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Wedding season has begun

Posted by Mat at 3:14 pm

(C)JENNSTARKPHOTOGRAPHERS 2011

With wedding season officially under way, it can only mean one thing for many couples that are planning their special day, STRESS.

With so much to plan and pay for nowadays, this happiest of days can quickly turn into a financial nightmare and causes stress for everyone involved.

Depending on which magazines you read, the average cost of a wedding in the UK is approximately £22,000; that is no small chunk of change for most couples. Also an increasing number of couples are having to go to the “Bank of Mum and Dad” to help pay for their big day, with recent research finding that 53% share the costs with parents, 31% pay for it themselves and a lucky 11% have the day paid for entirely.

The biggest wedding expense, according to You & Your Wedding Magazine is entertaining guests with an average reception costing £7,382. The second highest expense is the honeymoon costing £2,935 and the third most costly item is the engagement ring, with the average person spending £1,730 on a ring and proposal.

Many couples feel that they are put under pressure by wedding suppliers to spend more than they originally budgeted for, on additional things like extra flowers, extra decorations, little gifts for guests at tables or extra bridesmaid dresses when two or three is probably sufficient. Sometimes less is more, which can really help bring down the costs especially if you are able to do a lot of the decorations, food/drink and flower arrangements yourself.

Here a few handy tips that we have put together to help you bring down some of the costs of the big day.

• Choose a weekday if you can: It will save you a lot of money. Venues and vendors are normally happy to give discounts to weekday weddings
• Look for vendors who are just starting out and establishing their portfolios, whose approach you like. Friends can usually refer you to someone who’s just starting out in photography, DJ-ing, or cake making. You’re supporting someone in their creative endeavours, and their prices are usually more than fair
• You don’t have to do everything on the cheap – just be realistic with yourself. Given your budget, what are some areas you absolutely cannot imagine cutting corners, and what are some areas you don’t mind as much about?
• Environmentally friendly ideas can save you money too – printing out RSVP cards, programmes, menus, etc. can quickly add up
• Let your bridesmaids be creative – give them a colour of their choice, and let them buy their own dresses that they can wear over and over again – everyone wins

Arriving back after your Honeymoon with large credit-card bills is not what any couple needs. So if you do decide to borrow money for your wedding, plan it carefully, stick to your budget and consider a loan with a low APR. With a loan you pay off some of the money you owe every month. This will help reduce the amount of potential debt in the future and stop you ending up with a credit card balance you don’t pay off. It is also important to look at options where you can pay your loan off early at no extra cost in case your financial situation improves.

Since 2005, Zopa savers have helped over 1,130 dream weddings come true. Our wedding loans arranged to date total over £5.6m, and so far in 2013 we have arranged 206 loans for wedding expenses. With August being the most popular month for weddings in the UK, we are looking forward to helping more couples plan and celebrate their big day.

We wish all those couples getting married this year the very best of luck and please do share any stories with us about your wedding as we would love to hear and see how it all went!

Please leave us a comment here or contact us on stories@zopa.com

Posted in Borrowers, General, Loans | No Comments »

Zopa Launches Loans Under 5% APR

Posted by Mat at 8:23 am

We are proud to announce that we are helping sensible borrowers get a good deal by cutting our loan rates to 4.9% Rep. APR for loans between £7,500 and £10,000 over 3 years.

This new rate is currently the cheapest on the unsecured personal loans market.

The 4.9% Rep. APR rate offer will run until Wednesday 22nd May. Borrowers looking for a loan over 4 or 5 years for £7,500 to £10,000 will be offered a loan at 5.1% Rep. APR. To borrow you need to have a good credit rating and can get a personalised soft-search quote which does not impact your credit score. The rate you are quoted will be the final APR you will pay once your loan has been approved. As always, we are rewarding Zopa customers for paying loans back early with no early repayment fees.

Plus with Zopa you are borrowing from other people like you. Your loan is funded by UK savers lending their money to you through Zopa’s peer-to-peer model. A nicer alternative than going to your bank.

Zopa rewards borrowers and savers who are good with their money. We believe that sensible people who can manage their repayments should be offered a great loan rate. By being the first lender in the UK to offer 4.9% Rep. APR loans between £7,500 -£10,000 we are going even further to ensure Zopa is driving the costs of loans down and providing real value to our customers.

