mikes1531
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Post by mikes1531 on Feb 21, 2016 22:38:31 GMT
So who does get the missing 25% of the interest for Access product? On the idle amusement side, it was amusing to see Zopa describing 25% lower interest as "slightly lower". In my world 25% less isn't "slightly" so I wonder what world the copy writer is living in. I expect Zopa to keep the missing interest as compensation for giving up their right to the 1% RR fee. The copy writer lives in the world of advertising -- where everything is described in the best possible way. Isn't it similar to the language estate agents use?
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Post by propman on Feb 22, 2016 12:00:58 GMT
Personally I think a 1/4 reduction in interest rate is reasonable compared to the drops on FSCS products for earlier access at reduced cost. I agree that more clarity is required in T&Cs to be claim proof.
Can anyone explain how the "higher interest rate" criteria is now applied? If it is the lowest rate a borrower of that credit grade & term or size & term or any single criteria would currently borrow at, I think only people withdrawing the majority would be affected by a fee. Of course there will be a reduction in average interest rate ongoing, but I imagine few of the investors will notice this. So the issue is only for those requiring the majority of their investment or if rates rise more than currently expected in this credit cycle.
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wapping35
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Post by wapping35 on Feb 22, 2016 14:08:23 GMT
FYI for those commenting re: The New Products. I have extracted part of a reply from ZOPA on some questions I have raised with them directly. ===================== As you can imagine, last week's email has fueled a flurry of correspondence and I can see it has prompted a lot of discussion on the independent P2P forum, with a lot of valid questions being asked. I can assure you that they will be addressed in future correspondence.
=========================== My bolding. It seems ZOPA is definitely taking note as to the comments being made here. Which I at least found, some what comforting to hear....  |
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registerme
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Post by registerme on Feb 22, 2016 15:20:15 GMT
It's pretty obvious though, isn't it.
* Zopa Classic - Up to 20% lower rates compared with current product
* Zopa Access - Up to 40% lower rates with free / fast access
* Zopa Plus - Up to 40% higher rates with no SafeGuard and more risk
If you want consumer lending exposure you can get better rates with more transparency at RateSetter, and the provision fund.
If you want exposure to anything else you can get considerably better rates almost anywhere else with more transparency (use of provision funds will vary).
Zopa might be counting on a large amount of passive ISA money arriving, or they might be confident of institutional funds, but they've basically guaranteed that they will drive away more active retail lender funds.
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james
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Post by james on Feb 22, 2016 15:49:20 GMT
* Zopa Access - Up to 40% lower rates with free / fast access While the blog and email certainly gave the impression that it's free, it may not be, depending on how interest rate changes affect the sale price used. I'm unsure how many newcomers to Zopa will be aware that there can be a capital loss as well as the Zopa fee when using the current Rapid return product and Zopa hasn't specified how this one works for any of the three products. If there is a prospect of capital loss then IMO these were misleading financial promotions because the prospect of capital loss is very important, both for itself and in comparison with other products. If you want consumer lending exposure you can get better rates with more transparency at RateSetter, and the provision fund. Yes, but RateSetter has a more punitive resale policy, potentially increasing the capital loss at sale time by pretending that the initial term was shorter than it was, then recalculating interest for that notional shorter time and deducting any negative difference from capital. Positive differences are retained for the protection fund. don't know whether all positive and negative are netted off against each other or whether it's done loan by loan. Of the two, Zopa may have the best exit but that's a bit like saying the choice to have half an arm chopped off is better than the whole arm, given the non-Zopa, non-RateSetter options out there.
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registerme
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Post by registerme on Feb 22, 2016 15:50:40 GMT
No argument with you there james. |
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wapping35
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Post by wapping35 on Mar 1, 2016 14:07:23 GMT
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ashtondav
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Post by ashtondav on Mar 1, 2016 16:25:17 GMT
Now for me, as a founder member paying 0% fees does that mean I'll get 7.5% in non SG loans?
