Has anyone tried lending at Zopa?

The average return is meant to be around 9%, although you can set your own rates.

A nice thought and very low default rates.

Increasingly interested by this site - seems to be getting mentioned and recommended a lot.

Hm, just had a look, and it looks too easy to scam the lenders.

If there's a low default rate at present I figure that's because the system isn't being taken advantage of - but that it would be really easy to con money out of.

Banks have a screening process to help ensure debts are payable, but I'm not really seeing that occur on Zopa.

Good points Brian.

You've got to take into account that they have lent vast amounts of money out already.

Be nice to see if you could test the system.

I think i'll give it a shot on a small scale, i'll let you know how i get on - Probably just go with £2-300 or so.

Hi Guys.

I'm new here but thought you might like to know my experiences of Zopa. I'd also like to correct some comments above.

I've used them more or less since they started, as a lender, initially because I liked the idea and wanted to support it and was in a position where I could without risking much % wise.

I put in about 15K as my trust in Zopa built and my balance on that is now just short of 18K - ie nearly a 3k return on the 15k. Unfortunately without going back over the figures I can't give you annual returns to any accuracy. I can tell you that compared to other saving a/c's (and I'm a rate tart!) I am very pleased with my Zopa return - to the point that I am taking advantage of their offer to pay for a consumer credit licence which will enable me to lend more.

I lend to literally hundreds of people (Zopa do this for me - I just have to pay the money and set my rates). My bad debt is less than £50 to date. I consider this more than acceptable. I can view basic information on all these loans and bizzarely I get some pleasure from that. I like to know I've funded someones honeymoon or helped them get the car/kitchen or pay off excessive credit card balances.

On the subject of bad debt, Zopa is in my view far better than the banks. The reason for this is that industry defaults by risk category are available - Zopa publishes them - so lenders like me make allowances for this in the rates they set. As long as the bad debt rates are lower than allowed for lenders will be happy, but if they drop below published ratios then lenders like me will leave. The point is that IMHO the whole Zopa business model depends on a bad debt ratio better than the industry average. Zopa knows this which is why most loan applications to borrow are unsuccesful - you can see this as your money goes into processed then becomes available again.

This is why I'd imagine it isn't so easy to scam them as you think. Brian says he sees no evidence of any screening process There's a simple reason for that - you ain't looking! A cursory glance on how it works will show you that their screening process is more comprehensive than an automated banking one.

Anyway, I hope this helps. Other than being an investor with them I have no other association.

EssJayEff,

Thanks for the response, some valuable information there.

i lend on zopa and i am very happy thus far and it quite possible to earn 7% interest taking bad debt and fees into account