Zopa Lending

Been with zopa for 3 years and have nothing but praise. I have just one bad debt out of the 50 odd micro loans I have made and am suprised at how the money has grown. I am a long term investor wanting money for my retirement but feel more secure here than the stock market and more rewarded here than any savings account I have found. Maybe I am just lucky to have avoided bad debt but I do sense more people moan when they are unlucky to have a few bad debtore than praise the site when they do well. It's all a gamble in the end but this is my prefered choice.

I ask for rates of between 7.9% and 12.7%, these are high for the market, but i'm only lending out my returns, so i'm in no rush and it all gets lent out within a few weeks, from 351 loans i have had 2 bad debts, and currently 4 late payments, if zopa's estimates are correct i should receive around 7% after fees and bad debt, i get around the same returns from poor risk high rate loans as i do from low rate A* borrowers, i didn't find it confusing, and can't see myself loosing money or hitting 60% bad bebt rates as some have reported, It works well for me, I'm not overstating anything as its probably better for me if you don't lend on zopa, the less money available, the higher the rates i can charge. you lend your money, you take your chance. if you want you can stick all your money in a 5 year bond and your guaranteed less than 5%, i think i'l beat that on zopa.

Zopa create the image that they are some kind of social lending network. They are not. Zopa make their fee on the loan the "member" makes. Then a percentage of the loan. Zopa's "social lending" persona, played briliatntly in the media, disguises the fact that they have many "lenders" who make very poor returns. Many make negative returns, but Zopa never do - they have their lending "fee", plus a percentage of any profit the loans make. Zopa have many foolish lenders, who act like brainless sheep.

1 stars (put your rating here! 1-5 stars) I initially liked this idea but with six defaults out of forty microloans will now lose over 20% of my cash taking into account the interest earned. Here is how it worked for me, I initially lent out £200 in 20 parcels of $10.00, two of them quite quickly defaulted (10% in first six months) so now the other 18 have to return 10% for me to just break even. To make it worse, before this I added a further £200 but in the three years I've been with them the defaults have now hit six. Zopa take there lending fee at the beginning then the risk is all yours, once a few payments are missed they sell of the loan to a recovery company and you lose the balance of the microloan at that point, you have no say in this they just give up and move on. I also have to wait until the last loan is repaid before I can exit which is about two more years, they do have facility to sell on loans but its based on lowest bid so favours the buyer of the loan and would pr... Read more

My aim in lending with Zopa was simply to charge less than the high street banks for loans while earning more interest than they pay on a savings account - not a difficult task given the huge gap. I've been lending for 3 years and earn on average 7.22%.

Been lending for maybe 4 years now and no complaints whatsoever. It's a great service supported by a well designed website. After adding the ability to sell on a loan book, I increased my lending quite a bit as there is now this much needed flexibility. I look forward to ZOPA floating on AIM so that I can buy some shares in what is probably a business of the future.

I think it's a really good idea but it's hard to find out how it works - as a lender, you seem to be able to put money in easily but it's much harder to take it out. With a bank you can choose if you're investing in a "no notice" account, 90 day notice, 3 year bond etc but Zopa doesn't seem to have anything like that. I've emailed to try and find out more but never got a reply - this doesn't help to give a feeling of confidence. I'd really like it to work and to feel I could trust them but at the moment I don't.

Great returns , beats any ISA or savings account: and safer and easier than trying to invest by yourself in loans or stocks. I don't have a lot in ZOPA; but it is returning well and I am now putting all my spare cash there rather than savings. (anything to beat the big Banks!) Even better now that they have introduced the system whereby you can get out early if you need to. Thats a good safety net if the unforeseen happens. I have only had 2 instances of late payment or problems: one was money obtained using ID theft: Zopa caught this and solved it very quickly and I did not lose my money (only £10 anyway!) A couple of late payers, but the ZOPA system solved those quickly too. So very safe, and due to the ability to choose your level of risk, and spread your loans, the risk is very much reduced. Ideal for the "amateur investor". And I get a good feeling that I am helping others by making my money available as a social lender. I am hardly Donald Trump or a Rothschild, but I hav... Read more

Lending via Zopa for about two years now , Very few bad debts - a matter of less than 1 % of my investment. Interest rate better than Bank or building society Good place for a small investment Easy to use

I've been lending through Zopa for 2 years now and I think its brilliant. Not only do you get much better returns, you also get an opportunity to help other people access cheaper loans - which in turn can have a big impact on their lives. Cutting out the middle man is great!!!