If you are interested in finding out if you would qualify for the new offer then do a soft search online for a Zopa loan.

Posted in Borrowers, Loans | No Comments »

Where does £300m go?

Posted by Mat at 5:26 pm

After reaching over £300m lent to UK borrowers, we thought breaking down that figure would be a helpful way to show how the loans have been used and where Zopa saver’s money has gone.

Nearly 50%, £145m has been spent on modes of transport with the majority of loans being used for cars. This has helped people get to work and improve their family transport situations.

The second highest reason for loans is for paying off credit cards, which has helped people manage their finances and become more responsible with their money.

The third most popular reason for a Zopa loan is to help with home improvements. We know that a person’s home is their castle but with over £58m being spent on home improvements, our members have a serious appetite for DIY and investing in their properties for the future.

Other interesting reasons for loans include helping pay for wedding expenses, land purchases, art, education fees and even the odd boat.

Take a look at the full £300m breakdown below.

Posted in Borrowers, General, P2P | 2 Comments »

The £300,000,000 question?

Posted by Beth at 9:50 am

It’s not every day that we hit a milestone as a company and community, but we thought we would stop to take a short break to celebrate hitting £300 million lent since we started.

Yes you heard us correctly, £300,000,000.

This is a huge figure, and we are the first peer-to-peer lender in Europe to reach it. We could not have done this without the continuing support from both our savers and borrowers, who trust us to match-up and reward responsible people who are good with their money.

We have over 40k savers who have lent collectively £300 million to help people buy new cars, upgrade their homes, propose to their loved ones and get married, buy boats and even re-train with educational courses.

We are always looking at new ways to provide a better service and this is why we have recently introduced the Zopa Safeguard offer to help reward people who are good with money. We have introduced the Safeguard after taking feedback from our customers in order to provide a safer way grow your savings by lending.

Here you can see some of the Zopa team celebrating the big THREE-O-O, but to give something back to you, we are giving away three £100 Amazon gift vouchers for the best images around what 300 means to you. Post them on our Facebook page and we will look to draw three winners in the coming week from the best submissions.

Thank you again for continuing to grow your savings and borrow with Zopa and here’s looking forward to half a billion pounds in the very near future!

Zopa celebrates hitting £300 million

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Introducing: the Zopa Safeguard offer

Posted by Beth at 10:47 am

Did you know Zopa savers have almost lent £300 million to sensible borrowers since we started? But even with a 200% increase in savers joining us this year, we think Zopa can do more to help UK savers to protect and grow their savings. So we are excited to launch our Safeguard offer, an exciting new tool to help Zopa savers lend money safely, quickly and earn great returns.

We’ve listened to your feedback to offer a new and easier way to lend with Zopa, so as a saver you can now:

1. Lend safely knowing your money is protected by the new Zopa Safeguard

2. Earn the best returns available by offering new tracker rates to give you the best overall rate across the markets

Try Safeguard offer

Why choose the Safeguard offer?

1. Lend with peace of mind

We are introducing the Safeguard offer so you can lend-to-save safely, quickly and earn great returns. Zopa has created the Safeguard in order for you to get back all the money you put into Zopa plus interest on your lending without having to worry about a borrower not being able to pay you back.

You earn interest by lending to sensible borrowers with excellent credit-ratings through Zopa. Our expert loans team uses a wide range of careful checks to make sure our borrowers are responsible and can afford to repay their loans. As a result, Zopa has a higher repayment success rate from borrowers than any other peer-to-peer lender or the high street banks, with 40% of borrowers paying off their loan early at no extra cost.

In the rare event where one of your borrowers can’t pay you back, perhaps due to redundancy or illness, the Zopa Safeguard has been created to step in and protect your money should this happen. By doing this, the Safeguard is now available to give you back all the money plus the interest owed to you.

What is the Zopa Safeguard?

The Zopa Safeguard is a fund held in trust by a not-for-profit organisation, which means Zopa has no rights to the money in it. If a borrower you lend to through the Safeguard offer is then unable to pay back their loan, the Zopa Safeguard makes up the money owed to you.

The Zopa Safeguard isn’t an insurance or guarantee product, it’s a dedicated fund to help protect you against potential risks and is just good sense for both savers and borrowers looking for a better deal.

