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Post by bellybuster on Aug 1, 2018 18:11:45 GMT
After bailing on FC a few months ago, I've now bailed on Zopa. Here's why ...
£34k invested. Just about got out alive. Thanks P2P lending. It was a good run while it lasted.
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aju
Member of DD Central
Posts: 3,500 
Likes: 924
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Bailed
Aug 2, 2018 8:43:36 GMT
Post by aju on Aug 2, 2018 8:43:36 GMT
Just curious bellybuster what was you overall return for the year, as percentage. Im guessing it was plus rather than core or a split of them. The monthly earnings after default might be interesting too. Was this lending with relending on or off. Its interesting that it looks like defaults were occurring at the start which is a bit unusual is this showing the full term. |
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Post by nutfield on Aug 2, 2018 9:05:48 GMT
I must say that I find it difficult to justify investing with Zopa because the returns are variable (sometimes negative!) and relatively poor; and there is no control of the rate accepted by the lender; and there is no reserve fund. Other platforms offer predictable and higher returns, and a reserve fund. Accordingly I am voting with my feet and running my Zopa investment down.
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aju
Member of DD Central
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Bailed
Aug 2, 2018 9:32:12 GMT
Post by aju on Aug 2, 2018 9:32:12 GMT
That may be because Zopa and some of the others are based on relending on a long term not short term basis. Its true you don't get to chose the loans but in truth as long as zopa has the matching levels correct then it should be addressing high and low as it progresses. My own experience so far this year with new lending levels increased in both our portfolios it seems that the defaults are raised, but when compared against the overall they are still at <1% for us. The monthly picture is a bit different but there are enough months of data to suggest its swings and roundabouts for us anyway. (Most of our non Sg covered loans are limited to £10 by our method of lending). The thing about these is they are not for the faint hearted who constantly monitor, i've found that out to my cost - mentally not financially. I have been with Zopa since the early years, admittedly I have a much bigger stake now. What I have noticed is that the monthly figures that Zopa is showing are not that useful unless I want a hair pulling session or two. I have tried to get Zopa to add a "last 12 months" report to get a closer picture but I have to do that myself. They do have the weekly reports that have the last 2 months in I think, I keep them religiously in my spreadsheets and they seem to show a slight increase in rates. But again they are the estimates and not the reality. Having said all that the monthlies when viewed over a yearly basis show only a slight reduction in overall returns relative to the last 6/7 years or so. One thing I will say though is that I am only into Plus for a maximum of 20%, rest is core Sg etc. The SG defaults rates albeit only by loan do seem to show that Plus is not the only offender in the default stakes. In SG over the last 3 years or so of its existence I have over £600 that could have been in default were it not for the Sg cover they had. Thats not a small sum and as I said many of those were larger than £10 in value as well. By the same token the levels are still under zopa estimates even in those loans. Of course all of the above is for myself and Mrs Aju and it is still not a certainty that I am wise to hold my nerve but I am confident that my losses with still be outweighed by my gains for the time being anyway. Of course that's no help for yourself or others who are not sticking around due to their own equally acceptable instincts. PS I don't work for Zopa, in fact Zopa would like me to probably just to shut me up, but that's a whole different story.  |
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Bailed
Aug 2, 2018 22:48:16 GMT
Post by bellybuster on Aug 2, 2018 22:48:16 GMT
Just curious bellybuster what was you overall return for the year, as percentage. Im guessing it was plus rather than core or a split of them. The monthly earnings after default might be interesting too. Was this lending with relending on or off. Its interesting that it looks like defaults were occurring at the start which is a bit unusual is this showing the full term. I got spooked on FC because there were far too many very early defaults (some after only 1 or 2 repayments).
My personal belief is that the P2P lenders are looking to expand their loan book at the expense of the quality of the loans. You don't need too big an increase in your default % to make a big hole in your overall profits. Maybe I'm drawing too big a correlation but it feels Zopa are in the same position. If I were being really cynical I might suggest that is why they introduced Plus.
To answer your question, I was getting about 8% in the first half of the year and about 3% in the second half; so overall about 5.5%, although this was further impacted by the 1% resale fee.
I had my money in plus rather than classic, and relending on.
