|
Post by ruralres66 on Sept 1, 2016 13:11:07 GMT
From Zopa; We're writing to let you know about upcoming changes to headline rates for Access, Classic and Plus. As of September 8th, 2016 all lender rates will decrease by 0.2%:
● Access will reduce to 3.3% from 3.5% ● Classic will reduce to 4.1% from 4.3% ● Plus will reduce to 6.5% from 6.7%
Any money in the queue from September 8th will be lent out at these new rates, so you have time to manage your lending settings if you wish. We will be updating our website later this week to reflect the new rates.
As you will be aware, the Bank of England recently cut interest rates to a record low of 0.25%. While we aren't as closely tied to the interest rate as high street banks, it has affected us in a couple of ways:
● Headline rates for borrowers across the board are at a record low. We have seen 0.1-0.3% reduction in headline rates from other loan providers across key loan categories since the interest rate cut. It's important that we stay competitive while maintaining our high standard of borrower.
● Banks have already reduced their rates dramatically: in many cases by more than 0.25%. This lack of competitiveness for investors from the banks has led to a surge in new lenders at Zopa; meaning slower lending speeds and queues of, on average, 10 days in Classic. This is something we closely monitor and manage. As we are a marketplace it's essential that we maintain the balance between borrowing and lending.
|
|
|
Post by westonkevRS on Sept 1, 2016 20:58:47 GMT
Wrong thread. This is for RateSetter, a P2P lending site with rates set by individual customers.
This should be in the "wannabe bank segment".
Kevin.
|
|
|
Post by newlender on Sept 1, 2016 21:12:46 GMT
Actually Kevin it makes RS look pretty good, as Zopa Classic is very similar to RS. The rates on offer for Zopa C. now are lower than the RS 5 year rate being discussed in another thread here. I think the point the OP was making is that rates are on the slide everywhere at the moment.
|
|
|
Post by westonkevRS on Sept 2, 2016 6:10:14 GMT
Actually Kevin it makes RS look pretty good, as Zopa Classic is very similar to RS. The rates on offer for Zopa C. now are lower than the RS 5 year rate being discussed in another thread here. I think the point the OP was making is that rates are on the slide everywhere at the moment. I know, I wasn't having a pop at a forumite, and I apologize if it came across that way. I am genuinely disappointed, it seems a statement so far removed from the original P2P principles or wish to offer savers/lenders a better deal than the banks. And the email was just a mirror of the recent letters and email excuses I've had from the Banks and Building Societies to lower rates and increase their margins. Kevin.
|
|
|
Post by propman on Sept 2, 2016 7:48:21 GMT
I am genuinely disappointed, it seems a statement so far removed from the original P2P principles or wish to offer savers/lenders a better deal than the banks. And the email was just a mirror of the recent letters and email excuses I've had from the Banks and Building Societies to lower rates and increase their margins. Kevin. Kevin, are you saying that the rates available from mainstream competitors have not decreased?
|
|
adrianc
Member of DD Central
Posts: 9,012
Likes: 4,824
|
Post by adrianc on Sept 2, 2016 8:00:16 GMT
...just a mirror of the recent letters and email excuses I've had from the Banks and Building Societies to lower rates... Kevin, are you saying that the rates available from mainstream competitors have not decreased? Seems like he's fairly clearly saying the exact opposite.
|
|
|
Post by davee39 on Sept 2, 2016 8:20:15 GMT
Actually Kevin it makes RS look pretty good, as Zopa Classic is very similar to RS. The rates on offer for Zopa C. now are lower than the RS 5 year rate being discussed in another thread here. I think the point the OP was making is that rates are on the slide everywhere at the moment. I know, I wasn't having a pop at a forumite, and I apologize if it came across that way. I am genuinely disappointed, it seems a statement so far removed from the original P2P principles or wish to offer savers/lenders a better deal than the banks. And the email was just a mirror of the recent letters and email excuses I've had from the Banks and Building Societies to lower rates and increase their margins. Kevin. When Banks are paying savers 0.01% they can offer loans at 3%. If P2P tries to match these rates some lenders will have to lend at low rates on some loans. While RS and Zopa have different models to boost rates, both platforms have seen rate reductions due to additional lender demand and reduced borrower growth. RS were able to raise the 5yr rate with innovative deals such as mobile phones, Zopa is trying to do the same with a move into car financing. More innovations like these will be needed to allow the platforms to keep offering a better deal. The Zopa classic rate is not strictly comparable with RS 5yr. Zopa loans include a mix of terms between 1 and 5yrs and these are matched between lenders and borrowers. RS helps maintain the 5yr rate through matching rolling funds to longer term loans (Including the 6 month mobile contracts). At present my Zopa exposure is 75% of that in RS, but I expect them to reach parity.