I have lent money fon Zopa for at least three years and have found the both the returns and liquidity to be poor. Most of my gains were either wiped out by tax or bad debt and last year I actually made a loss! I tried to liquidate my account but loans that have previously experienced repayment issues cannot be sold on so I am left with 1/3 of my cash still lent out waiting for the loans to wind down which will take several years. Unless the liquidity and tax treatment changes I would not recommend social lending. The cards are stacked against you.

In recent times I have averaged almost 8% return, this is way better than any other investment I have made (stocks, Cash ISA, bonds). Your money is tied up for the duration of the loan, but this is made clear at the outset. I think this is wonderful, and the icing on the cake, it means avoiding the rip-off banks! It comes with risks as always, but these do seem to be minimal. I have only lost £8 having offered around £7k. You get to set the rates, the duration of the loan and the markets you lend to. In short you have control. You also decide whether to lend as part of a business or for personal reasons. Love it.

Zopa peer-to-peer lending is has huge flexibility and the potential for great returns on your lending, better than any rates offered at the banks and the moment, which you will also be bypassing. Zopa is an idea way to diversify your investment portfolio and of course there is risk everywhere, it is a matter of how you will profit from it. Even on deposit accounts at your bank you run the risk of sub-inflation interest rates eatting away at your savings and Zopa is no excluded to some risk. I was a bit weary at first about Zopa, so I read up on the articles about Zopa and I am pleased that I took the plunge! I would have liked to discovered Zopa much sooner than I did!

I've been a lender for coming up for a year now. I've started in a small way with £5K, expecting there to be catches in the way of bad debt etc... So far, though, I am impressed. The credit checks DO seem to be thorough, judging by the zero bad debt (touch wood) that I and many other reviewers report. The fact that the risk of bad debt is spread by lending very small parcels of money to a wide basket of borrowers (sorry, borrowers, if basket is not the right term!) reassures me on that score. I wouldn't recommend putting all your eggs in the Zopa basket. I suppose a crash of the capitalist system will leave us with egg all over our faces but then again I don't see why Zopa should be any more risky than other places to put some of your money in such circumstances. Zopa's website is human, informative and interesting. They do not bombard you with marketing. So as long as interest rates are so dire, I reckon I'll put another small amount up as this loan book comes to maturity. IMHO it's... Read more

Should I now tell my wife ? Just a year ago I started lending through Zopa. At the time I mentioned to my wife that the scheme looked interesting but that's all. Now I am sitting on a little pot that is growing day by day and as yet, touch wood, I have not experienced a bad debt. Every time I check my account the first thing I look at is the "bad debt - late payer" column half expecting that I will see a note entered about a borrower's payment being overdue. My wife moved ISA money from one bank to another in April because of the pitifully low rate of interest being earned but still the rate she obtained is less than half that which my Zopa account is producing net of tax. My wife is ultra cautious and If I tell her that I, and thousands of others, are getting a far better rate of interest than that offered by the banks, I think her first though will be along the lines, " If it seems too good to be true, it probably is" I haven't read the rules, but it is possible that if I introduc... Read more

Just joined up, so no experience yet and am basing my rating purely on the idea. Anything to beat the fat cats is good by me. One star lost as 3 years is a long time to tie up your money. Therefore I can't test this out for a year as I would like. I would be tempted to loan out a lot more cash if a year was the minimum term. Reading the other reviews this seems a popular suggestion.

