Interested in doing more with your money?

Blatant advert for a site that will do nothing for you in money terms....but at this time of year is that really the most important thing?

Some background: I discovered ZOPA several years ago.  It's a marriage bureau between people needing a loan and others with some spare cash and what really appealed is that it cuts out banks from the equation.  So you put £x up there pick a lending market to lend to, in chunks of £10 or more, at a rate judged by what others are lending at and the site does the rest for you.  So, if you put up £100 to A grade borrowers over 36 months at £10 a time, you might go for 6% pa, and your £100 is then lent to 10 different borrowers.

Not enough space to describe the rest but as well as earning over 7% pa for over 4 years now it's great to know that my money is going to help people out and not the bank or mystery companies they invest in.

The real reason for this posting though is that there's another site doing the same thing but you make 0% and it's even better than ZOPA. You lend to specific small businesses all over the world in developing countries in multiples of £15.  If nothing else have a look at lendingwithcare.org and even if it's not for you, you might know someone who would be interested in lending for 0% in which case you can buy them a gift voucher for Christmas.

Comments
ShirleyM's picture

Thanks for the links, Paul

ShirleyM | | Permalink

I didn't know anything like that existed.

thisistibi's picture

I wondered

thisistibi | | Permalink

Thanks, I wondered about using this for investment return.  What rate of bad debts do you see?

Paul Scholes's picture

thisistibi

Paul Scholes | | Permalink

Hi - I presume you mean ZOPA rather than lendingwithcare.  I've just looked and, in over 5 years, (thought it was 4) I've lost 1.3% in bad debts from the money I have in, but considering that I've turned this money over two & a half times the actual rate of bad debt is .5 to .6%.

I have to say however that probably over half of these were in a year or two when I lent to the "Y" youth market, where the typical rate was 9-10%, plus I now lend @ £50 per person, which is riskier but the money gets lent out quicker.

As you've gathered this is not a deposit account but I've made way over my mortgage rate and it's helping ordinary people not financial institutions.

thisistibi's picture

Thanks

thisistibi | | Permalink

Paul Scholes wrote:

Hi - I presume you mean ZOPA rather than lendingwithcare.  I've just looked and, in over 5 years, (thought it was 4) I've lost 1.3% in bad debts from the money I have in, but considering that I've turned this money over two & a half times the actual rate of bad debt is .5 to .6%.

I have to say however that probably over half of these were in a year or two when I lent to the "Y" youth market, where the typical rate was 9-10%, plus I now lend @ £50 per person, which is riskier but the money gets lent out quicker.

As you've gathered this is not a deposit account but I've made way over my mortgage rate and it's helping ordinary people not financial institutions.

Thanks for this.  Personally I don't care who it's helping, but I take the point.  I spent some time researching this and the views are mixed to say the least.  Some people lose money overall - so you may be luckier than others.  I think I will give it a miss for now, but maybe when the market has matured I might return...

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