Started a Ratesetter vs Zopa experiment

That's your view.  Mine differs.

For those who may have been wondering, the experiment has been terminated.  Short version: Ratesetter won hands down and mum's Zopa account will be closed down early in 2015.

Longer version: higher interest payments on RS were rapidly overhauling the extra upfront money supplied by Zopa as an incentive to new borrowers (when opened, it was £25 to new investor and recommendor on RS and £50 each on Zopa).  We calculated that before end-2015 the difference would have gone and it was better over the long term to take a hit on Rapid Return rather than stay with Zopa.  The decision was made easier as several Zopa loans had already been paid off in full or in part, lowering the amount invested by around 10% in just 3 months.  Mum also disliked Zopa's way of doing business from the start (see earlier posts), so she was more than ready to abandon them. The Rapid Return process took about a week overall, so it's not instantaneous, but it was reasonably painless.  Mum now has rather more than the original £2k invested in Ratesetter and exhibits a somewhat Scrooge-like delight in checking weekly to see what's been going on.  In that respect, she has become a convert to P2P.

Lessons learned from this experiment?  Simple: if you can find a new investor, get them to take up Zopa, each of you pocket the incentive payments (total £100) and then cash out your Zopa investment ASAP.  The Rapid Return charge will be £20 at most, so between the two of you you're £80 ahead on £2,000 minimum investment, probably with six weeks.

Happy Christmas!

I, for one, refute the suggestion.  I would doubt that any P2P outfit would need somebody on the inside to avoid simply reading the forums. 

C88dnf, thanks to you and your mum for your "experiment" and your contribution to these boards.

I lend in both and have recently needed to invest another lump.

I mostly agree with your conclusions, however I have eventually chosen Zopa.

My two main reasons are:

1. I believe Zopa to be the safer long term bet as a viable platform. I think they are better established, more cautious and I like their business model.
2. I expect, at some time, I may need to extract my money at a rather quicker rate than just running it down. I believe, and am informed, (although I don't quite get the metrics!) that ZOPA is less punitive when doing this.

I like both platforms and accept that RS gives the better returns (at the moment and in the recent past). I do think ZOPA have upped their game recently. I also like Assetz but that's a different model completely.

Once again, thanks.

Hmm;wrt provision/safeguard, I believe it's not the size of the fund that matters but how accurate the assessment of bad debt is. I think zopa have the edge here having been thru 2008. I would prefer a company that has 110% of an accurate bad debt assessment than one that has 200% of a wildly underestimated one.

I actually think both funds are probably sufficient. Zopa are in receipt of significant institutional funding which reinforces my confidence in their model.

Dont get me wrong, I like rs and will continue to invest. I get average 5.9 on rs and average 5.2 on z.

Btw the queue position sw is now in place and I have 5k working thru the queue; will report back when it gets loaned out.