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Post by monkeymagic on Jul 26, 2016 9:22:48 GMT
Hello,
If I was to invest £10k into a Zopa+ account, how long would you expect it would take to withdraw it all?
I'm investing for about 3 years, before we will need the money again as a lump for a house deposit.
I'm aware the demand for re-sold loans is not guaranteed. I'm also aware of the quick access account, but I'd like to try and get the higher rate of Zopa+ if possible.
Many thanks
Jamie
P.S I'm going to ask the same question about Ratesetter in that forum, but if you know the answer to that feel free to add that here!
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james
Posts: 2,205
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Post by james on Jul 26, 2016 12:08:41 GMT
Both Zopa and RateSetter are poor choices if you think that you may need the money before the term you lend for. Each of them has potentially punitive costs in addition to their direct charges. Those charges are for the difference in interest rate between when you lent and when you sell. If rates are lower, they keep the profit, not you. If rates are higher, you lose capital to match the new rate. RateSetter in addition pretends that you originally lent for a shorter term and makes a further charge if you got a higher rate than the shorter market offered when you did the original lending
There's no need to accept this, plenty of platforms have no charges for selling.
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Post by monkeymagic on Jul 26, 2016 12:34:19 GMT
Thanks for this. I've posted a rephrased question in the general forum, if you have any advice I'd appreciate your input.
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Post by wyndstryke on Jul 26, 2016 13:52:22 GMT
If you were to initially lend in the Classic market, and then change repayments to go into Access, by the time the 3 years is up, probably well over 80% of your investment will have been repaid from classic, and moved into Access. The 1% selling fee on the residual amount would be relatively painless.
I'm in pretty much the same boat as you, and I'm following the above strategy.
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james
Posts: 2,205
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Post by james on Jul 26, 2016 21:57:50 GMT
If you were to initially lend in the Classic market, and then change repayments to go into Access, by the time the 3 years is up, probably well over 80% of your investment will have been repaid from classic, and moved into Access. The 1% selling fee on the residual amount would be relatively painless. I'm in pretty much the same boat as you, and I'm following the above strategy. The bigger deal isn't the fixed 1%, it's what the extra cost might be if interest rates are higher.
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Greenwood2
Member of DD Central
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Post by Greenwood2 on Jul 27, 2016 10:32:30 GMT
Both Zopa and RateSetter are poor choices if you think that you may need the money before the term you lend for. Each of them has potentially punitive costs in addition to their direct charges. Those charges are for the difference in interest rate between when you lent and when you sell. If rates are lower, they keep the profit, not you. If rates are higher, you lose capital to match the new rate. RateSetter in addition pretends that you originally lent for a shorter term and makes a further charge if you got a higher rate than the shorter market offered when you did the original lending There's no need to accept this, plenty of platforms have no charges for selling. But will those platforms still be around in three years?
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james
Posts: 2,205
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Post by james on Jul 27, 2016 15:05:35 GMT
Yes, I think that at least the platforms that I would choose would still be around in three years. Not necessarily all but one filter I use is sufficiently high and reasonably stable lending volume or growth and sufficient financial backing. That can be a small platform with low ongoing costs and low margin that's returning more to lenders and borrowers, say.
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jnm21
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Post by jnm21 on Aug 9, 2016 18:28:19 GMT
If rates are lower, they keep the profit, not you. If rates are higher, you lose capital to match the new rate. RateSetter in addition pretends that you originally lent for a shorter term and makes a further charge if you got a higher rate than the shorter market offered when you did the original lending With regards to the first part I think that is unfair too, but when you say they, I think it is the Provision Fund in RateSetter's case that gets the profit (which makes it a little better). With regards to the last part, that was certainly my understanding, but a recent quote I got (I like to get a quote from time to time) makes me think that it is badly phrased on the RateSetter info. My understanding was, where rates remain the same, lend £100 for 5 years at 6%, sell after 1 year & we will give you a payout based on 4% where the average 1 year rate was 4%, not based on 6%. I now think that the adjustment to 'what you would have earned' refers to the skewed balance between interest & capital, where early on repayments include more interest than later ones. I could be wrong & would like this clarified.
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spiral
Member of DD Central
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Post by spiral on Aug 10, 2016 7:38:48 GMT
I now think that the adjustment to 'what you would have earned' refers to the skewed balance between interest & capital, where early on repayments include more interest than later ones. I could be wrong & would like this clarified. See this post p2pindependentforum.com/post/130244
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Post by propman on Aug 10, 2016 8:03:54 GMT
I now think that the adjustment to 'what you would have earned' refers to the skewed balance between interest & capital, where early on repayments include more interest than later ones. I could be wrong & would like this clarified. See this post p2pindependentforum.com/post/130244That is certainly how it used to work (please note the skew to interest is just only the remaining capital earning interest), but wasn't their speculation a little while back that they had finally alterered it to only applying to the capital remaining O/S? little difference in first few months, but huge later in the loan.
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jnm21
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Post by jnm21 on Aug 10, 2016 23:31:02 GMT
Just got a quote from RS:
The penultimate line shows 6.1% - if the quote is reducing interest to the rolling rate, that is very misleading to me.
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