Thursday, 26 March 2015

How long does it take to get your money lent out on Zopa- far too long in my opinion

I love peer to peer lending sites because they offer higher interest rates than current savings accounts and ISAs here in the UK. I have already talked about RateSetter recently and my experience with it. Zopa is a similar site and one I have more experience with. One thing that really frustrates me about this site is the length of time it takes to invest new funds. By new funds I mean money which has been deposited via your bank account or debit card.

I deposited a small amount of cash, £40 to be exact on the 17th March. The money was available in my Zopa account instantly, far quicker than it would be in my RateSetter account. I checked the current rate of lending for the loans up to 3 years and seen that there was an average of over 230k being lent per day with 1.3m queued for lending. Based on this I calculated that my money would be lent out within 6 days. Well here I am 9 days later and my money is still not lent out.

Is it such a big problem that the money is not assigned to a borrower for such a long period of time? In my opinion yes it is. Basically it is dead money earning no interest and for someone who likes to invest this is not good news. The quicker the money is lent out the better. I am hoping that I will have my money assigned to a loan by tomorrow and that will be day 10. I have checked my progress in the lending queue and I am at 83%. I was at 64% last night so I have moved 19% in a day so I am hoping for the same movement tomorrow. Of course it is important to note that money that comes from loan repayments goes straight to the front of the loan queue as far as I am aware so if lots of lenders have their repayments being recycled I may have to wait longer.

This bothers me because the site is growing all the time and more people are investing which means more repayments being recycled meaning in the future it could take even longer to lend new money. I am not sure how this problem could be solved.

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