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benaj
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Bailed
Aug 3, 2018 8:22:48 GMT
Post by benaj on Aug 3, 2018 8:22:48 GMT
After bailing on FC a few months ago, I've now bailed on Zopa. Here's why ... £34k invested. Just about got out alive. Thanks P2P lending. It was a good run while it lasted. To answer your question, I was getting about 8% in the first half of the year and about 3% in the second half; so overall about 5.5%, although this was further impacted by the 1% resale fee. To be honest, you had better luck in your plus for getting 5.5% first year, as I was one of the unlucky one, at the time investing for 8 months, I could only see 4% for the first year and you had less defaults than mine in the first 6 months. The portfolio made 2.3% for first 8 months before I started selling off.
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zlb
Member of DD Central
Posts: 1,422
Likes: 333
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Bailed
Aug 7, 2018 9:52:00 GMT
via mobile
Post by zlb on Aug 7, 2018 9:52:00 GMT
Just curious bellybuster what was you overall return for the year, as percentage. Im guessing it was plus rather than core or a split of them. The monthly earnings after default might be interesting too. Was this lending with relending on or off. Its interesting that it looks like defaults were occurring at the start which is a bit unusual is this showing the full term. I had lots of instant defaults at the start, eg diversified to £50 per loan (I can't really say my mistake, more an error in Z setup which they keep saying they'll address and don't), defaulted at £49.50), etc. I think that the 1% diversification, no matter how large the deposit is a primary fault in the Z method.
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zlb
Member of DD Central
Posts: 1,422
Likes: 333
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Bailed
Aug 7, 2018 9:57:44 GMT
via mobile
Post by zlb on Aug 7, 2018 9:57:44 GMT
After bailing on FC a few months ago, I've now bailed on Zopa. Here's why ...
£34k invested. Just about got out alive. Thanks P2P lending. It was a good run while it lasted.
hi, to understand this occurrence, do you mind sharing what the largest lump sum was that you deposited? Eg if it was £10,000 you'd have been lending out £100 per loan... I've had bad defaults which continue to knock profits after putting in £5k lump sum once. I know not to do this now, but I wonder how many do.
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aju
Member of DD Central
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Post by aju on Aug 7, 2018 10:20:09 GMT
Just curious bellybuster what was you overall return for the year, as percentage. Im guessing it was plus rather than core or a split of them. The monthly earnings after default might be interesting too. Was this lending with relending on or off. Its interesting that it looks like defaults were occurring at the start which is a bit unusual is this showing the full term. I had lots of instant defaults at the start, eg diversified to £50 per loan (I can't really say my mistake, more an error in Z setup which they keep saying they'll address and don't), defaulted at £49.50), etc. I think that the 1% diversification, no matter how large the deposit is a primary fault in the Z method. I spoke with Zopa regarding this and it seemed they would like to make some changes around this but the fact that the speed of lending if its dropped below 1% is a real issue. Although it's not automatic, so not a real time indicator, I recently lent out 17k+ in ISA £10 blocks by keeping the amount in the lend queue to £1999 and below at all times. It was not easy and had a few mishaps along the way but the real thing that Zopa is concerned about is in my case it took nearly 2 months to lend out the 17k. Now I guess if it were lent all out and I was able to set the limit of any loan to £10 then it would drip feed quicker than my manual method and it would be in the queue quicker. I'm not sure if it would take much less time and in my case probably would be nearer a month to lend out that amount but not much quicker in my view. It would certainly save me a lot of hands on though. That said I think Zopa is missing a trick here in that they could allow lenders to set their ideal diversification level as long as they are aware of the slower lend rates. All of that said there are no certainties that diversifying at this level would be any better than at 1%, there are people who have questioned that the default rate will be the same, My experience at the moment is that I am getting regular defaults month on month now but at least they are £10 ones and not £50 ones. I have lent quite a bit into Zopa over the last 2 years or so and its still very difficult to gauge the default rate relative to my previous experiences. That said my rates year on year are below 1% still so I believe I am still on track to benefit more than not. My expectation though is only ever set at the lower end of zopa predictions and I am only 20% in Plus at the maximum relative to non plus. As long as i better the inflation rates + tax then I am happy my retirement wealth is not needlessly disappearing in Inflation tax.
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Bailed
Aug 7, 2018 15:09:07 GMT
aju likes this
Post by wyndstryke on Aug 7, 2018 15:09:07 GMT
I think it'd take exactly the same time to lend out (provided that the pool never reached zero), but certainly would save a lot of effort.
