Petem95

Anyone lent money on Zopa before? It's the site where individuals can lend and also borrow.

I signed up ages ago, but every time I've looked in depth at the likely returns over the lending periods offered, it just hasn't looked much better than other safe investments such as fixed-rate bonds.

With such low returns on offer for 'safe' places to invest at the moment, it's now looking tempting and I'm going to dip in £5k and see how it goes. Average returns before bad debt is apparently 8.2%. Realistically looking at lending over a 3 year period the return is probably going to be more like 6-6.5% after fees and bad debt, but still a good return.

Anyone used them, or not used them for any particular reason?!

PaulC72

if you have a baseball bat and are willing to commute you have nothing to lose.

Dingdongler

I had a quick look at this a couple of years ago and didn't go ahead. I looked through the site but could never get a definite answer on what my return would be. Also, unlike a bank Zopa is not protected by the £50k FSA thing, so if Zopa itself folded I wasn't sure what my position would be.

Let us know how you get on, I for one would reconsider it given the appalling rates elsewhere

sti-04!!

Yeah i have been using it for the past few years. I've been getting a return of roughly 6.4% on my investment.

Terminator X

iTrader: (7)

What's to stop people defaulting on the loan = you're screwed?

TX.

AndyC_772

iTrader: (2)

See post #2?

Petem95

Nothing, but the money you lend is spread to lots of different borrowers - it's not like you sign up and lend 5k to one person and hope they pay. Average bad debt rate is something like 0.7%. You get higher potential returns lending to more risky groups, so bound to get more borrowers defaulting here - guess it's finding the right balance.

I'm defo going to have a dabble. Looks like a bit of fun at the very least, and could work out providing a good return on the money too.

Best 3 year bond rate at the mo is about 4.15% so if I can get a return of 6.4% like STI-04 then it's 50% better than the bonds!