The Anonymous Widower

Is Peer-To-Peer Lending Having A Spot Of Bother?

There have been one or two news reports questioning asking tis question.

I invest in Zopa and I have made the prudent decision to put my spare money in a Safeguarded product.

I have had a good run and certainly get more on my savings than I would in a bank. Obviously, I am including any bad debts in this statement.

I shall watch the situation, but I still believe what I said in Stability in Financial Systems.

If there are rumours of a spot of bother, then the following will happen.

  • Investors will put their money elsewhere.
  • Rates to lenders will rise.
  • This will tempt nvestors back in.

It’s a merry-go-round for money!

Note that because Zopa matches investors and borrowers by means of a computer, no human bias can drive the system in a wrong direction. Except a bent programmer and hoipefully systems are in place to check the honesty of their employees.

September 2, 2017 Posted by | Finance | , | Leave a comment

Peer-To-Peer Lending Is Different In The US

I like peer-to-peer lending and have quite a large sum invested. But after reading this article in the Financial Times, I’m pretty certain that if I lived in the United States, I wouldn’t touch peer-to-peer lending with a bargepole.

The reason is that in the United States, institutional investors get first pick of the borrowers and are developing software, so that the retail investors gets what’s left.

In the UK, the Peer-To-Peer Finance Association has moved to ban this practice and make all investors equal.

The day they give preference to institutions, my money will be withdrawn gradually as it becomes available.

I think we all have to remember that one of the causes of the Financial Crash of a few years ago was greedy bankers, who felt they were a class above the vast majority of people, who have made their money by sheer dint of hard work.

Whatever you do, read the article in the FT. It’s a cracker!

And also look at the Peer-To-Peer Finance Association web site!

May 23, 2015 Posted by | Finance, World | | Leave a comment

Peer-to-Peer Lending And Retirement

This article in the FT, entitled Zopa To Launch Product For Retirement Savers is a must-read for anybody who is retired or thinking about it. This the first paragraph.

The UK’s largest peer-to-peer lending service, Zopa, is developing a new investment product tailored to people beyond retirement age who will have much more flexible access to their pension savings from April.

It sounds that I’m using my Zopa funds in a similar way. There is one big difference though in that I’m doing it using the standard Zopa system, so I’m not paying anybody in the middle for commission or advice.

My use may have advantages, in that as funds comes available they can be stored away in Zopa.

January 3, 2015 Posted by | Finance | , , | Leave a comment

My Zopa Summary For 2014

I’m publishing these figures, as in my view, they are very indicative of a mature Zopa account.

Remember that I started investing in 2008, so some of the money is possibly on its third loan.

I have added to the pot over the years, when I have spare money left over at the end of the month. I’ve also repatriated money at times, when because of circumstances, I have some large bills to pay.

At the start of the year I had £147,000 invested and at the year end that had risen to £156,000.

Over the year, I’ve actually taken out £16,700 and paid in £18,500, so I haven’t really paid anything into the pot.

Interest and repayments to my holding account in Zopa has been almost £96,000, which conveniently works out at £8,000 a month. So I could bring up to this sum into my bank account for paying bills every month. As these payments usually occur around the beginning of each month, it is very easy to juggle them with my approved overdraft limit to avoid paying the wunch, excess fees I don’t need to.

Over the last year, the amount of money I’ve earned works out as a return of five percent before tax.

Because most of my money has been lent out in the last couple of years or so, I suspect that a high proportion of my Zopa money is covered by their Safeguard scheme.

The downsides are that I could earn more with more risky peer-to-peer lenders and I have to pay tax on my earnings.

I never give financial investment advice, but I have found Zopa to be the ideal mattress to put my spare money in a place, where I can access it reasonably quickly. It certainly pays a better interest rate.

 

January 2, 2015 Posted by | Finance | , , | Leave a comment

Peer-To-Peer Energy

This report from the UK Solar Power Portal makes some good points.

I can envisage a time, when the solar panels on my roof, feed into a system, that gets me the best price and this is delivered at a best price to those that need it.

As a control engineer, I know it’ll probably be totally automatic and the price will be a balance that is the best for micro-generators and consumers. Just as with peer-to-peer lending, the only losers will be the big companies. Except for banks, you will read energy companies.

December 18, 2014 Posted by | Finance, World | , | Leave a comment

Peer-to-Peer Lending Losses To Be Eligible For Relief

An obstacle to some, who might want to use peer-to-peer lenders to save money, is that any there was no relief for any bad debts. But George Osborne has changed all that and you can read about it in the Guardian. This is said.

