Do People Pay Off Loans At The End Of The Year?
Looking at my Zopa figures it seems to show that more loans are paid up early around the turn of the year.
I can’t get any decent figures from my database, but it could be that at that time, people take a hard look at their finances and other factors might come in, such as parents paying off their children’s loans as a Christmas present.
Or it could be a one off effect this year as the Bank of England has said that mortgage lending has increased.
On the other hand, Zopa still seems to be lending money at the same rate, so perhaps the losers in this pincer movement are those providing traditional loans and overdrafts.
The Zopans Worked Hard Yesterday
If I look at the two loans, I chalked up on Christmas Day, both are now in my portfolio of loans. Five loans that were applied for yesterday have also been added.
It looks to me, that the Zopans worked hard yesterday.
My bank, Nationwide, is fully open today, but it won’t be again until the 3rd of January.
The Zopans
In my previous post, I used the term Zopans to describe those working on processing the loans at Zopa.
It conjures up images of dark figures in a subterranean hell forging iron with immense powerful machines. Some of these images go a bit over the top!
I think though it illustrates how the choice of a company name is important!
The Zopans Are At Work
There has been activity on my Zopa account this morning, with £150 credited from repayments and a couple of outstanding loan offers have been approved.
I suspect that a lot of these actions are just clever software, but some might have needed an OK from someone with a face and a brain!
Four loan offers have also appeared on my account with today’s date. So there are definitely people out there, who need a loan on most days in the year. My two loan offers on Christmas Day are still being processed.
Incidentally, looking at my loan book, I have a loan that was started on Christmas Day 2010.
I Get Two Possible Christmas Day Lenders On Zopa
My lending pot is empty, but today, I did get two new lenders, who are wanting to borrow money on Zopa. Obviously, they may not pass the credit checks, but they did apply on Christmas Day.
One canny Scot got an offer to borrow £5,000 at 5.8% and an East Ender got one to borrow £1,200 at 6.1%. Both were considered to be A* or the most highly-rated borrowers.
Zopa Was Processing Loans On Christmas Eve
Yesterday, I had nine loans shown being processed in my morning view of my Zopa account, with a total value of £830, but this morning those figures are 6 loans and £600. The interest has also gone up by a few pounds, so I suspect a couple of payments crept into Zopa from borrowers.
So somebody must have been working yesterday to OK the three loans that were added to my portfolio.
At least now, I’ll know if someone applies for a loan on Christmas Day, as I’ve got a few pounds in Zopa’s lending pot. This is contrary to what I said yesterday.
I bet your bank didn’t process your loan application yesterday!
I’ve Missed An Opportunity With Zopa
As I always do, I just checked my Zopa statistics this morning. Not that anything untoward or otherwise happens on a Sunday!
I like analysing statistics and it would ave been great fun to see if anybody apply for any loans over the holiday.
But at present, I’ve only got the princely sum of £0.39 available. So I won’t be able to collect any data.
I bet though, if you apply for a loan to Wonga on Christmas day, you’ll get a loan!
I’ve just looked back at my Zopa data for Christmas 2011 and it would appear that I did make a loan on Christmas Day. Obviously, it wasn’t processed until a few days later.
But why shouldn’t you apply for a loan on Christmas Day from a reputable lender? After all, the computers on which you perform your application never sleep. Or aren’t supposed to!
Wonga Move Into Credit Card Territory
According to this article from the BBC, Wonga are moving into credit card and web fulfilment territory with their latest service called PayLater.
Although, I’m not a fan of Wonga, it could be a good idea, provided they moderate their interest rates.
Would I like to see someone like Zopa or Ratesetter doing the same? Only of course, if they didn’t relax their credit checks.
After all, for years, with many products and some big purchases like cars, finance has been an integral part of the process.
The trouble with something like Zopa doing this, could be, that if the loan is turned down, then the sale could be lost.
But Wonga’s thinking does show how the banks and credit card companies are getting it in the neck from the new financial innovators.
Zopa And Funding Circle Get Government Funding
The Daily Telegraph is reporting that Zopa and Funding Circle are going to get tranches of funds to invest from the Government.
I very much applaud this move as although the sums are quite small at ten and twenty million pounds respectively for each, the government’s seal of approval can only help the growth of this form of lending. To put these sums in context, Zopa has lent over a quarter of a billion pounds and currently around thirty million is available to borrowers.
But surely the biggest boost is that with this extra funding, the publicity will drive more credit-worthy borrowers into the arms of Zopa and Funding Circle.
My only worry is a selfish one, that the interest rates available will drop because of the extra funds.
I certainly wouldn’t like to be holding any shares in a traditional bank.
I shall also be watching the return, that I’m getting on my money in Zopa.
Rothschilds Buy Into Zopa
This news seems to be good for peer-to-peer lending and Zopa in particular.
Read about it here on The Bankwatch.
The Anonymous Widower 