Zopa - interesting idea of good returns in uncertain times

[booyaka]

Zopa - Loans from people not banks

"Investors are always looking for new asset classes - especially those deemed low risk. Enter Zopa, the self-styled eBay of personal finance, which is wooing investors."

Basically a system where you can borrow money from other individuals who have put the money up for lending.

The lenders can set their own interest rates.

As someone on another forum mentioned it's like the financial equivalent of ebay!!!

Seems to be getting a lot of press from Channel 4 news BBS news and working lunch program.

Seems pretty reasonable as the risk is only £10 to an individual from what i can see. So if you put £500 up for lending of you money it will be technically lending £10 to 50 individuals, therefore spreading the risk alot more than £500 to a single individual.

Anyone used it as a lending or borrower?

 

[Dony]

I was going to start a thread but this one will do.

I'd never heard of Zopa until today. Does anyone have any experience of either borrowing or lending using this service?

 

[Insanity202]

Seems interesting. Might have a dabble with this.

 

[imightbewrong]

It's been around for ages - I've got an aincient account in there somewhere. Never used it. Risk graphs available - not sure how much you can drill in:

Graphs

 

[Naaktgeboren]

I have been lending on Zopa for a couple of years now, I currently have 60 odd loans outstanding, ranging from £10 to £1k. For the higher loans I tend to stick to the A & A* rated borrowers, I do lend to B rated borrowers but have had some bad experiences lately which may mean I will soon review my position. As the B rated loans are smaller, you get a higher chance of people repaying the loan in full which is not good news.

Its not easy money in any sense of the word, it can be a lot of hassle for very little reward (even the A* rated borrowers can turn bad)

Would I recommend it?? well... this time last year I had approx 100 loans outstanding and will probably see this 60 out then give it a rest. Interest rates are getting lower and lower and it only takes a few bads to make it very frustrating.