2. Earn the best return on your savings

Our priority is to help you save and lend your money efficiently. You can earn market-leading returns from lending your money with Zopa, but if you have money in your Zopa holding account or waiting to be lent this won’t be earning interest. To get your money working harder for you, simply choose to lend at the new tracker rates through the Safeguard offer.

This means the rates you are offering to borrowers will follow the UK personal loan industry and deliver you the best return available at any given time. As rates go up in the personal loans market, the rate you are offering will go up and your returns will increase. When rates go down there is a minimum threshold in the tracker rates to ensure you still earn a better return than you can at a bank.

We are very excited about the Safeguard and what it will mean for our members. You can find out more about how you can benefit as a saver on How Lending Works.

To start earning great returns on your savings, simply start lending with the Safeguard offer!

Posted in General | 4 Comments »

Moneywise shortlists Zopa in 2013 Customer Service Awards

Posted by Beth at 5:24 pm

“Good customer service is like gold dust.” We couldn’t agree more with Moneywise on that statement. You may have seen our requests over the past few months about voting for us in the 2013 Moneywise Customer Service Awards. Well, if you did, we really appreciate you taking the time to vote and we value your feedback. With your help we have been SHORTLISTED for the Most Trusted Loans Provider 2013 award.

This year, Moneywise are once again looking for the nation’s most trusted finance providers in a range of product categories which include mortgages, credit cards, home insurance, savings accounts and personal loans. We could not have made the cut without our loyal members voting for us again. This is an award that means a lot to us here at Zopa HQ, as we have won it back-to-back for the past three years and really hope that with your support and feedback, we can make it a fourth.

The winners will be announced on June 13th, so we will let you know how we get on. We are up against some stiff competition, so it is now a case of everyone keeping their fingers crossed. All the judging is made by reviewing customer feedback, which is why this award means so much to us, as we are always working to improve our offers by continuing to be a trusted and award winning peer-to-peer lending service.

To see the full list of companies shortlisted please check out the article.

If you are keen to share your experience and story and have taken out a Zopa loan for something exciting, please drop us a line with your story at stories@zopa.com as our PR team would love to hear from you.

Posted in awards | No Comments »

Lender Funding Dates

Posted by Beth at 12:50 pm

With Easter approaching, it’s a great time to top up your Zopa account and continue to grow your savings through lending to the UK’s most trusted borrowers.

The Zopa offices will be closed over the Easter bank holiday, so make sure you add your funds in good time to make the most of those looking for a loan over the long weekend. Here is a calendar of when faster payment transfers should reach Zopa accounts over Easter.

To enlarge the table below, please click on it.

Posted in General | No Comments »

Vote for Zopa!

Posted by Beth at 10:32 am

Are you happy with the service you’ve received through Zopa?

Moneywise are currently running a national survey which gives consumers the chance to vote for their favourite financial products.

Zopa has been voted the most trusted loans provider for 3 years running and we’d really appreciate your vote this year.

Plus you could win £1,000, courtesy of Moneywise!

Vote here

Posted in General | No Comments »

Lending Account Update

Posted by Beth at 10:30 am

We’re making improvements to the lending offer page to help savers choose their rates more easily.

Amber circles will now show in non-A* markets when both the participation is low and the estimated pre-tax return is lower than you could earn by lending in the A* markets.

This is to help inform savers which rates in the non-A* markets may give similar or higher returns than the A* markets, even though the money may take longer to lend out.

Posted in General | No Comments »

Lending to small businesses

Posted by Beth at 2:43 pm

We are pleased to announce that we will be taking part in the Government’s Business Finance Partnership scheme to help small businesses.

As part of this scheme, the Government will contribute up to £10million to help Zopa lend to small businesses over the coming years. We hope the additional money being lent through Zopa will help thousands of sole traders to further their business and help build the economy.

We’re really excited about this news and will be developing a process that is tailored for sole traders over the coming months – we’ll keep you posted.

Posted in General | No Comments »

Lender funding dates

Posted by Beth at 11:03 am

The festive period is fast approaching and January is a great month to lend more to the UK’s safest borrowers and grow your savings.

To get your funds ready in time, here’s when faster payment transfers should reach Zopa accounts over Christmas. Please note, Zopa offices will be closed on the bank holidays.

To enlarge the table below please click on it.

