Greenwood2
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Post by Greenwood2 on Jun 30, 2017 6:31:06 GMT
Is anyone going to use this facility? How is it going to work? And what are the critical dates?
And experience so far once it starts.
Edit: I believe it starts on the 3rd, not the 1st for anyone with a trigger finger.
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Post by newlender on Jun 30, 2017 7:17:31 GMT
Well, I'll be up early on Monday to sell all my 'legacy' products and move them to the ISA. I really can't see why anyone would keep a taxable product when they can have the interest tax free. However, I did sell most of my Access loans two weeks ago to transfer to my ISA and it still hasn't all gone through so I'm not expecting a fast changeover. The news on car loans is a bit worrying - apparently these are being doled out like sweeties at the moment by the banks etc. in general and there is concern that this could be the next big financial issue, so I'm staying clear of the Plus ISA and sticking with Core.
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ashtondav
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Post by ashtondav on Jun 30, 2017 7:24:01 GMT
The concerns about cars are about PCP, not loans to individuals to buy cars. Completely different as Zopa perform and APPLY credit checks on applicants. Car dealers are less fussy as they want to sell a car not ensure loan payback, and they also think their residual values cover them.
also, of course, a Zopa "car" loan can be used for anything. In short, while there are always concerns about zopa the looming PCP scandal is not one of them.
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Greenwood2
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Post by Greenwood2 on Jun 30, 2017 7:25:10 GMT
newlender Are you worrying about chunk size when you transfer, and potential big individual losses?
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Post by newlender on Jun 30, 2017 9:04:03 GMT
Not really as I shall only be converting about £4K into ISA Core. If it were ISA Plus, that would be different, of course. I have quite a chunk in Investing Plus but I'll keep that going as I don't want to pay fees to sell and am fairly happy with the overall return despite defaults. I am aiming for about £10K into the ISA for this year - that will put my P2P exposure (including Seedrs) at a sensible % of my total portfolio.
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Post by newlender on Jun 30, 2017 9:16:22 GMT
Ashtondav - how many of your Z+ defaults are on car loans? I take your point about the different types of loan but it worries me a bit that you say that nobody checks what the money is spent on. Don't Zopa take a charge on the vehicle? (Yes, I was watching 'Can't Pay, we'll take it away' last night).
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Greenwood2
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Post by Greenwood2 on Jun 30, 2017 10:04:52 GMT
Zopa loans are all unsecured so no charges on anything.
Edit: But fraud is pursued (and debt collectors are used to recover defaults).
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ashtondav
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Post by ashtondav on Jun 30, 2017 10:30:10 GMT
Ashtondav - how many of your Z+ defaults are on car loans? I take your point about the different types of loan but it worries me a bit that you say that nobody checks what the money is spent on. Don't Zopa take a charge on the vehicle? (Yes, I was watching 'Can't Pay, we'll take it away' last night). Yes defaults are high on "car loans" but that is a separate issue to the PCP scandal which is emerging. Next year it wouldn't surprise me if "consolidate debts" is the highest defaulter on Z+ No charge is taken on the vehicle and no checks are made on what the money is spent on. Zopa don't care, as their "security" is the quality of their credit checking, and the "quality" of their borrower selection process. i don't know why Zopa don't take the car as security for the loan. It seems eminently sensible to me, but I suppose there must be some legal or administrative reason.
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Post by glocal on Jun 30, 2017 17:48:48 GMT
[...] Edit: I believe it starts on the 3rd, not the 1st for anyone with a trigger finger. According to the weekly Zopa update I just received it's now 'From mid-July, for one month'
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nairda
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Post by nairda on Jun 30, 2017 18:52:22 GMT
Am I right in assuming that by selling my Z+ loans, with or without the free offer, the reinvestment in the ISA will be new loans and the loan size will be determined by the size of the deposit, as it would be if it was just normal "new" money being transferred in.
If that is the case then I wonder how practical it will be to sell existing Z+ loans in <£2000 chunks in order to keep loans down to £10. I would hope the free sellout will apply no matter how many times loans are sold during the offer period.
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Greenwood2
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Post by Greenwood2 on Jun 30, 2017 20:21:32 GMT
[...] Edit: I believe it starts on the 3rd, not the 1st for anyone with a trigger finger. According to the weekly Zopa update I just received it's now 'From mid-July, for one month' Could you post a copy of that I don't seem to have got it. I wish they could make their mind up! Edit: I see they have changed the offer conditions. Could be a mess if some lenders don't realise it has changed. Now Says: 'The offer applies to loan sales requested from around mid July for a month (we will confirm these dates in advance) and provided the money is invested within 4 weeks of the offer end date.' Used to say: 'The offer applies to loan sales requested from 3rd - 31st July 2017 and provided the money is invested by 31st August 2017.'
