As someone with little savings and no need to buy a house in the next few years it is perfect for me. The best ISA is around 4.5% and i'm sure this is a teaser rate - will be 1.5% next year. Can't be arsed with all the pessing around. ZOPA seems a good way to invest as it cuts out the c unty middleman.

I tend to lend in the ZOPA - ie. I dont have any great strategies. Just a simple man trying save his money effectively. Any help greatly appreciated.

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I put 100 quid in zopa last august/september just to test it out.

At the moment (well 7/4/2010) I am 5.39 up. After the full year is up I will be pushing 8%.

I only lend to A*/As and have no bad debt (out of 11 loans).

My plan now is to stick in an extra 250/300 quid a month (lot for me! - 25k p/a) and wait for the first bad debt.

As someone with little savings and no need to buy a house in the next few years it is perfect for me. The best ISA is around 4.5% and i'm sure this is a teaser rate - will be 1.5% next year. Can't be arsed with all the pessing around. ZOPA seems a good way to invest as it cuts out the c unty middleman.

I tend to lend in the ZOPA - ie. I dont have any great strategies. Just a simple man trying save his money effectively. Any help greatly appreciated.

trickle money in rather than in lumps. When you put a large lump in there is the temptation to drop your rates to get it lent out quickly. I did this with £3K and had to discount heavily to get it lent out. Still rate far exceeded poxy rate in the BS.

If you plan to put £300 a month in it would be better to set up a standing order to put £70 a week in.

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trickle money in rather than in lumps. When you put a large lump in there is the temptation to drop your rates to get it lent out quickly. I did this with £3K and had to discount heavily to get it lent out. Still rate far exceeded poxy rate in the BS.

If you plan to put £300 a month in it would be better to set up a standing order to put £70 a week in.

how is this intrinsically different from investing in, say, a corporate bond index - it is surely still more or less lending directly but with diversification between borrowers?

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I am scared of corporate bonds becuase i don't understand them.

I feel safe at ZOPA as i have done my 8 month test and not been burnt. I will now increase my holding 70 quid per week (thanks Kurt) and wait til i get burnt. Then have a rethink if necessary.

Oh, also just found a fun new hobby. On Zopa listing there are a lot of no hopers and p iss takers hoping to get loans at lower than reality rates. These are usually the people who have been rejected by the ZOPA market or are unhappy with the rate offered. So they go on the listings and take the mick. Not all of them, but there are di kh eads on there...

Anyway, you get to ask them questions about their finances which is kinda fun as you know most of them are chancers. They can respond or not, but all the responses are published underneath their begging notice.

Fun for all the people who believe that irresponsible debtors have ruined their saving rates.

Edited by billbill81

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I am scared of corporate bonds becuase i don't understand them.

You're lending to a big company. It's one of the safest forms of investment if you pick a good company (though you can get higher returns with a more troubled company).

I feel safe at ZOPA as i have done my 8 month test and not been burnt.

That's the most dangerous attitude you could possibly have. By all means put more money in, but not more than you can afford to lose.

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how is this intrinsically different from investing in, say, a corporate bond index - it is surely still more or less lending directly but with diversification between borrowers?

Similar as DJIA says.

With CB's of course you can trade them whereas I don't believe there is any mechanism to sell your loan book on. Any money invested today will be paid back over 3 and 5 years depending on how you lent it out.

I am lending alot out on 60 month loans as rates much higher on these than 36 month.

I current have £5K in and am sticking amother couple of hundred in each month.

Edited by Kurt Barlow

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Similar as DJIA says.

With CB's of course you can trade them whereas I don't believe there is any mechanism to sell your loan book on. Any money invested today will be paid back over 3 and 5 years depending on how you lent it out.

I am lending alot out on 60 month loans as rates much higher on these than 36 month.

I current have £5K in and am sticking amother couple of hundred in each month.

Current spread is;

78% in A ratings

12% B ratings

10% in C,Y and listings

Approx 70% on 36 month loans and 30% on 60 month.

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Thats it you see. All you Pussy's :P who stick to A* & A markets only are driving rates through the floor. Better money is to be had in higher risk markets - just spread risk and adjust interest to account for this.

I tend to agree. However, ZOPA is my only investment as I simply do not have enough money to diversify.

