Zopa Loans

Zopa works differently to all the other loan companies you will see on this site. That's because its not a bank lending the money, its other people.

Because there's no big bank in the middle making the money, it can be a good deal for lenders and borrowers alike.

Rather than borrowing from just one person, Zopa works to spread the risk between a wide number of lenders for each borrower.

For borrowers, loans work much like any other kind of personal unsecured loan. However, rates change daily based on what lenders are willing to offer. Zopa splits rates into 2 different "markets" depending on your credit history. The Typical rate for those in the A Market is 6.7% p.a. For those with not quite so good a rating the Typical rate is 9% p.a.

Registering will give you a free look at your credit score as well as telling you which category you fall into. You can then see which rates you qualify for. Remember, these can change on a daily basis so if the rate is good you might want to snap it up, otherwise you can always check back tomorrow.

Loans go from £1,000 up to £15,000 and can be paid off over a period of 6 months up to 5 years. However, there are no early payment penalties.

Summary Table

Interest Rate	Typical 6.7% p.a for Market A Typical 9% p.a for Market B
Repayment Terms	6 months to 5 years
Loan Amounts	£1,000 to £15,000
Secured?	No
Early Payment Penalty	No

Credit Sources Review

Zopa is offering what could be a great new way to borrow money by cutting out the high profit banks and borrowing directly from other people.

This can mean you could get some great interest rates but they do change on a daily basis as more or less people decide to lend at various rates.

As it is real people lending rather than huge institutions, they are more likely to want to lend to people with better credit as they will mean less risk for those lending the money. If you have a bad credit history, you can still register, though, and see what rates are available before committing to actually borrowing.

No early payment penalties mean that you can pay the loan back sooner than required if you want, without incurring any fees. If you can do this it can often save you quite a bit of interest in the long run.