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Post by dan1 on May 26, 2017 8:39:48 GMT
Absolute c*** I had just joined RateSetter when Zopa introduced the SafeGuard. It was a direct copy ( immigration, flattery, etc.) because they saw it was popular with lenders. It gave confidence and the ability to provide specific returns without the vagaries of forecasted bad debt. Institutional lenders don't take SafeGuard protection as they prefer to boost returns by taking the risk. Did you mean immigration (general election thoughts on your mind?), I assumed you meant imitation?
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Post by WestonKevTMP on May 26, 2017 11:34:11 GMT
.... Unless the PF is funded perfectly, it is BAD for lenders. This seems to be a common current thought process, in that any surplus could have been given back in increased interest. However in my experience, lenders are happy to have reduced interest if they have the comfort of a fund to cover unknown bad debt, and the known AER return without vagaries. This knowledge and comfort comes at a price, like insurance, and I'm happy to pay it. Kevin.
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dandy
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Post by dandy on May 26, 2017 12:14:59 GMT
.... Unless the PF is funded perfectly, it is BAD for lenders. This seems to be a common current thought process, in that any surplus could have been given back in increased interest. However in my experience, lenders are happy to have reduced interest if they have the comfort of a fund to cover unknown bad debt, and the known AER return without vagaries. This knowledge and comfort comes at a price, like insurance, and I'm happy to pay it. Kevin. Accept its not knowledge as you don't KNOW the PF will cover it and if it does its with your own money anyway. Call a spade a spade. PF = capped upside, same risk to downside. Simple. Its only effective to cover lack of diversification which on RS is inherent in the model unlike Zopa. Article from RS yesterday suggesting failing models will be switched to proven models. Hmmm ... www.p2pfinancenews.co.uk/2017/05/25/ratesetter-lewis-ipo-asset-finance/ “In addition, some models may prove to be unsustainable and we may see some morphing towards something that has been proved to work.”
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Post by vanthel on May 26, 2017 23:34:49 GMT
I'm personally very happy with Z+; couldn't care less about safeguard, in fact I regret ever putting some money in classic and excited about the upcoming core. Going to have to do some analysis to see if it's a position I would like to take. For me, the abolishing of the safeguard products represents a reduction in risk as it means Zopa as a platform can survive a greater downturn should the fund be insufficient.
I hope that they implement clear education on the risks involved though, as is evident on this forum, which is probably the upper quantile of personal finance/investment savvyness, people get spooked very easily by expected losses.
Also, contrary to many people on this forum I am a massive fan of how Zopa gives everyone a spread of the market and no one can pick and choose the loans; or worse, get a computer to do it for them. Zopa has a duty to be fair to everyone and I think this achieves that.
As with others I do however find the reasoning for removal inconsistent with the reasoning for its introduction. In the interest of transparency I will probably be pursuing clarification on this difference.
One thing I am struggling to learn anywhere is: if a loan within an IFISA product defaults and becomes 'bad debt', can that loss be offset against tax paid on P2P interest not held within the IFISA?
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happy
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Post by happy on May 27, 2017 4:57:45 GMT
.One thing I am struggling to learn anywhere is: if a loan within an IFISA product defaults and becomes 'bad debt', can that loss be offset against tax paid on P2P interest not held within the IFISA? I believe the answer to your question on ISA losses is no. Losses within an ISA cannot be used to offset any gains in investments oitside an ISA. As I understand it this applies to any tax sheltered product, S&S ISAs & SIPPs as well.
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Post by gidoppp01 on May 27, 2017 6:13:21 GMT
Having invested in Zopa for more than 5 years, I now have discovered a few minor things. I won't say Zopa is a platform that I would recommend to a friend.
For easy access, Zopa Access is not the one.
The new Zopa Core without safeguared loans only means not 100% of the investment can be withdrawn at the time you want, because any loans with a history of missed payment cannot be sold to another investor. The product has a lot higher risk and it certainly not as simple as it seems to be even @ 3.9%.
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aju
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Post by aju on May 31, 2017 23:33:59 GMT
In the recent blog, blog.zopa.com/2017/05/25/introducing-the-zopa-ifisa-and-zopa-core/Zopa said ... 'From launch, investors will be able to send Access and / or Classic repayments into Core, and add new funds. Core, like Plus, will have a minimum investment of £1,000 to diversify your risk: this will be waived for existing customers moving their repayments across, but it’s important to remember that those customers with a waived minimum will have more than 1% exposure to each borrower and will have a higher chance of losing money.'
Trouble is I want to control my investment to keep the exposure to 1% but the above comment about the waived minimum suggests that lending in £1000 blocks will no longer lend at £10 (1%). I don't actually want to redirect existing funds into the ISA or the new products on day one, I want to add new funds into the ISA and get a feel for it. I don't actually want to be lending at anything more than a 1% exposure so its not clear that I'll be able to control this in the new products or not by limiting the lend to £1000 blocks. I'm a little concerned that zopa is moving to greater exposure rate than I can control. Any ideas anyone, hopefully I am just a little confused or I'm about to be very disappointed. |
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Post by gidoppp01 on Jun 1, 2017 2:17:16 GMT
In the recent blog, blog.zopa.com/2017/05/25/introducing-the-zopa-ifisa-and-zopa-core/Zopa said ... 'From launch, investors will be able to send Access and / or Classic repayments into Core, and add new funds. Core, like Plus, will have a minimum investment of £1,000 to diversify your risk: this will be waived for existing customers moving their repayments across, but it’s important to remember that those customers with a waived minimum will have more than 1% exposure to each borrower and will have a higher chance of losing money.'
