Thats it you see. All you Pussy's 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.