I feel obliged to offer at lower rates to A and A* borrowers to get my money lent out. If I offer 8 or 9% I am still beating the w a nk er banks and ISAs. I have yet to pick up any bad debts which is good because they would undermine my strategy ATM.

I am looking at swooping on some of the listings. Particularly ones asking for £10K that have difficulty getting covered. There is a serious lender called Supply who enters last minute and offers a grand or two at the highest rate.

If the borrower tells you he wants to consolidate and gives you a list of his present credit card debts (18,19,25% for instance) and you can get in on the auction at 17.5% he will still accept. If the same borrower has a 3 star credit rating on listings then you are beating the B and C markets by 3,4,5%.

This is one tactic I am looking to exploit in the future, however I will be obliged to continue offering 8ish% to A*s and under 9% to As. When the total money available drops to £1 million I see action at these rates. £1.5 million total on offer = no action.

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If the borrower tells you he wants to consolidate and gives you a list of his present credit card debts (18,19,25% for instance) and you can get in on the auction at 17.5% he will still accept. If the same borrower has a 3 star credit rating on listings then you are beating the B and C markets by 3,4,5%.

That sounds high-risk! The spendthrift with all that creditcard debt shifts it onto you before re-maxing the cards. And with that great record of taking on and paying off debt, the lenders are falling over themselves to lend him/her more on new cards, etc.

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I tend to agree. However, ZOPA is my only investment as I simply do not have enough money to diversify.

I feel obliged to offer at lower rates to A and A* borrowers to get my money lent out. If I offer 8 or 9% I am still beating the w a nk er banks and ISAs. I have yet to pick up any bad debts which is good because they would undermine my strategy ATM.

I am looking at swooping on some of the listings. Particularly ones asking for £10K that have difficulty getting covered. There is a serious lender called Supply who enters last minute and offers a grand or two at the highest rate.

If the borrower tells you he wants to consolidate and gives you a list of his present credit card debts (18,19,25% for instance) and you can get in on the auction at 17.5% he will still accept. If the same borrower has a 3 star credit rating on listings then you are beating the B and C markets by 3,4,5%.

This is one tactic I am looking to exploit in the future, however I will be obliged to continue offering 8ish% to A*s and under 9% to As. When the total money available drops to £1 million I see action at these rates. £1.5 million total on offer = no action.

A good tactic is to offer money over weekends, which means holding onto it until saturday rather than lending out. I normally have £100-£200 going in every friday.

I aim on all markets to lend at a minimum return of 6.1% after anticpated bad debt. At present I am finding I am getting good returns particularly in 60 month B,C & Y markets. Often A36 and b36 yields are below 6.1%

I lend a bit in listings too - slectively and at rates normally exceeding 10%

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I have £4,000 invested with Zopa. Return last year was 6.4% including bad debt.

A pretty good return when you compare it to bank bonds.

I am finding rates in 60 month markets to be far better than 36 month. Anticpation of inflation ahead perhaps?

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I have heard the Govt have lifted the limit of £25K for registration with a CCA Licence. Anyone know anything about this?

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I have £4500 lent out, with at an average rate of 9.5% , with just 1 bad debt so far (£20 @ 13%)

With NS&I pulling all their good rates, looks like I'm going to have to put more into Zopa, which is annoying since there are no guarantees of getting your money back.

Edited by exiges

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I have £4500 lent out, with at an average rate of 9.5% , with just 1 bad debt so far (£20 @ 13%)

With NS&I pulling all their good rates, looks like I'm going to have to put more into Zopa, which is annoying since there are no guarantees of getting your money back.

due to the demise of nsi inflation linked certs , going to drip feed say £125 a week like kurt advised.

any advice that hasnt been covered in this thread?

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due to the demise of nsi inflation linked certs , going to drip feed say £125 a week like kurt advised.

any advice that hasnt been covered in this thread?

Late payments seem to be on the rise. Might just be down to the holiday season but you never know.....

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Late payments seem to be on the rise. Might just be down to the holiday season but you never know.....

Bump

How are other ZOPA investors finding it lately?

I have a managable number of late payers (less than 1%) in arrears but appear to be making reasonable attempts at paying the interest and some capital back. Ironically all A&B ratings

Currently have about £10K invested. 89% in A & B ratings. 11% in listings, C &Y

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