"Ethical loans" from Zopa?

Anyone here used Zopa?

They say they're a marketplace for money where borrowers get low-cost loans by borrowing directly from other people instead of banks:

Their website

"At Zopa, people who have spare money lend it directly to people who want to borrow. There are no banks in the middle, no huge overheads and no sneaky fees, meaning everyone gets better rates."

Anyone here used Zopa?

 

They say they're a marketplace for money where borrowers get low-cost loans by borrowing directly from other people instead of banks:

 

Their website

Yes I have. I lent for a couple of years and got a very good return but I took it all out and put it in NS&I certs instead. Was getting too many late payments and had a couple of loans go bad.

Anyone here used Zopa?

 

They say they're a marketplace for money where borrowers get low-cost loans by borrowing directly from other people instead of banks:

 

Their website

I've considered lending through it as an investment, but the last time I looked it was a minimum 3 year commitment, which was too long for my tastes.

I've considered lending through it as an investment, but the last time I looked it was a minimum 3 year commitment, which was too long for my tastes.

It was tied down like that to start with but then they introduced a 'rapid cash out' feature. You sell your loans to other lenders. There's a small fee for using the feature - it's how I managed to get all but about twenty quid of my money back.

I've considered lending through it as an investment, but the last time I looked it was a minimum 3 year commitment, which was too long for my tastes.

I think you can cash everything in at any point now

Yes I have. I lent for a couple of years and got a very good return but I took it all out and put it in NS&I certs instead. Was getting too many late payments and had a couple of loans go bad.

The NS&I don't give a return do they? Isn't it the same as premium bonds?

It was tied down like that to start with but then they introduced a 'rapid cash out' feature. You sell your loans to other lenders. There's a small fee for using the feature - it's how I managed to get all but about twenty quid of my money back.

I saw that recently, but if I go in knowing I only want a one year investment then the 'small' fee might render the entire thing pointless.

I'll wait until I can tie up the money for 3 years and try it then.

The NS&I don't give a return do they? Isn't it the same as premium bonds?

They pay rate of inflation + 1%

Not available at the moment though.

I saw that recently, but if I go in knowing I only want a one year investment then the 'small' fee might render the entire thing pointless.

 

I'll wait until I can tie up the money for 3 years and try it then.

Yeah you have to factor everything in. I thought I was in for the long haul but then the amount of late payments and then two loans turning bad really put me off.

You're right that if not careful (and unlucky) you could end up out of pocket.

I've got £800 of my daughters to invest in a 15 year+ investment but a financial advisor said I should wait until we have a bit more stability in the Eurozone - but that isn't looking like it's going to be any time soon

They pay rate of inflation + 1%

 

Not available at the moment though.

Yeah you have to factor everything in. I thought I was in for the long haul but then the amount of late payments and then two loans turning bad really put me off.

 

You're right that if not careful (and unlucky) you could end up out of pocket.

Your funds are spread across multiple loans though right? So a couple of loans turning bad shouldn't actually cost you a huge amount, is that correct?

What credit worthiness group were you lending to? The lower rated groups offer higher returns, but obviously have a higher risk of problems.

I use Zopa as a lender. I get a far better rate of return than I ever could from a savings account with a bank even factoring in the occasional bad debt and fees. I'd recommend it to anyone, either as a lender or a borrower.

And on the plus side you bypass the banks completely.