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Zopa is Hitting its Targets (Just About)
Recently, Zopa, the P2P lending website that started it all, changed the mix of loans that lenders will have their money allocated to, so that they can get higher rates. At the same time, it removed its rate promise, which means that you could potentially get less than the quoted interest rates.
However, Zopa said it was confident that its new algorithm would ensure that lenders would get the slightly higher advertised rates of 4% when lending for three years and 5.1% when lending for five years.
Zopa is on track
You can read more on what it said back then here. Now, Zopa has just announced that, within a few weeks of the change, lenders have been achieving the average rate over three years is 4.1%, slightly ahead of target.
Over five years, it's a fraction below target at 5.05%. However, Zopa reminded us that it had old loans still to process as the changes occurred. It is confident that by the end of January the average rates will be above those that were advertised.
If some individuals are left with lower rates at the end of the month, Zopa seems confident it will make it up to those lenders, provided they re-lend their money on a regular basis.
From 9 February, Zopa will start publishing its past projections and figures showing whether it has met those targets.
Zopa is the oldest peer-to-peer lending website in the world. It will turn ten this year. Its borrowers are “responsible” people and it has low bad-debt rates. It also has a provision fund with enough money set aside to cover expected bad debts.
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