And this week the industry received a major boost when George Osborne unveiled a package of measures designed to help it grow. Crucially, the chancellor announced a new bad debt relief which will allow individual investors to offset any losses.

So it seems that peer-to-peer lending is getting less risky all the time.

 

 

December 6, 2014 Posted by | Finance | , | Leave a comment

Zopa Goes With The Flow

This article on CrowdfundInsider talks of a tie-up between a boiler maker; Flow and a peer-to-peer lender; Zopa. This describes the link.

The Flow boiler will be launching in January 2015 and will be available to customers through a new finance package. This will provide a payback time of five years for the complete cost of the boiler. Customers may purchase the Flow boiler using a separate unsecured personal loan via Zopa, with repayments being off-set by reductions in your home energy bill from the value of the electricity generated.

I think we’ll see a lot of deals like this, where two new companies in different fields link up to make two and two add up to six.

This is disruptive innovation at its best.

December 2, 2014 Posted by | Finance, Travel, World | , , , , | Leave a comment

Payday Loans Get A Cap and a Kicking

This morning the Financial Conduct Authority has imposed a cap on payday lenders. The BBC report starts like this.

Payday loan rates will be capped at 0.8% of the amount borrowed a day,said the Financial Conduct Authority (FCA).

In total, no one will have to pay back more than twice what they borrowed, and there will be a £15 cap on default charges.

I do hope that this type of loan quickly becomes a blip on the history of finance.

If you might at some time need to borrow money, make sure that you can get the best credit rating you can, by behaving responsibly. This should help to give you access to finance at a reasonable rate when you need it.

But we can all help to get rid of these high cost loans.

I believe that if we put our savings in a peer-to-peer lender that lends to others, this will put more money in the hands of responsible lenders, who can lend to those that need to borrow, who fit their lending requirements.

So you’ll be helping yourself and also helping others.

But do choose a peer-to-peer lender that is or will be regulated under the FCA.

Zopa, who are regulated, say this about their relationship with the FCA

November 11, 2014 Posted by | Finance | , | Leave a comment

Peer-To-Peer Lending For The Non-Digital World

I was an early adopter of peer-to-peer lending in 2008 and now have a six figure sum invested, which returns me over five percent before tax.

Reading the letters about poor broad band and mobile phone coverage in today’s Sunday Times, it strikes me that many people are cut off from this sensible investment.

I could if I wanted to, set up my Zopa account, so that I perhaps looked at it once every blue moon.

Would it be an idea if one of the peer-to-peer lenders offered a minimal input product for those disconnected from the digital world?

Money would be paid in by a direct transfer or even a cheque paid in at a bank branch, if you still use one.

If you needed to check your account or perhaps withdraw a small amount of the interest and repayments that you have received as cash, you would just use a debit card in any ATM.

Obviously, you will still have the option to login normally, if you wanted.

November 9, 2014 Posted by | Computing, Finance, World | | Leave a comment

Why Bother With Traditional Savings Accounts?

The Sunday Times today, has an article entitled Savers Face Clampdown On Access To Top-Rating Accounts. Here’s the first two paragraphs.

Savers are struggling to access the best-paying accounts as banks and building societies impose restrictions, such as limiting customers to certain postcodes, and slash the deposits that can be held.

A report for The Sunday Times by the consumer group Savings Champion shows the amount that can be saved in the best buy accounts has shrunk significantly in two years. In 2012, you could save up to £1m in the top two best-paying easy access accounts and up to £9m in the third-ranked. Today, the top three easy access deals allow up to £3,000 or £6,000.

And there’s a lot more in the same vein.

For nearly eight years now, I’ve not used a traditional savings account. I have over a hundred thousand of my hard-earned money in an account with Zopa and in that time, I’ve earned over five percent.

The banks can only get savers to invest in their rip-off products, as they know there are several hundred mugs born every minute.

And to me the great thing about Zopa is that it is not just a high-interest account, but one with fast planned access, where you can start saving with as little as a tenner. I talked about how to use an account to your advantage here.

You don’t have to live in a specific postcode, or have millions to play with and so long as you’re over eighteen and fund your Zopa account from a UK bank account, you’re in the club.

I should also say that with Zopa, I will also include other reputable peer-to-peer lenders. But I’m entitled to have my preference.

September 21, 2014 Posted by | Finance | , | Leave a comment