Petem95

Decided to start using my Zopa account a couple of months back, lending £5k initially, and I thought I'd let people know how I've got on, as I know some people on here have been thinking about having a dabble (as I was).

Easy to transfer money into Zopa - can use bank transfer (which I did), direct debit, standing order. You then decide which markets you want to lend to - ie people with which credit scores. These being A*, A, B, C, Y (young borrowers). You can also decide if you want to lend for 36 or 60 months. You can also decide what rates you want to lend at. By default they set you at the average lending rate for each market. Set higher and it takes longer to get the money lent out, set lower to lend faster.

By default you lend £10 per borrower, so that it spreads the risk. You can set this higher, but I kept it at £10.

It does take a fair while for the money you transfer in to actually get lent out. I dropped the lending rate for A* borrowers over 36 months to 0.1% less than the average to get my money lent quicker, but still only £500-£750 usually gets lent out per day (lending to all markets), so if you're going to have a go it's best to sort of drip-feed the account with a couple of grand at a time otherwise the money is sat there earning nothing.

So far I've had no bad-debts, but expect these to appear sooner or later - and people probably get into arrears nearer the end of the loan period rather than the beginning. Couple of late payers.

My average return before bad debt is currently 7.31% which is pretty good. You can get your repayments dropped back into your 'pool' to be re-lent, or transferred to a holding account.

They let you sort of the tax, but they provide a tool to auto-calculate this.

So far so good - I've slowly been transferring more money in, but there is a limit of £25k for private lenders - anything more and you need to get a credit license.

There's a referral scheme too, so if anyone is thinking of joining you can follow this link http://uk.zopa.com/member/Petem95 (not the main reason for this post, but might as well include it!)

Anyone else used this for lending or borrowing?!! How have you got on?!

dpb

My average return on the stock market has been 10% this past 6 months !

, before any bad debt






but thanks anyway

Petem95

Yeah I've seen similar returns - before dividends too, but I don't expect the next 6 months to be so rosy for the stock market! Either way, always good to spread your investments and I'm certainly going to continue using Zopa as one.

Benji554

iTrader: (18)

I'm not a fan of Zopa. Had a small fund in there for 18 months and now i'm starting to withdraw it... SLOWLY! The recent 'rapid return' option stinks! If I used that I would get back a couple of hundred pound less than I put in. I've had a bad debt too.

The headline figures look good but that is if you constantly re-invest the money you get returned. I think by the time i get my money back i would have been better off sticking it in a decent bank account.

If you can afford to put the money away for years and not touch it maybe but its not for me!

GlesgaKiss

This is the first I've even heard of it. Cheers for the review, I just had a look at the site there. Quite interesting.

Petem95

Surprising how many people haven't heard of it to be honest! Mentioned it at work and nobody had a clue about it!

what would scooby do

Question, could you just dump money in, set criteria and just let it manage itself? Of course keep an eye on things but not have too manage anything day to day?

Petem95

Yeah that's pretty much what you do - you dump in a lump sum, you set the amount you want to lend to each borrower (default is £10, so it spreads the risk), set the interest rates you want to get for each 'market' you lend to (by default you get the averages, but you can set these manually, or decide to not lend to certain markets - these being A* over 36 months, A* over 60 months and so on - based on the borrowers credit rating and loan period). The money slowly gets lent out automatically based on the rates you want to lend at. You get loads of pie charts and data on the lending when you log into your Zopa account.

You can also decide if you want to automatically re-invest the money you get 'paid' as the loans are paid back, or if you want it to go to a 'holding account' ready for you to transfer out.

They seem to have thought it all out pretty well!