Comments on: Spooked by my bad debts at Zopa http://monevator.com/2009/05/06/spooked-by-my-bad-debts-at-zopa/ Make more money, invest profitably, retire early Fri, 10 Feb 2012 22:06:19 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: The Investor http://monevator.com/2009/05/06/spooked-by-my-bad-debts-at-zopa/comment-page-1/#comment-78477 The Investor Sat, 07 May 2011 12:45:51 +0000 http://monevator.com/?p=1651#comment-78477 Interesting. I also note that since I wrote this, Zopa lenders can now tender their loan portfolios back to the market to get their money back. I might try doing this, for interest. Interesting. I also note that since I wrote this, Zopa lenders can now tender their loan portfolios back to the market to get their money back.

I might try doing this, for interest.

]]> By: Sceptical http://monevator.com/2009/05/06/spooked-by-my-bad-debts-at-zopa/comment-page-1/#comment-78472 Sceptical Sat, 07 May 2011 12:07:15 +0000 http://monevator.com/?p=1651#comment-78472 In regards to the following paragraph: "In particular borrowers can repay loans at any time without penalty. This is terrible from a lender’s point of view because it skews the risk/reward, and opens up a theoretical tendency for better prospects to pay up and exit their loans while poorer ones accumulate." This is due to a requirement of the Consumer Credit Act 1974 and is not by choice of Zopa or any other high street lender. Thus, the switch and ditch routine is common in the financial industry as can be seen with 0% balance transfer offers on credit cards, etc. In regards to the following paragraph:

“In particular borrowers can repay loans at any time without penalty. This is terrible from a lender’s point of view because it skews the risk/reward, and opens up a theoretical tendency for better prospects to pay up and exit their loans while poorer ones accumulate.”

This is due to a requirement of the Consumer Credit Act 1974 and is not by choice of Zopa or any other high street lender. Thus, the switch and ditch routine is common in the financial industry as can be seen with 0% balance transfer offers on credit cards, etc.

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