Update on ZOPA

Updated Info & facts about  ZOPA

I've mostly taken this from the ZOPA web site and updated with various info found on the net.

What is ZOPA?
The world's first online marketplace where people meet to lend and borrow money. Lenders get great returns and borrowers get low-cost loans. With no bank in the middle, both parties get better rates.

Key Facts

1.             Launched in March 2005, Zopa was the very first online 'peer-to-peer' lending marketplace anywhere in the world – a true UK innovation in the dotcom world normally dominated by the USA.

2.             Zopa has around half a million members who have now lent more than £218 million between each other, all at rates they have agreed between themselves.

3.             There are now more than 35 competitor peer-to-peer lenders set up around the world.

Briefly, how does peer to peer lending at Zopa work?

4.             Ordinary individuals bypass the banks and lend to other ordinary people at rates they agree between themselves. With no bankers or the very big spreads they charge (between the rate they lend at versus the rate they pay savers) involved, both borrower and lender gets a much better deal than they do from the banks.

What's in it for consumers?

5.             Lenders are enjoying a smart way of getting a return, alongside their savings and investments. The average return on all money lent over the last year is 5.5% pa (after charges and actual average annualized defaults, over last 12 months).

6.             Borrowers are finding it a fair and human way of getting a low-cost loan. They are enjoying market-leading rates, with a typical APR currently of around 7.4% (based on £5,000 over 3 years across all Zopa markets), and the flexibility to repay their loan early at no extra cost.

Risks are kept to a minimum

7.             To protect lenders' money, Zopa uses all the safety measures banks use, plus a few more. All borrowers are identity-checked, credit scored and risk-assessed, and lenders' money is lent out in small chunks of £10 to Zopa borrowers to spread any risk of default.

Charges are clear, simple and low

8.             Zopa runs a simple and transparent charging model: lenders pay an annual fee of 1% on the money they lend, and borrowers pay a fixed fee which is added to their loan and reflected in the APR figures quoted. There are no hidden charges or any form of early repayment fee.