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Post by geoffp on Mar 1, 2016 16:28:46 GMT
Blimey sarge it's awfully quiet here
...considering that the world's most famous (?) p2p lender is launching major new products.
What I would like to know is:
a) projected default rates for the D and E category borrowers b) the proportions of D & E categories that we might expect in a Zopa Plus loan book
A assume that 6.5% is the expected average borrowers pay lenders in the Z+ loan book, NOT the expected return?
I see that Ratesetter offers around 6% with a provision fund. One thing I always realised about 5-year Zopa loans was that about half the value of the loan book turned over in 2 years (hence there is some logic in Zopa's amalgamation of the longs and shorts). My question is whether 5-year Ratesetter loans get repaid early?
And a final question...Isn't it always quietest just before dawn?
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Post by geoffp on Mar 1, 2016 16:31:55 GMT
Now for me, as a founder member paying 0% fees does that mean I'll get 7.5% in non SG loans? I think so. I am a 0.5% payer and I've been told that the bonus remains.
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oldgrumpy
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Post by oldgrumpy on Mar 1, 2016 16:40:23 GMT
Now for me, as a founder member paying 0% fees does that mean I'll get 7.5% in non SG loans? Looks like it. Enjoy! Zopa, in their infinite wisdom, having alienated me two years ago when their "projected" 5% resulted in me getting 3.8% over six weeks (pre the rate-promise scheme), are now excited about making quite sure I can't get the more recent 5% (almost) guaranteed rate, and must make do with 4.5%. (I do pay the 1% fee - 22% of the interest!!). At least they haven't actually emailed me to ask why I have been withdrawing funds for so long. I wonder how long it will be before they take note that their main competitor (admittedly on a slightly different lending profile) consistently allows me (I have time to actively monitor my account) 6.3-6.5%, occasionally more, with very similar Safeguard protection. Lending is usually within two or three days, sometimes quicker. edit: My question is whether 5-year Ratesetter loans get repaid early?
Yes. I get about a dozen early repayments each month, at random times.
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registerme
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Post by registerme on Mar 1, 2016 17:54:46 GMT
Well, if you google Zopa, the first sponsored link says "Low Rates Guaranteed". So no false advertising there then  . (yes, I know this is for borrowers, but still). |
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Post by propman on Mar 2, 2016 8:57:20 GMT
Blimey sarge it's awfully quiet here
...considering that the world's most famous (?) p2p lender is launching major new products.
What I would like to know is:
a) projected default rates for the D and E category borrowers b) the proportions of D & E categories that we might expect in a Zopa Plus loan book
A assume that 6.5% is the expected average borrowers pay lenders in the Z+ loan book, NOT the expected return?
I see that Ratesetter offers around 6% with a provision fund. One thing I always realised about 5-year Zopa loans was that about half the value of the loan book turned over in 2 years (hence there is some logic in Zopa's amalgamation of the longs and shorts). My question is whether 5-year Ratesetter loans get repaid early?
And a final question...Isn't it always quietest just before dawn? I thought that the rate was supposed to be after defaults. This is all in the new world where we have to trust Z on what we get. So there will be a range of rates and expected defaults that in the very long term may average out to the promised rate! Designed for the sheep, the intelligent either go along for the ride or go elsewhere.
That said, I am considering a small investment to see what happens (first since early 2014), especially seeing high and rising defaults on RS. In contrast Z seems to have defaults under control as well as having experience of a downturn. Given the high defaults in C market in 2008 I assume that they will remain relatively cautious even on D & E lending.
- Propman
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Post by Deleted on Mar 2, 2016 9:21:42 GMT
Just to clarify that the 6.5% return with Zopa Plus is after expected defaults and loan servicing fees, so returns could well be higher or lower depending on the level of bad debt your experience.
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Post by geoffp on Mar 2, 2016 10:09:34 GMT
Just to clarify that the 6.5% return with Zopa Plus is after expected defaults and loan servicing fees, so returns could well be higher or lower depending on the level of bad debt your experience. Thanks Mat for the input. That looks worth a toe in the water.
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