If you had £500,000 cash

[WotNxt]

Any of you guys use Zopa to invest your money?

I reckon there could be quite a high demand (and therefore good rates of interest to be had) due to the sub-prime meltdown.

I keep meaning to get my ID sorted out so I can complete my sign up - will get around to it eventually ...

[MrRobin]

What kind of guarantees does zopa give? Surely if you're lending to sub primes you're just as at risk as loosing your money as all the big lenders??

[mace]

Similar concept to sub-prime

What kind of guarantees does zopa give? Surely if you're lending to sub primes you're just as at risk as loosing your money as all the big lenders??

Zopa splits your investment in to chunks which it sells to debtors. By spreading the risk, the theory is that you won't lose all of your money. The credit crunch proves that you can still lose a lot of money, however.

[sasguru]

What kind of guarantees does zopa give? Surely if you're lending to sub primes you're just as at risk as loosing your money as all the big lenders??

You can specify the credit rating of the people you lend to. They claim an average return is 7% after bad debts ....

[wendigo100]

Zopa - is that lending to riff-raff?

[Bagpuss]

Any of you guys use Zopa to invest your money?

I reckon there could be quite a high demand (and therefore good rates of interest to be had) due to the sub-prime meltdown.

I keep meaning to get my ID sorted out so I can complete my sign up - will get around to it eventually ...

I have looked into Zopa, but after reading their user forums came to the conclusion you'd be better off in a top savings account. This is becuase there are many people lending out on Zopa at below market rates, not all of these guys are numpties, some are intentionally giving a helping hand to those hard up.

[Bear]

You can specify the credit rating of the people you lend to. They claim an average return is 7% after bad debts ....

Which is interesting as as the OP pointed out, you can get a fixed rate bond for 6.5% (and I think there are others that offer more) - so why bother with it.

you may get more, but you may get less!

[MrRobin]

Ah, bonza. Hmm, 7% doesn't seem enough over and above the leading bank rates to justify IMHO

[Bagpuss]

There is one benefit, Zopa doesn't show up on the taxmans radar, yet

[WotNxt]

Am I right in thinking that Zopa returns are tax free as it is classed as personal lending rather than investment - hence the maximum lending limit to fit in with the tax rules?

Can anyone confirm this?

This could make it more attractive, especially to higher rate tax payers.