Are you comfortable with Zopa?

The maximum size of a Zopa loan chunk is 1% of your queued money rounded down to a whole number of £10s, with £10 as the minimum, £1999 queued results in £10 chunks, £2000 results in £20 chunks, etc.  It resets when you move money in or out of the queue.  So for a single tranche of cash, the best diversification you can get is 199.  That's not sufficient IMO hence why multiple tranches is better.  I'm currently keeping my queued money at about 1900-ish by topping up from holding when needed.  Takes longer, but is worthwhile.

I looked back in the post history to try to find my example, but couldn't find it.  The nearest one was this one : p2pindependentforum.com/thread/9873/selling-loan-parts-manual-months

Seems I was wrong, I dont think I have ever put in more than 1k at a time so money has always been lent out in £10 chunks... I will have to be careful when putting in sizable chunks again..

At the moment, the liquidity of zopa is my main concern. I personally think zopa does not tells us everything about the issues we hate. If you look at the default rates, zopa core is still high risk for 4.0% return. The risk for zopa classic was lower and better return.

IMHO, zopa intended to change the product from classic to plus/core, due to the fierce competition of low risk high street loan, in to lure new investment money. Especially when zopa can offer borrowers @2.1% and tells investor expecting 4% return.

If you never plan to sell of the entire investment on Zopa, the projected return always look good on paper.

My partner is still trying to sell the last loan (A2) @ 2.1% for less than £10 in her zopa classic, just nothing sold.

There are better rates elsewhere than 2.1%

I can't believe zopa is selling a product which has a higher default rate than its projected return.

www.ft.com/content/c749ba88-16f6-11e8-9376-4a6390addb44

Back in 2012, default was 1.2% and return was 5% plus. 

Now in 2018, default rate revised to 4.86% and the projected return on the plus is 4.6%. 😱

So they (the FT) seem to be using stats Zopa declared recently, mid Jan 2018. But Zopa's risk data here seems somewhat confused that all loans up to 2013 are 100% paid up but I'm sure I'm not the only one who has quite few loans in default from the following years that are still in default and waiting to be paid.

2009 7 loans with £37.02 outstanding
2010 6 loans with £28.72 outstanding
2011 4 loans with £12.57 outstanding
2012 5 loans with £25.86 outstanding

Perhaps I'm misunderstanding their data but these loans are far from 100% completed so by that definition who is sure that Zopa's other stats figures can be relied on anyway.

I didn't think of it that way but I guess some of us already knew that defaults over time will return 50% of the money lent. I can say this as all those loans detailed as still outstanding are £10 loans - for me that is. Whilst I think you may be right its not very helpful to have a table defining defaults in this way as it gives  false impression that defaults will be completed quicker than they maybe.

I'm not at home at the moment and I don;t have a copy of the public loan book but I wonder if interrogating that might give a better idea of the defaults levels. Just using my experience may not be a good indicator of the overall default level. 

I would say that defaults will start to become more obvious to lenders now that SG has been closed for recent loans. The only way to pick up more accurate default rates is to consider the numbers of defaults in SG using the default date field in the SG data. I think seeing this is one of the reasons I'm uncomfortable of the true default levels. Having siad that using the 50% rule still gives me the confidence to stick with it, that and the facft that I am still in profit at the moment for this year. My main reason for sticking sith it is that the default rate always seems worse until the lending on a given product starts to mature (Assuming relend set to same product that is).

I understand your response as i was surprised myself when I started to analyse the defaults in SG that most people would not have even noticed as they paid back but to be honest I'm a bit uncomfortable with a cut and run approach based on my overall lending patterns over the last 10 years. I,m just going through the Public data that Zopa provides and seeing a similar pattern to that mentioned individually. It seems that a rough guess of 50% return on any default group is a reasonable approach to things. It may take a long time though!. One interesting thing is the number of loans that paid nothing though, still a very small percentage of the nearly 450000 recorded loans but interesting none the less.

I've never made any withdrawals other than a £1 at the start as a test of zopa in 2006. My thoughts are that once the relending is cycling monthly and after about 18 - 24 months my belief is that my investment will have stabilised. Fortunately for me, I think, I decided quite early in the ISA lending that the number of defaults in SG might be an issue if I had not had the benefit of Sg £660 at present. My experience of active defaults in the past leads me to believe that if that number were not covered by SG then my loss up to  this point would be slightly less than 50% overall. This means that I am still up on the deal so to speak. 

Of course none of this SG defaults is based on real cases and it does feel very much like damage limitation might be a better option with current defaults seemingly mounting. I'll keep pressing on though to at least until I have had 12 months of relending on the original investments to see if things do in fact start to stabilise. Having said all this I have quite a bit of leeway of defaults up to the end of this fin year as the interest received is at its highest in the 1st year. If I were not planning on a 5 year approach it may well mean I should cut now. Who knows and I guess one positive for me as an active relender is that all of the good loans will come free to potentially be part of my investment as people leave early. Of course once the default is hardened into any given account its stuck there until closure - I think!.   

Pssst! Dont tell Mrs Aju though she may not see this as i do and want her investments cut so she can go shopping instead ;-)