Posted in General | No Comments »

The lending offer page is having a makeover

Posted by Matt at 6:05 pm

We are making some changes to the lending offer page so Zopa savers can more easily choose and monitor their rates.

The usability of the lending rate dropdown is improved so you don’t need to choose a rate and then check whether it is competitive or not.  Visually, the most the striking change is the colour coding of lending offer rates:

• Green means you would have participated in a majority of loans in the last month and so you can expect to lend your money quickly.
•  Amber indicates slow lending because your participation is low.
•  Red means you are very unlikely to lend any money or your rate is very low and you could get a better rate and lend just as quickly.

Zopa is a dynamic market place and lending rates are influenced by the supply and demand from lenders and borrowers. In the last few months thousands of new Zopa lenders have joined while the competition for borrowers with banks and other lenders has intensified. To make sure you continue to get the return you want and are not disappointed by slow lending you should review your lending offer regularly.

We are adding an estimate of how long it will take you to lend your money across all the markets you are participating in.  This estimate is personalised to you and the rates you’ve chosen but it is of course only approximate.  Lender participation rates will be displayed more prominently to give you an indication of the speed of lending in each market.  Lending forecasts of the amount of money which could be lent per market will be removed as many Zopa savers felt they caused confusion.

We are adding an expected pre-tax return after fees and defaults. How fast you lend is important and the more quickly your money is put to work the more interest you will earn.   However, you should always ensure the rate you offer takes into account the small risk of default and this change will allow you to more easily compare the pre-tax net return you can expect from each market.  A* is our largest and safest market and the rate you set in A or B should give you as least a good a net return as A*.  You will now receive a warning if this is not the case, although you are free set any offer rate you wish.

Finally, we are also adding some information on how the banks and other lenders are advertising to the safest borrowers on price comparison sites.  This is to give more insight into what borrowers are looking for and to show lenders that they are competing against banks as well as other Zopa lenders.

Posted in Changes, Design, General, Lenders | 1 Comment »

More than one way to save for retirement

Posted by Beth at 3:17 pm

Statistics out recently confirmed that fewer people in Britain are saving in a pension than ever before. In fact, only 46% of UK adults are saving enough to fund even a reasonable standard of living in retirement, and this number is down by 8% over just the last two years. But given all that has happened to pensions over the last 15 years, this situation is not that surprising.

Slashed pension tax breaks, scandals around high charges, employers shutting final salary schemes and poor value offered by annuities when your savings are turned to income in retirement – all these things have contributed to Britain falling out of love with pensions.

But we can’t just stick our heads in the sand and try to forget that we are all living longer than ever. Saving for retirement has never been more important.

Savers at all stages of life are attracted to Zopa by the low risk, high rates of interest that easily beat a savings account. But research just completed has revealed that retirement planning has become a very popular reason for using Zopa.

In fact, 32% of people lending at Zopa are doing so specifically as a way to save towards their future retirement or to top up their monthly income having already retired. At 37%, only “saving for a rainy day” scores higher than retirement planning as the most popular reason for lending. Other reasons stated included saving for a child’s education fees or a son’s or daughter’s wedding.

Of those savers using Zopa for retirement planning purposes, 65% are doing so pre-retirement to help build up their retirement saving pot and 35% are already retired and are using Zopa lending to top up their monthly income.

This makes perfect sense. Zopa attracts people who are sensible and responsible with their money and who actively seek out a better deal, whether they are credit worthy borrowers or savers willing to lend. Using Zopa to save for retirement or once retired to supplement monthly income is smart for a number of reasons:

Great returns

Savers lending through Zopa have enjoyed attractive average returns of 5.5% p.a. over the latest 12 months (after charges and defaults). Given that even the rates on the very best Cash ISA have been well below this and that returns on equity-based ISAs and pensions have struggled to even be a positive number, Zopa members have every right to feel pleased with themselves.

Flexible monthly income

Rather than tying up money for decades in a pension, with Zopa you receive monthly repayments of capital and interest which you can automatically relend to grow your funds further or withdraw to use as income. So savers can easily alter how they use Zopa as they approach retirement.

A fairer deal

Most people using a pension will be forced to buy an annuity when they retire. This means that prevailing annuity rates at the time you retire will control how much you get. Annuity rates have been far from appealing for some time, and bigger economic issues are likely to drive them further down rather than up. On top of this, a big concern for many is that when they die, the money in the annuity is gone – there is nothing left to leave to your family. With Zopa you can choose your interest rates and know that you can leave your money to your family or friends as part of your estate.

