CommunityLend blog » peer to peer lending

Canadian’s personal debt has grown and moved to floating and high rate products

Colin Henderson — Mon, 17 May 2010 21:08:26 +0000

CGA Canada produced their 2010 report Canadians debts. Most of us quietly assess ourselves against others and against the average as one way to judge success in achieving our financial goals. This report provides a window into the financial lives of Canadians and it is freely available.

Credit (excluding mortgages) all through the last three years has been increasing and at much higher rates than the US.

Drilling deeper we see that 77% of this debt is in loan products with floating (Line of Credit) or high rates (credit cards) and therefore essentially no amortization. We know that if the minimum payment is regularly made on those products they will take over 30 years to repay in full, no matter the amount outstanding. This is hardly a recipe for reducing debt.

The CGA worry about three future risks for Canadians.

1. Decline in income

2. Asset price shock

3. interest rate shock

At CommunityLend we want to help in any way we can with transparent prices and products designed to reduce debt while also providing some protection from the risks mentioned in this report.

Technorati Tags: Canada,consumers,debt,consumer loans,fixed rate,pay down,reduce debt,financial plan,personal loan,loan,asset price shock,interest rate shock,interest rate hike

Not so good news, and some great news | Zopa

Colin Henderson — Thu, 09 Oct 2008 19:26:27 +0000

It is a little sad that we see Zopa US close shop apparently following the participating Credit Unions inability to adequately fund the loans. We had always known the US Zopa was an entirely different model, with the Credit Unions being the sole lenders, and then the credit crisis came along. Nonetheless we will miss them.

Zopa US

So while our model is doing very well in current market conditions, the US has been adversely affected in a way that just couldn’t have been predicted when we launched in the US and is no way the fault of our partners. For us, a real shame is that we weren’t able to launch the original model over there for regulatory reasons.

On a related not Zopa UK is showing double digit increases in volume since the credit crisis hit, reflecting all our belief, that the time is ripe for consumers who are seeking financial alternatives.

P2P lender Zopa reports soaring uptake as credit crunch bites | finextra

Zopa says that between July and September an average of 3700 borrowers joined per month, compared to 2500 a month in the previous quarter.
Explaining the surge, Sarah Kennedy, head, customer proposition, Zopa says: “Clearly the tightened lending criteria at the banks is helping to drive borrowers to look for alternatives.”