When Cash Flow is Tight be Social

Hi all,

with the stream of once plentiful credit drying up to a near standstill many people are finding that obtaining credit for very necessary items like Weddings, School Fees or a  new car is very difficult. Now despite the fact that the politicians say they are working behind the scenes to force Banks to start lending again it doesn’t really look like there will be a thaw in the banks reluctance to let people borrow any time soon.

So what to do if you are stuck and in need for a loan and your credit rating is reasonable?

Well my advice would be to consider being more social… that’s right, having friends always pays dividends and in this case in more ways than one.

Let me explain…

Social Lending (just like Facebook it seems) is all the rage, and even more so since the shutters came down on the UK finance industry (and slammed shut it’s coffers) – and one of the forerunners of this growth industry is Zopa.

Zopa was established in 2005 and has over 200,000 registered members who are able to enjoy loans of up to £15,000.00 for a variety of purposes … at pretty reasonable rates too (average about 10% just now as I write this), but here’s the kicker – this is what’s known as a Social “Peer to Peer lending institution, which means in other words that you are simply borrowing your money ‘direct’ from the lender who is an individual at whatever rate you have decided between you.

With nearly £30,000,000 lent thus far and a miniscule default record (0.16%) Zopa’s Social Lending is here to stay and I predict they will do very well in the future and rightly so… they are responsible people driven organisation, providing a valuable, low cost service to people who are vetted and able to afford what they agree to in repayment terms. Their approach is pretty refreshing in this day of corporate institutional greed and rampant banking profiteering.

You will need a reasoanble credit record to be considered for a loan, but other than that it’s v.simple to apply.

So if you don’t like the way the Banks have been treating you when being considered for a legimate loan then you now have an option to cut them out completely and deal with a new friend instead.

It’s something worth pondering… and then here is of course the flip side – should you be in the position of being able to help others out during this difficult time by being one of the Social source lenders at Zopa you may be pleasantly surprised at the returns your investment brings.

Here’s their URL…

Here’s a BBC Video about them too… (even though it was recorded in Nov 2006 it’s still v.good at explaining how it works=, just bear in mind that if you wish to lend money to others with them, the rate of return they mention may be different.)

So is this the beginning of a revolution of the people against the banks?

Like I said… it pays to be Social.

Until next time,

William George IFA