Going back a few years they did allow people to set the loan chunk size - that was before they removed all the 'fine tuning' / 'micromanagement' stuff.
On average over everyone, the default rate would be the same, but smaller loan chunk size / higher diversification means that on average, you are closer to the average ... low diversification means you trust more to luck (which could be either good or bad).
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aju
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Post by aju on Aug 7, 2018 15:59:51 GMT
I remember those heady old frontier days when you virtually set everything up and waited for things to happen - well not quite as you had to keep adjusting to get a bite - I remember when we used to chase loans by gaming the RR system for want of a better name.
Also some of us used to chase RR loans at higher rates, i can't remember the magic days now though i think they were more likely to be when there was less money than loans to be serviced. I also remember pining for a system where it was more automated but when it came it wasn't quite that great. I've still got my old spreadsheets where I would map out the upper limits and set my spreads for gains. Not sure I won much but then I was only in for £100 in them days.
"happy Days"
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Post by erniec on Aug 7, 2018 16:55:56 GMT
After bailing on FC a few months ago, I've now bailed on Zopa. Here's why ...
£34k invested. Just about got out alive. Thanks P2P lending. It was a good run while it lasted.
I like graphs so I thought I’d create one based on my and my wife’s experience. We each have both an ISA and non-ISA Zopa Plus. The graph shows returns, nett of defaults, over the last year and the total of the four: 
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aju
Member of DD Central
Posts: 3,500
Likes: 924
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Bailed
Aug 7, 2018 17:18:02 GMT
Post by aju on Aug 7, 2018 17:18:02 GMT
erniec, Wow I thought I had a lot skin in Zopa but that's some serious money, extrapolating forward that is, based on the total net amounts per month. Do you mind if I ask the percentage of Plus and non Plus across the whole, roughly speaking. I'm wondering if this is all Plus just based on the swings and roundabouts look later in the period. Also I'm guessing that your loans are quite large ones as well, still at 1% perhaps. The relend if it reduces loan size should even that out more I feel in the next 12 months. I've been rather fortunate in my ups and downs but unless it was classic I kept my loans much lower than the default 1%, as I 've said elsewhere not sure if this is a good strategy as its only been running for about a year and my experience across Zopa has been that in most of these loans one needs a couple of years relending to get a better picture. Looking at the later half though whilst its up and down it does seem to have settled into a pattern overall. The invest die does look a little bit less stable than the ISA side. The overall picture is a good one to work with as it shows that whilst individually it looks worse than the bigger picture. That said the overall return rate for the 12 months would be interesting to know. What the graphs also show is the front loading effect of the initial loans whilst the latter half shows the stabilising effect of relending, assuming that's how you work it. My own view is that anyone who looks at this in their own contect and then see individual losses is apt to miss the bigger picture and it may be why a lot of people bailed earlier than I personally would have done when the defaults come charging in like a battering ram at times. I must try and do similar as I have added our 4 loans together to get an overall picture but I'm still working on getting rates if I can.
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Bailed
Aug 7, 2018 17:36:08 GMT
Post by erniec on Aug 7, 2018 17:36:08 GMT
All loans are Zopa Plus and does represent a significant investment. We started around two years ago with ISA coming in around a year ago. Originally, we got involved due to low returns on traditional cash savings. One lesson I have learned is to slowly feed money in to keep the micro loan sizes down. You may be interested in this estimate of annual % Return:  |
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benaj
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Posts: 5,597
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Bailed
Aug 7, 2018 20:10:55 GMT
Post by benaj on Aug 7, 2018 20:10:55 GMT
All loans are Zopa Plus and does represent a significant investment. We started around two years ago with ISA coming in around a year ago. Originally, we got involved due to low returns on traditional cash savings. One lesson I have learned is to slowly feed money in to keep the micro loan sizes down. You may be interested in this estimate of annual % Return: Thanks for sharing the graph erniec, I found it very interesting. It definitely shows zopa product performance is not guaranteed and can varies a lot depending on the micro loans. Take October '17, Highest return is 10% while the lowest is -4%, In april, highest return is 7% and the lowest is 1.5%. The minimum variance is at least > 3% each month. The other thing it strikes me there are a couple of months where default hit hard, Jan '18 and June '19, During October '17 and Feb '18, default rate followed a similar pattern. I wonder if you could produce the annualised rate for each month for more meaningful result. Does it come close the the advertised 4.6% for the Plus?
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