Social Lending From Zopa Loans
Zopa is a website where individuals can both lend and borrow money to and from each other. This process of social lending is advertised by Zopa as “the human way of getting a low-cost loan”.
The Zopa social lending system is built on the principle that both lenders and borrowers will themselves benefit more by cutting out the banks as in turn lenders will receive a higher rate of interest than they would from their savings account, and borrowers would pay a lower rate of interest than they would if they borrowed from a more traditional lender.
Are Zopa Loans Safe?
Zopa offer their users a safe and secure way to get a lump sum loan without having to pay higher interest rates that high street banks often attach to their loans. As banks need to pay staff and generally have huge overheads, this means that they need to make money on each loan that they approve. The difference with Zopa however, is that with a Zopa loan you can see exactly where the money your are borrowing is coming from, and the lender in turn can see where it’s going.
Social lending from Zopa loans is a unique and more human way of borrowing money, where you pay interest to fellow individuals, instead of the banks.
How do Zopa loans work?
- You pay a small fee
- Depending on your credit rating lenders will offer you rates
- You pick the best deal for you
- You set up a monthly repayments scheme
Zopa information for borrowers
- Fees: Flat fee of £124.50
- Minimum/maximum borrowed: £1,000 / £15,000
- Average rate: 9%
Zopa information for lenders
- Fees: 1% annually
- Minimum/maximum lent: £10 / no maximum
- Average rate: 8.1% (before tax and bad debts)
- Range of rates: 0.1% – 23.8%
- Default rates low/high risk: 0.1% / 2.2%
Borrowing money through Zopa loans is similar to borrowing from a bank, but interest rates are often better because Zopa loans cuts out the middle man.
I am a Zopa member as a lender, and am very satisfied with the level of return, low default rate and general ethos
You are not independent in any way – you are backed by Zopa. Zopa has nothing to do with your hackneyed catch phrase “social lending”. Zopa is not disimilar to the “fat cat” banks it purports to disdain. There are many Zopa lenders who are niaeve, and they offer high risk lenders ridiculously low borrowing rates, because the borrowers are on Zopa – “why lend to fat cat banks’, so they asume the borrowers are in some way sanitised. Zopa is another (unregulated con). They make most of their money on the lending fee (upfront), and let their largely naieve lenders take all the risks. Go to bed Andy Wilson, and wake up to the real world.
The Zopa system and site is good, but I’m a lender and since autumn 2010 the rates available have decreased to a point where I don’t feel it’s very worth lending any more. But that’s not a problem with Zopa, just the market (I’m taking my money out at the moment). I guess that also means it’s a very good place for borrowers at the moment.