Of course, the best planning for retirement should involve a good mix of solutions, with appropriate diversification. The research amongst Zopa’s members has shown that this instinct has been followed, and that using Zopa sits sensibly within other arrangements, including ISAs, property, some stocks and shares, and of course company and personal pensions. Zopa members should be congratulated for not only taking advantage of the great rates available, but also the very clever and sensible ways they are using what Zopa offers within their wider financial planning.

Posted in General | No Comments »

The ZOPA Part 4 – heads & tails

Posted by Matt at 6:29 pm

Zopa operates an open market place where borrowers look for low cost loans and lenders seek high returns. As with any price discovery process there will be some volatility in the rates participants get as they seek agreement. In any given month there will be a small number of loans agreed that are at exceptionally competitive rates (the head of the ZOPA) but also a small number of larger loans agreed that incorporate lending offers at high rates (the tail of the ZOPA). The extent of these head and tail regions can change from week to week and month to month because they are driven by outliers. The main body of the ZOPA however is where most of the action occurs and has been relatively stable, varying rather slowly over time.

The new ZOPA is a measure of actual market activity, based on the last 30 days of actual loans reserved and disbursed and is updated daily. It cannot be used to predict the future with certainty but it can be used to forecast how fast your money will be lent out with some statistical confidence. To improve our level of confidence we need to chop off the outliers; the head and the tail. As a practical example, there is little benefit setting your rate at 5.6% in the A* Shorter market to be sure of participating in a 100% of loans when you can get 5.9% and still participate in 99% on average.

Deciding on how to define the head and tail regions depends very much on how frequently you, the lender, are prepared to adjust your rates. Some Zopa lenders check their offers daily while others check what’s going on every month or two. However, the typical lender logs in and checks their lending offer about once a week and based on data from the first 6 months of this year we are defining the ZOPA as being between 99% and 20% participation. This produces a good balance between making sure you will participate in loans over the next week at either end of the ZOPA while still getting the best rates available.

One final point – the lending forecast is to 2 decimal places and is not rounded to the nearest £10 even though you can only lend in £10 units. We’ve debated this but have left it like that because we feel it emphasises these figures are averages over time and not to-the-£ predictions. If the lending forecast is £5.50 then it doesn’t mean you will lend out £5.50 in the next week but you would lend out £5.50 on average over several weeks. Another way of thinking about it is you have a 55% chance of lending out £10 in the next week. It’s a small point and maybe it will confuse people after all, but let’s see how it goes.

Posted in Design, General, Lenders, New stuff | 4 Comments »

The ZOPA Part 3 – your place in the queue

Posted by Matt at 5:30 pm

This post is aimed at those lenders who are interested in the technical details behind matching borrowers with lenders. The change to the matching mechanism discussed here is a subtle point and only makes a marginal difference to how fast a lender’s money is lent out but, for the team at Zopa these details are important so I’ve written this post to share our thinking.

The Zopa marketplace matches lender offers with borrower loan requests by putting lender offers into a queue; there is a different queue for each market. When a borrower requests a personalised quote for a loan the system takes offers off the queue until it the requested loan amount is met. The borrower’s quoted APR is an average of the rates offered by lenders participating in the loan.

The lending offer queue is ordered by:

• Interest rate (cheapest to most expensive) and then by
• The time the interest rate was last set in that market

The second criterion is changing to use a round robin queue order. This means that as soon as a lending offer in a market is matched with a borrower’s loan request the offer goes to the back of the queue. Because there are more personalised quotes than actual loan applications the queue position changes very frequently and all lenders have an equal chance of participating in loans.

This change makes a difference only at the margins but is a step toward ensuring an equitable distribution of loans across all lenders which should make the market that little bit more efficient – prices should be driven by consideration of risk and reward and by the forces of supply and demand; not by the micro-structure of our market place.
The only difference you will see on the lending offer page is the Minimum Loan Size column will disappear (this currently appears when you click on more info button). This figure made sense when your queue position was fixed but not when it is constantly changing. Also, the MLS was an important figure in calculation of the ZOPA but it plays no role in the new method described in part 2 of this blog series.

Posted in Changes, General, Lenders, New stuff, Technology | 10 Comments »