Maximise Your Saving Interest rates with ZOPA

Peer-to-peer lending is a smarter, fairer and more human way of doing money. It’s like borrowing and lending with your friends and family – except there are thousands of people you can lend and borrow with.

Both lenders and borrowers get better rates, because peer-to-peer lending is more efficient than the traditional banking model. Banks have massive overheads, with thousands of employees to pay and hundreds of branches to maintain. So they have to take large margins on the money that passes through them.

There’s no smoke and mirrors here. Banks use your money to make even more money for themselves. They lend some of it out, gamble some of it on the price of tin or the Yen depreciating, and invest the rest in any other money-making schemes they can think of.

Whereas at Zopa, people who have spare money lend it directly to people who want to borrow. There are no banks in the middle, no huge overheads and no unethical investments.

So that the Zopa marketplace works smoothly, we’ve put a series of checks and balances in place. This is how it works:

We look at the credit scores of people looking to borrow and work out whether they fit into the A*, A, B, C or Young market. If they’re none of these, then Zopa’s not for them.
Lenders make lending offers – ‘I’d like to lend this much to A-rated borrowers for this long and at this rate.’
Borrowers size up the rates offered to them, and snap up the ones they like the look of. If they don’t like the rates today, they can come back tomorrow to see if things have changed.
To reduce any risk, Zopa lenders only lend small chunks to individual borrowers. A lender lending £500 or more would have their money spread across at least 50 borrowers.
Borrowers enter into legally binding contracts with their lenders.
Borrowers repay monthly by direct debit. If any repayments are missed, a collections agency uses the same recovery process that the high street banks use.
Zopa earns money by charging borrowers a £130.00 transaction fee and lenders a 1% annual servicing fee.
And everyone’s happy – lenders get great returns, borrowers get great rates, and there’s not a bank or a bank manager in sight.

Zopa was the world’s first lending and borrowing marketplace. By demonstrating that Peer-to-peer lending works on a large scale, Zopa has changed the financial sector for good.

In Zopa’s wake, copycats – such as Prosper in the US, Smava in Germany and Communitae in Spain – have sprung up across the world.

Peer-to-peer lending is a financial category of genuine and increasing importance.

Click here and join Zopa now and start saving

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