Zopa - "financial equivalent of eBay"

Mat

Mat

Mat

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Joined
18 Oct 2002
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Has anyone on here ever heard of or used Zopa?

http://www.zopa.com/ZopaWeb/

http://www.zopa.com/zopaweb/public/help/help-faqs-about-zopa.html

Basically its a completely legit and regulated money lending/borrowing site whereby you can put up some of your money (£100 - £25,000) for other members to borrow and pay back at an interest rate that you choose.

I heard about it on Radio 2 last night and thought it sounded pretty interesting as its an alternative to banks. I thought I might put up a bit and see how it goes but was just curious if anyone else had heard of it??
 
I don't understand how individuals can offer better rates than they could get in a savings account. I am getting 5.25% on my cash ISA for example. You can borrow money from banks for not much more than that.
 
Their rates are attrocious though ?

I looked up £10,000 which was 7.9% and I can get this from a bank for 5.9%.

Might be better to lend money out rather than borrow ?
 
WIBSBOT said:
But then no one would borrow your money, unless they are desparate. Note to self - don't ever lend money to desparate people.
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I presume, as its been going since '05 and the fact that they have over 100,000 members in the UK (as per radio interview), that there are people out there who would. I dont know, I'm just trying to guage peoples thoughts/experiences.
 
Surely people who will pay over the odds to borrow money are those who are a greater risk of defaulting, and thus the last people you would want to lend to.

I'm amazed this is as successful as it is. Then again, considering people's greed and stupidity, maybe it isn't so surprising.
 
yeah say i borrow 10k of someone and then say sorry i have a betting problem and lost the lot, i offer you £5 a week cos i'm skint...... then what happens :p
 
dirtydog said:
I don't understand how individuals can offer better rates than they could get in a savings account. I am getting 5.25% on my cash ISA for example. You can borrow money from banks for not much more than that.
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Not everyone can though - if your credit rating is screwed due to bankruptcy/IVA then schemes like this might be your only option, and the higher interest rates reflect the higher risk that the lender takes on....
 
Visage said:
Not everyone can though - if your credit rating is screwed due to bankruptcy/IVA then schemes like this might be your only option, and the higher interest rates reflect the higher risk that the lender takes on....
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True but would you want to lend to such a person? :)
 
dirtydog said:
True but would you want to lend to such a person? :)
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Absolutely, on the condition that the interest rate was high enough that the losses due to people defaulting were less than the profits made on the loans that are paid back.

Clearly this requires some level of statistical analysis of the lielihood of a given loan becoming bad debt, as well as having the funds to make enough loans to realise a high enough level of succesful repayment.

Its not dissimilar to insurance in that regartd - the high number of policies that dont have claims pay for the policies that do.
 
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