The major peer-to-peer lenders | Money | The Guardian
Zopa's success has largely been down to its strong risk controls. Default rate to date: None so far, expected rate lower than pc He said a fairer comparison was the returns made from corporate ordendelsantosepulcro.info Reviews from Zopa Limited employees about Zopa Limited culture, salaries, benefits, work-life balance, management, job security, and more. 39 Zopa reviews. A free inside look at company reviews and salaries posted anonymously by employees.
Peer-to-peer lenders: Zopa's rivals compared - Telegraph
Average return for lenders: Money spread among all borrowers, regardless of their credit risk Fund to cover bad debts: Yes The key differential here is RateSetter's "provision fund" to cover bad debts. This is paid for by the borrowers, via an additional rate charge.
Lenders all receive the same rate, set by the market on the site on any given day. However, the interest rate paid by the borrowers depends on their credit risk; those deemed a higher risk pay a higher rate.
Martin Lewis: What I earned from peer-to-peer savings - Telegraph
These additional payments are paid into the provision fund. This fund isn't guaranteed to cover all defaults in full. Currently, it covers six times the expected losses; if defaults exceed this, lenders will lose out.
But if defaults are less, surplus money is paid back to lenders, via a bonus. Peter Behrens, a co-founder, said: Only about 10pc of applications get through at present. We think lenders want a market-beating rate, but don't want to take on the additional risk of vetting individual borrowers. August 13 Amount lent to date: Expected default rate of between 0. The sites themselves profit via a fee.
Martin Lewis: What I earned from peer-to-peer savings
Just like normal savings, you pay income tax on the interest. A basic-rate taxpayer pays 20 per cent, higher-rate 40 per cent, etc. If it appeals, I suggest you start by just dipping your toe in. This year it changed how it works, so it feels just like putting money in normal fixed-rate savings.
You choose how much cash to lock away, for how long, and get a fixed rate. Money lent so far: Unlent cash kept in: How does this work?
The Safeguard Fund is then owed the bad debt, and uses a third party to try to recover it. This does dampen the returns a little, as the Safeguard contribution is deliberately over-funded. What could go wrong? Though the third party would still chase the debts for you. How quickly can you withdraw your money?
Rates are dropping, though. Quoted expected net return: Money Lent so far: Either use bespoke lending: Or spread the risk: