The Reliability of Zopa
Every morning I check the status of my Zopa and normal bank accounts.
Zopa was fine today, but my bank account was inaccessible for routine maintenance from midnight yesterday until eight this morning.
It got me thinking that I don’t think in the over four years, I have used Zopa, I’ve never not been able to access the system.
To be fair though, I have hit a couple of bugs in the past, which have resulted in say the system hanging until I have logged back in, but I certainly haven’t had a problem in the last couple of years, when my use of the system has been heaviest.
So if you worry about Zopa’s reliability, I’d say it’s probably up there with the best financial institutions.
On the related subject of fraud on Zopa, I found this article on the web. The writer makes a lot of sound points.
Hedge Funds Won’t Take Haircut
An eminent Oxford Academic, has just said on the BBC that hedge-funds hold 4.4% of Greek debt, which they bought late and they won’t be taking any haircut.
Does this mean that Greece is back on the slippery slope to bankruptcy?
Is Now The Time To Invest In Zopa?
I ask the question as I was at Zopa‘s seventh birthday party and some of their people said, they needed more lenders.
If that had been said by many, you’d have smelt a rat, but I have been feeling for some time, that the value of loans wanted has been growing in size compared to the amount of money on offer.
So I have just been looking at the figures in my Excel spreadsheet that I use to track the company. In January 2011, the ratio of money offered across all markets to that demanded was 4.74. In February 2001, the ratio was 2.78. By comparison in January and February this year the two figures are 1.79 and 1.35. So the amount of money on offer has dropped with respect to demand over the last twelve months.
The drop is totally due to the rise in demand. The average demand in January 2012 was £12.19m, as against to £5.46m twelve months ago. This is a rise of 123%, whereas the money on offer has actually fallen. This could be for any number of reasons, but my guess is that because of the recession, more people are withdrawing repayments and interest, rather than reinvesting them.
So it would appear that Zopa has a bit of a funding gap for new loans.
Also. on the positive side the interest rates returned to lenders have also stood up well and if you take the A* market, this has hovered around the 7% mark since January 2011.
What is interesting and might frighten some investors is that there are occasional monthly fluctuations in the figures. For instance in November and December 2011, rates dropped, but had bounced back by the turn of the year. This probably explained by a slight lack of demand and an increase in money offered. Could savvy investors be putting their Christmas bonus in a safe place?
If I look at my bad debts over the last year, they have gone up by about £80 and 10 contracts. As I limit my exposure on any contract to £50, it is unlikely I’ll get any big hits of a hundred or so, I got in the early days.
So what are the rules for investing?
- Start slow, with investing something you could totally afford to use. I recommend a hundred pounds or so, until you have fully learned how to use the system.
- Concentrate on the two most creditworthy markets; A* and A. The rates you will get aren’t as high as in other markets, but they are less risky. I have a small proportion of my money in the Y or youth market, where 5 contracts have gone bad. But then 6 have in the A market, although these are obviously out of a lot more contracts.
- Set a maximum lending limit for each customer of £50.
- Check your account daily to make sure that the rates you are offering are in the zone or the Zone of Probable Agreement as Zopa calls it. If your rate is too high, no-one will borrow from you and if it’s too low, you might get less creditworthy customers.
- Join the forums on the site, to learn how others think and act.
- Only when you are happy with the system and can trust yourself, do you add larger sums of money to your lending pot!
If You Have a Good Credit Rating, Why You Should Borrow From Zopa
I trawl the web for Zopa-related articles and found this one; entitled Nearly half of Zopa loans repaid early – all free of any penalties. Here’s an extract.
Online peer-to-peer lender Zopa today confirms that since it launched in 2005, more than 45% of the loans due to be repaid so far have been repaid early and all without the borrower paying any kind of additional fees or charges.
This is in stark contrast to the banks, as not one offers a personal loan without additional early repayment charges – often of one or two month’s additional interest.
It also goes on to quote extensively from the CEO of Zopa.
In almost all circumstances, it makes good financial sense to pay off your debts as quickly as you can, including any personal loans. But banks stand in the way of this by including early repayment penalties in their loans which put people off from doing the right thing. We think that is fundamentally wrong.
So it would seem if you have a good credit rating, Zopa will give you a loan and you feel you might be able to pay the loan off early, then Zopa is one of the best plsces to borrow the money.
But just as they will check you out, then you should do that too! The easiest way is to sign up and join their discussion pages. Can you do that with your bank?
The Whitbread Share Price
Many realise that Costa Coffee is a subsidiary of Whitbread plc.
But do they realise that this Costa has nothing to do with the cruise line of the same name?
As the Whitbread share price doesn’t seem too strong, this may not be the case.
Good Riddance
I only came across the Occupy Movement’s camp outside St. Paul’s once. I was walking from the Millennium Bridge to Smithfield and to say it was an obstruction to an unsteady pensioner would be an understatement.
They may have some points about tax and power in the City, but most are just the descendants of the Hippy movement of the 1960s and just want to do what they want to do and stuff the rest of us.
There was a distinct and strong smell of tobacco and I think cannabis smoke as I passed. My son died of a disease related to that sort of heavy smoking. It wasn’t pleasant for him. Or his family!
So I’m rather pleased they have been cleared from the steps of St. Paul’s. I’m just a bit worried about where they pop-up next!
How To Create Jobs in Hong Kong
It would appear according to this article, that the Prudential, which is Britain’s biggest insurer, might be moving its headquarters out of the EU, because of regulation.
Hong Kong would seem to be the likely recipient of the jobs, as the company does 45% of its business in Asia.
Is this really what those of the left and the Occupy Movement want? After all, I’d like to see what happened to an Occupy Hong Kong?
Actually, it doesn’t bother me, as I don’t work for the Pru and I insure with a mutual.
RBS
Surely, if we paid no bonuses at the Royal Bank of UK Taxpayers, then these people would walk and we’d save their salary as well.
But would that also mean they’d be able to sue for constructive dismissal, as bonuses are expected?
Bureaucracy Isn’t All Bad or How to Get a UK Pension Forecast
I am 65 in a few months and I need to find out what my State Pension is going to be, so that I can plan my life accordingly.
As I live only a short walk from my local Jobcentre Plus and they helped me with my winter heating allowance, I decided they would be the first place to try.
They couldn’t help me directly, but they gave me a list of useful numbers and told me to ring the Pension Service on 0845 606 0265. This incidentally is free from BT, but expensive from a mobile.
After I got home, I rang the number and they told me that the simplest way was to ring another toll-free number, 0845 300 0168.
It took me about ten minutes before I gave them all the information they needed, like both out National Insurance numbers, C’s Date of Death and our Date of Marriage.
The guy at the other end said, I’d get the Pension Forecast through the post in about ten days.
It was all fairly painless! And there were no charges anywhere. Not even phone ones!
Lloyds Bank Bonuses and the Greek Bailout
The two main financial stories on the BBC this morning are that Lloyds Bank has taken back a lot of bonuses and that the Greek bailout is to be finalised.
I was just wondering if the bosses of Greek banks got any bonuses.
The Anonymous Widower 