anonanon, on 14 June 2011 - 10:01, said:
RS's lenders seem to have decided they aren't going to compete to get any money lent out.
On the contrary - they do compete to get money lent out, but appear to be finding that anything below 8% in the 36 month market gets snapped up by borrowers quite quickly... the apparent "lack of competition" would be simply because there are fewer lenders than borrowers - the "See more" link at the top of the page currently shows "Lender Balances £112,736" and "Open Borrower Demand £288,483".
Zopa's rates were just as high (and sometimes even higher) when demand was similarly outstripping supply here.
What I find a bit odd is that very little of the "Open Borrower Demand" seems to show its hand in the marketplace by proposing an APR that the borrower would find acceptable (part of the USP of RS for borrowers). There's only one at time of writing with a partially unmatched request for about £2k, offering lenders who want an instant match a return of 7.0%. [Edit: and a second in the rolling market, offering 4.3%]
Starfished, on 14 June 2011 - 10:39, said:
However, I do have a question on your 7.7%, where is that from? I suspect it is not "representative" if it is just the A* market. Zopa quote their representative rate a little higher at 8.5%.
At present at Zopa, 8.5% is the representative APR for a £5k loan, and 7.7% is the representative APR for a £10k loan. (you can check this by going to the "Get a Quote" page, and moving the slider around).
For 36 month loans they are based on the A*36 market, as more than 51% of approved applications are matched to this market.