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Post by glocal on Jun 30, 2017 20:59:01 GMT
Could you post a copy of that I don't seem to have got it. I wish they could make their mind up! Here it is: ======= Lending market update Thursday 29th June 2017 Expected returns Over the last 4 weeks we have matched loans to give projected returns of: Tick 4.26% in Zopa Core Tick 6.56% in Zopa Plus Tick 2.79% in Zopa Access Tick 3.71% in Zopa Classic Total amount lent by Zopa's investors Our investors lent out £77.3m through our platform over the last 4 weeks. Queuing and matching times Average times investors spent in queuing and matching before completing each stage last week: Queue Matching Access 0 days 5 days Classic 6 days 1 day Core 2 days 5 days Plus 9 days 2 days These numbers reflect the last 7 days and cover new funds of at least £10. Money put into Zopa today may experience different queuing and matching times. Coming soon: 1% loan sale fee rebate when selling into your ISA From mid-July, for one month, we will offer a rebate on the 1% loan sale fee for Core, Plus, and Classic loans sold to move into your ISA. Keep an eye on this newsletter for more information. Remember, if the loans you're selling are worth less than equivalent loans today, you'll have to pay a market rate adjustment to the purchasing investor. This will be shown during the sale process.
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Post by misotu on Jul 1, 2017 8:52:41 GMT
Am I right in assuming that by selling my Z+ loans, with or without the free offer, the reinvestment in the ISA will be new loans and the loan size will be determined by the size of the deposit, as it would be if it was just normal "new" money being transferred in. If that is the case then I wonder how practical it will be to sell existing Z+ loans in <£2000 chunks in order to keep loans down to £10. I would hope the free sellout will apply no matter how many times loans are sold during the offer period. Yes, I would like them to clarify that the free sellout will apply on multiple sales within the offer period, as I am drip-feeding too. From the wording, it sounds that way but I suppose I'm going to have to email for confirmation again. I'm expecting funds to move rapidly though as they'll obviously be RRing the sold loans to ISA lenders. I already have 5 RR Safeguard loans on my ISA Core loanbook.
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Post by misotu on Jul 1, 2017 9:57:29 GMT
Just received my weekly update with the fee-free selling details and, as is usual with Zopa, there is a sting in the tail of their offer. My email contains a link to the terms and conditions here
The terms of the offer mean that the money has to be reinvested in your Zopa ISA and lent out to borrowers within four weeks of the offer end date. I realise that they don't want people using the ISA offer to extract funds from Zopa fee-free for another purpose, but this set-up is needlessly restrictive because it: a) Discriminates against those drip-feeding in order to maintain consistent diversification and b) makes the whole offer dependent on factors outside the lender's control - ie lending speed So people need to understand that if they take advantage of the offer they may still end up paying the 1% through no fault of their own. Have to say that I'm pretty disappointed by this. For drip-feeders, the offer will deliver little benefit and obviously it'll be pretty upsetting if lending speeds tank, especially since those recycled funds will not be prioritised over brand new money. I'll be lucky to get 15% of my holding transferred fee-free. Here's Zopa's worked example:
For example, you might request to sell £5,000 from Zopa Classic on 25th July. After fees, you receive £4,925 net of the £50 loan sale fee & £25 deduction due to current loan market conditions (e.g. if the interest rate on loans you wish to sell is lower than the current market rates: read more). You invest £4,925 into ISA Core, and £4,900 is invested by 31st August 2017. You will receive a rebate of £49.49 (£4,900 * 1.01%).
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Post by misotu on Jul 1, 2017 10:41:40 GMT
OK, did some more thinking about the terms. The main issue for me is that the terms as they stand discriminate heavily against small lenders sensibly drip-feeding funds to get consistent diversification. Lenders already lending in chunks of £300 are going to have their ISA allowance done quite easily in the offer period, fee-free. At present lending speeds and £10 loans I'll struggle to get £5000 transferred over, and then only by running the risk of falling foul of the four-week deadline and being charged 1%.
The second issue is the arbitrary nature of making the offer conditional on lending speed. I understand that there has to be a cut-off point, but four weeks seems unnecessarily tight given that this is a new lending situation and a little unpredictable. Zopa's own worked example shows a lender receiving only a partial rebate of the 1% sales fee. I really don't think that this is acceptable or reasonable. The refund of fees could be done in several tranches, if necessary, to give lenders confidence that, provided the funds go into the ISA within the offer period and are not withdrawn, they will not be charged a fee.
Since the offer dates have still not been confirmed, I've written to Zopa to ask them to consider treating smaller lenders more equitably and being more flexible on both offer period and cut-off dates. Not holding myy breath or anything, but there is clearly still room for flexibility.
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