I am very happy with my Zopa account, I have been with them for over 5 years and I am very pleased with with my returns - last month (Dec) I received £844 in interest - the rate fluctuates from 7% - 8.2% on any given day depending on which markets I have lent money to. I feel safer leaving my money with Zopa than a Bank, because it is lent out to thousands of different borrowers at any one time, thereby reducing any risk. I am using it as a pension pot - one in which I can take an income every month if I choose or alternatively cash it in if I ever feel the need. Its far more versatile than any pension and there are no fat cats or Bankers bonuses to pay for. If my pot is big enough, I can retire whenever I like, rather than waiting an extra 6 years or so for the pittance paid by the government. Having the account has enabled me to give up my day job in a Bank and start my own business. I now have more time on my hands to grow my business, make sound investment choices and the ... Read more

imo anyone using traditiaonal personal lending/borrowing from banks is effectively paying not to use zopa. laziness and inertia are the only motivations and poor excuses not to be using democratic credit. Zopa: as it should be (pay me for that later) Zopa mortgages anyone?

I was initially attracted to Zopa by the line about cutting out the middleman - in this case the banks. There is nothing good to say about banks at present, they are not serving the needs of the economy, the state or the individual. We have allowed "money" to become the master rather than the servant, and we are all enslaved by it - including governments. So any initiative which seeks to bypass the current structure and facilitiate the hygienic allocation of surplus funds to meet genuine needs deserves support. Yes, once the funds are lent out they become less accessible - but no more than a fixed-term bond paying an equivalent level of interest; yes, there is the prospect of bad debts, but the large spread of borrowers reduces the risk significantly. And yes, there is a limit beyond which it becomes commercial. But having said all that, this is an innovative idea, a form of micro-finance if you like, where my few hundred pounds joins up with some others and is parceled out in safe ma... Read more

As a lender its great, as echoed also on this site the minimum investment time is almst 3 yrs the ability to be able to sell on your loan bok to another lender would be very useful. I would then invest a lot more money at zopa knowing I could sell some of the debts onto others and get my money out if it is needed reasonably quickly. Other then that gripe (which I understadn Zopa are considering addressing) then it would be 5 starts for me. Had a small amount of bad debt but nothing too considerable, mind you I restrict my lending to the lower risk markets only.

It's a great idea, and in my experience you get a very good level of service, and that's why I want to give them 5 stars. But there are a few issues on the practical side, so it's got to be a 4. The big one is not being able to get your money back. If you turn on automatic re-lend it becomes a high interest account with a 3 year withdrawal notice. That's a long time. I realise that in part this is the nature of lending, but unlike banks, individuals don't get credit on the basis of their loan books. That money really is out of reach until it is repaid. While it is still a pretty sound investment, the tough economic conditions have seen a big increase in bad debt. I saw none whatsoever for years, and all of a sudden it is really eating into the profit. It is no worse than I expected it to be, but it does dent the forecasted earnings considerably. That said, it's a good thing it was so low for so long, which I think in part is testament to the level of good feeling generated by the com... Read more

You are not limited to £25,000 any more. But if you go over £25,000 you have to declare that you are not lending as a business or on a commercial basis. Ultimately this is an issue between you and HMRC. If it is commercial I believe you need a licence costing about £400. One thing to note is that it may take some days/weeks to lend out the money you put in and you should take this into account in figuring out your overall interest you are earning. Echo what another lender said in that it would be good to be able to get back money from holding account automatically.

It's good for borrowers and lenders. Won't suit really really short term borrowers - usual "official" minimum is 3 years but it can be a good deal for anything over about one year because there's no penalty for early payoffs. Lenders get much better interest rates than any savings account will pay right now. And because loans are repaid as capital+interest every month, if rates do shift you can respond to that shift much more quickly than with, say, a building society bond - money is not tied up to quite the same extent. Yes, there is a risk of bad debt but you can choose whether to lend only to low risk borrowers or both low and medium risk (really high risk D-E borrowers are not allowed).

So far so good, a couple of bad debts but because of the way it is set-up not really a large amount. I understand you are limited to putting £25,000 in the loan account which is a pity.

You can get good interest rates, but need to watch Bad Depts. Great for borrowers - no penality if they pay off early. But lending is only a long term investment, no quick withdrawal. I would like an option on Transfer Money out to transfer everything automatically every week (if over a minimum, of say £10). Saves having to logon every week and manually do the transfer.