Zopa loans. Any good or are they bad?

[cheezemonkhai]

Makes perfect sense actually. Like car insurance.

You show that you can drive well, and not get into accidents, and your cost to insure comes down. Same applies here.

No history = higher risk

That bit I can see makes sense, but I've seen cases where a no history is worse than a history where people don't always pay back.

That is the bit I think is nuts.

Not that car insurance should ever be a good model for anything IMHO.

[Babs]

Well, true... but at least a "chequered" credit history will show at least some repayments

[Loz]

My brother has never had a loan for anything & has always saved up for what he wants. He and his girlfriend have started looking to buy their 1st house together (both in their early 30's) and have been living together renting a flat for 6+ years.

Because they've never had a loan/mortgage they are constantly being turned down because they don't have a good credit score as they've never had a loan to pay back.. How stupid is that!!! Surely they should be better placed as they've shown they are able to save for purchases?

Agree, the company can't assess the risk. I am the same, I have never loaned money, I have savings and I don't buy things I can't afford. However I have a phone contract and several credit cards which direct debit straight from my bank, as such I have a good credit rating. You can still be sensible and build yourself a credit rating - the key thing is it will be GOOD!

[Babs]

Exactly Loz - that's the easiest thing to do!

I pay for everything on credit card, and pay it off when I get home straight away. It's far safer, to boot!

[JJRS]

I am a lender on zopa so far only had 2 bad loans. Back in the day when they had the listings the return on some loans where 15%+ apr which for me was golden,

But I love the idea and would use zopa myself If I ever needed a loan

You may have even lent me some money, I had a loan from Zopa Maketplace. IRC it was about 13%, paid it off after 11 months. It was great!

Though, now questionable. I had really quite a poor credit rating at the time. My credit rating is now "good" - 850 points with credit expert.

Yet I can't borrow from Zopa at the moment, because my credit file isn't good enough!

If the market place was still open I probably would have changed cars already! Maybe it's a good thing for me now.

Edited 3 June, 2012 by JJRS