nrw
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Post by nrw on Jun 2, 2017 10:16:56 GMT
Given the high volume of loan origination by Zopa, why not default Z+ to far higher diversification?
The bag of my fag packet tells me that there should be a sufficient volume of loans to provide diversification across at least 1000 loans (<0.1% concentration) over a short deployment period. This would help reduce the somewhat farcical current requirement to drip large sums into the market rather than deploy them all at once (to maximise diversification).
I have a lot of £300 loan parts (is this the maximum, regardless of quantum of funds deployed) which nobble returns when they default - which they regularly do. I'd smile harder if 10x £30 loan parts defaulted rather than 1x £300 loan part defaulted.
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aju
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Post by aju on Jun 2, 2017 11:26:57 GMT
I can concur with your idea, it would be nice to be able to set the exposure manually, i.e if I invested 20000 i'd set it to 0.1% to give £20 loans rather than £200 for this very reason.
Edit: I have heard back from zopa by email and its been confirmed that an investment of up to and including £1999 will deliver loans in £10 chunks.
I guess then that means that an investment of £2000-£3999 will give £20 chunks and so on but that bit is not confirmed just an educated guess
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Post by wyndstryke on Jun 2, 2017 13:50:23 GMT
... to drip large sums into the market rather than deploy them all at once (to maximise diversification). ... How many Z+ loans are done monthly in any case? I'm not in that market but feel that if you asked to get onto a thousand loans it'd take a while.
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nrw
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Post by nrw on Jun 2, 2017 14:30:24 GMT
I can concur with your idea, it would be nice to be able to set the exposure manually, i.e if I invested 20000 i'd set it to 0.1% to give £20 loans rather than £200 for this very reason. Edit: I have heard back from zopa by email and its been confirmed that an investment of up to and including £1999 will deliver loans in £10 chunks. I guess then that means that an investment of £2000-£3999 will give £20 chunks and so on but that bit is not confirmed just an educated guess If that's the case than diversification actually increases with larger cheques, because one of my Zopa accounts has just over £105k in it but the largest loan parts are £300 (representing a far lower % than any of the numbers referenced above) - so perhaps £300 is a hard ceiling on loan parts?
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Post by wyndstryke on Jun 2, 2017 16:23:11 GMT
Perhaps they won't let more than 1% of a loan be to a particular lender.
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aju
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Post by aju on Jun 2, 2017 16:38:56 GMT
You must be right if you lent the 105k in one block and max was £300 a loan.
Did you lend by chance lend 30k across each offering Access, Classic and Plus, Just wondering. Mind you if I was lending that much I'd probably be breathing a sigh of relief as the defaults could be huge if they are are on a par with my defaults. I have 30+ dating back to 2008 I think and the outstanding is in the region of half what I lent in the default loans. Although to be fair I have made way more interest than lost capital over the years.
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Post by misotu on Jun 16, 2017 8:33:18 GMT
I can concur with your idea, it would be nice to be able to set the exposure manually, i.e if I invested 20000 i'd set it to 0.1% to give £20 loans rather than £200 for this very reason. Edit: I have heard back from zopa by email and its been confirmed that an investment of up to and including £1999 will deliver loans in £10 chunks. I guess then that means that an investment of £2000-£3999 will give £20 chunks and so on but that bit is not confirmed just an educated guess I'm now drip-feeding funds into the new ISA account and want to keep my loans down to £10. Completely understand that £1999 is the key figure, but I'm not sure whether that's the sum of new money + repayments + matching or whether it is just new money on offer? Or some other combination? I know it's not overall loanbook size, from observation. Has anyone got a rock solid answer on this one? I'm very happy to spend the time drip-feeding to keep the loan size down.
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aju
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Post by aju on Jun 16, 2017 8:47:09 GMT
Hmmm!,
Thats an interesting one. I never intended to move existing money to ISA, I wanted to maintain a large amount in classic that will remain covered by safeguard until it closes 2022 I think was mentioned. I'll turn relend over in December, if I remember to set a reminder ;-).
I'm just adding new money in with this years allowance. Just out of interest, my plus could be transferred across, does the transfer from existing allow a relend status to the isa lending thus making it much faster lend rate - almost instant on a daily basis - or does it suffer from moving to hold and then being classed as new money and the lend rate is much slower - probably even slower than before the ISA opened up.
Someone mentioned that plus was slower but essentially my return rate is much slower than the lend rate in plus so it gets lent very quickly at the moment, I think.
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nrw
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Post by nrw on Jul 4, 2017 7:24:34 GMT
If that's the case than diversification actually increases with larger cheques, because one of my Zopa accounts has just over £105k in it but the largest loan parts are £300 (representing a far lower % than any of the numbers referenced above) - so perhaps £300 is a hard ceiling on loan parts? FYI an update on the above - £300 isn't a hard ceiling on loan amounts after all. I have just added £50k to my Z+ account, so total is now > £150k and it's lending in chunks of £500.
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aju
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Post by aju on Jul 4, 2017 8:35:51 GMT
Oops, something went wrong with quoting in that one nrw . Either that or I've suddenly got a lot richer than i was last week 😁 |
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aju
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Post by aju on Jul 19, 2017 23:59:07 GMT
Okay so I got impatient and made a slight booboo in that I added £1000 too fast to both mine and mrs aju's core ISA accounts before the matching funds were <£1000 and blow me if they lent out quicker than they were for the past two days. Now i've got a raft of £20 loans before I noticed albeit they are at average of 6.05%. I removed the soiled funds and re-applied them to the core ISA.
Trouble is I checked my current classic SG and there are £500's worth of defaults in approx £9000 book, obviously they have all paid up but in an unprotected non SG book i'd rather the defaults were kept to the bare minimum of value where I can.
I did a bit of maths on the amounts that actually would have been lost and it came to around £400+ that could have been lost. Now of course my current pre-safeguard shows that in reality 50% is repaid albeit at very slow rates. One other thing is that past paid ups do not indicate future paid ups so I need to get the max diversification I can where I can control it.
I won't be getting impatient again if can help it. I'm guessing that the stopped and relent money now being new money will not match and lend as fast as the £1000 I put in last night did but we'll see.
New lesson learned every day ....
Edit: (20/07 08:45) so it seems that matching is much faster at the moment as both our accounts started relending again about 12hrs after i stopped and restarted. Perhaps lending is down a little at the moment.
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