Trouble is I want to control my investment to keep the exposure to 1% but the above comment about the waived minimum suggests that lending in £1000 blocks will no longer lend at £10 (1%). I don't actually want to redirect existing funds into the ISA or the new products on day one, I want to add new funds into the ISA and get a feel for it. I don't actually want to be lending at anything more than a 1% exposure so its not clear that I'll be able to control this in the new products or not by limiting the lend to £1000 blocks. I'm a little concerned that zopa is moving to greater exposure rate than I can control. Any ideas anyone, hopefully I am just a little confused or I'm about to be very disappointed. Don't worry. I am pretty sure Zopa Core is lending in the minimum unit of £10, but the minimum investment for new customer is £1000. For existing investors transferring the repayment, the minimum £1000 will be waived, but lending in the minimum unit of £10. Fact: or Zopa Access and Zopa Classic, investor can lend from as little as £10. For a £100 portfolio, each loan contract has more than 1% exposure @ £10.
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Greenwood2
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Post by Greenwood2 on Jun 1, 2017 6:26:03 GMT
But be aware if you put in £20,000, in one go it may be lent in £200 chunks.
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ashtondav
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Post by ashtondav on Jun 1, 2017 6:58:12 GMT
I would imagine Z have based their decision on the popularity of the Z+ product compared to the SG product. The interest rate penalty for the SG product is too onerous for me.
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ashtondav
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Post by ashtondav on Jun 1, 2017 7:05:09 GMT
But be aware if you put in £20,000, in one go it may be lent in £200 chunks. Er, yes, 1% in each loan?
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aju
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Post by aju on Jun 1, 2017 7:56:29 GMT
In the recent blog, blog.zopa.com/2017/05/25/introducing-the-zopa-ifisa-and-zopa-core/Zopa said ... 'From launch, investors will be able to send Access and / or Classic repayments into Core, and add new funds. Core, like Plus, will have a minimum investment of £1,000 to diversify your risk: this will be waived for existing customers moving their repayments across, but it’s important to remember that those customers with a waived minimum will have more than 1% exposure to each borrower and will have a higher chance of losing money.'
Trouble is I want to control my investment to keep the exposure to 1% but the above comment about the waived minimum suggests that lending in £1000 blocks will no longer lend at £10 (1%). I don't actually want to redirect existing funds into the ISA or the new products on day one, I want to add new funds into the ISA and get a feel for it. I don't actually want to be lending at anything more than a 1% exposure so its not clear that I'll be able to control this in the new products or not by limiting the lend to £1000 blocks. I'm a little concerned that zopa is moving to greater exposure rate than I can control. Any ideas anyone, hopefully I am just a little confused or I'm about to be very disappointed. Don't worry. I am pretty sure Zopa Core is lending in the minimum unit of £10, but the minimum investment for new customer is £1000. For existing investors transferring the repayment, the minimum £1000 will be waived, but lending in the minimum unit of £10. Fact: or Zopa Access and Zopa Classic, investor can lend from as little as £10. For a £100 portfolio, each loan contract has more than 1% exposure @ £10. Thanks, I can see what they mean now. That's made me feel much better about my strategy. I think defaults are inevitable so keeping them to the smallest amount is a useful safety net. I was happy to lend at higher exposure rates in classic with sg but now its being withdrawn i need to be more cautious i feel.
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aju
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Post by aju on Jun 1, 2017 8:04:40 GMT
But be aware if you put in £20,000, in one go it may be lent in £200 chunks. Although it's slower, I think, I wanted to lend 1000 at a time to kèep to £10 loans, defaults will still happen but the exposure level is minimised.
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Post by wyndstryke on Jun 1, 2017 13:27:44 GMT
Although it's slower, I think, I wanted to lend 1000 at a time to kèep to £10 loans, defaults will still happen but the exposure level is minimised. Yes, that'd be my approach too - add 1k each month instead of a single big investment. That way you get the best diversification (albeit at the cost of taking longer to lend it all out).
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aju
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Post by aju on Jun 1, 2017 15:26:37 GMT
I'm still clarifying with zopa but it seems that I may be able to lend £1999 and it be lent at £10 chunks, that means that I will be able to lend to core and plus ISA £1999 each if I play it right - I think thats will work - its a long time since I started lending from the new money queue so not sure how that works now.
Does anyone know if the incoming money gets a assigned to a queue and moves from the hold zone or stays in the hold zone and I will have to manage the queues separately. At the moment all relends are relent back into the existing product and should still be SG or plus until they change over later in the year the new ISA will be my only place I am lending to until I get all the 20k lent on both mine and my OH accounts.
Edit: Okay so zopa have confirmed that I can lend £1999 and it will not lend at a rate of £10 a loan only.
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