The Anonymous Widower

Zopa as a Lender

I have been asked by several of my friends how I feel about Zopa, and how do you get started.

I should say that I would never tell anybody to use the site, before they have researched it in full.  There are many excellent articles by respected financial journalists on the Internet.  Some have told me that they have even invested themselves.

I only invest what I can afford to lose on Zopa. Most of my intial investment actually came from the sale of my late wife’s Porsche Boxster and the site has certainly performed better than that car would have.  I used to love my two 911’s but a Boxster is like a fat pig compared to the gazelle of my Lotus Elan.

I started with small amounts of under a £1,000 and made sure I got the workings of the site under control, before I upped my levels to what they are now.  You must do this, as you need to do the following.

• Check rates every morning, so that you are tracking the rates in the way you want.
• Check returned money every night, so that you make sure you are offering money for lending and it’s not sitting in your holding account.
• Make sure you understand the rules on how money is lent.  For instance, note how lending offers inter-relate and that you can lend from two offers to the same person.

Did I make any mistakes?

Yes!

As I said in an earlier post, I set my limits too high at first and ended up with a bad debt of £200.  I now have a maximum limit set at a thousandth of my total money, but that is probably a bit low.  Somewhere between £50 and £80 would be a safe limit for most people.  But this would be too high if you were only lending a total of say £2,000.

I am trying to get my average lending per lender down to under £50.

I would also make sure that you construct your lending offers, so that you can’t lend from two offers to the same person.  I didn’t do this at first and I ended up lending far too much to some individuals.  So now, I have one lending offer to A* and A rated borrowers and another for Youth.  The two lending offers can’t lend money to the same borrower.

But as with anything to do with money, be careful.  I would have used prudent, but Gordon Brown has long since proved that his definition of that word, is not the same as mine.

July 9, 2009 - Posted by AnonW | Business, Finance | Banks, Gordon Brown, Lotus Elan, Zopa