|
|
|
Post by ruralres66 on Sept 2, 2016 8:20:16 GMT
Actually Kevin it makes RS look pretty good, as Zopa Classic is very similar to RS. The rates on offer for Zopa C. now are lower than the RS 5 year rate being discussed in another thread here. I think the point the OP was making is that rates are on the slide everywhere at the moment. Exactly my point, though not explicitly made by me. What the competition are doing is relevant to RS and it's lenders surely? Apology accepted Kevin but "think before you type" might be in order?!! Of all P2P on offer, I have been most aligned with RS (and considerably so but have backed out significantly recently by more than 50% of my lending)... though I did dip my toe in Zopa in 2013 and still have a minuscule interest there. I am grateful to this forum which has provided the reassurances by it's analysis and comments not available (independently) elsewhere. The posting was very much to reflect the flavour of where things are at. Very few forumites on this site are only dabbing with one P2P I would suggest? What happens on on site will help decisions to be made generally on any specific site. I am firmly "remaining" and am not intending "RSexit" for the foreseeable future................. Zopa, I will give a miss.........
|
|
|
Post by newlender on Sept 2, 2016 12:06:00 GMT
That'll be a Zexit then. I like both platforms for different reasons and will stick with about 10% of my portfolio spread between them. The high demand from lenders is bound to affect rates and we have to take the hit, I'm afraid. Zopa Plus is giving me the predicted rate of non-payments (not defaults yet) and the rates are still competitive but I wonder if they have actually reduced rates for borrowers too before sending out that email. RS has the big advantage for me in that if I stick in £500 at 5.3% for 5 years, that's the rate I get (yes, I know it's not always 60 monthly ones). Zopa's microloans are virtually impossible to track if you have hundreds, as I do.
|
|
|
Post by propman on Sept 5, 2016 7:52:13 GMT
Kevin, are you saying that the rates available from mainstream competitors have not decreased? Seems like he's fairly clearly saying the exact opposite. These comments refer to rates for investors, I was asking about rates for borrowers.
It seems like RS's "Market" solution has lead to a drop of >0.5% so Zopa's approach has had a smaller impact on lenders!
- PM
|
|
adrianc
Member of DD Central
Posts: 9,012
Likes: 4,824
|
Post by adrianc on Sept 5, 2016 8:02:49 GMT
Seems like he's fairly clearly saying the exact opposite. These comments refer to rates for investors, I was asking about rates for borrowers. They're linked.
|
|
|
Post by propman on Sept 5, 2016 16:10:05 GMT
These comments refer to rates for investors, I was asking about rates for borrowers. They're linked. Not necessarily if they are increasing margins while reducing rates to lenders. The implication I took from this was that Zopa were taking advantage of "greed" by the competitors to grab a greater share themselves.
- PM
|
|
|
Post by Deleted on Sept 5, 2016 16:18:11 GMT
Given the loss they have just reported, a bit of extra margin is probably a good thing!
|
|
|
Post by westonkevRS on Sept 17, 2016 7:34:02 GMT
This seems a new P2P reporting web site, but it's certainly true for RateSetter that we saw a surge of new lenders after the base rate cut: www.p2pfinancenews.co.uk/2016/09/16/ratesetter-doubles-investors-rate-cut/The difference was that RateSetter didn't choose by committee to lower lender returns, we let our markets set the lender rates. Although with the surge of new lenders and consistent borrowers, arguably it had the same impact (although now as a result we have done more loans) Kevin.
|
|