More than a decade ago Zopa’s founders saw a simple problem; people borrowing money were being charged high rates and those able to invest money were getting low returns. They discovered that by matching borrowers and lenders directly, both would be better off. They currently offer lenders three investment accounts; the Zopa Access Account, Zopa Classic Account and Zopa Plus Account.
Check out the Zopa factsheet for more information.
Why Invest with Zopa?
There are no hidden charges so both investors and borrowers get a good deal. They charge borrowers a low, transparent fee once their application has been approved. This is added to the loan amount and is included in all APR (Annual Percentage Rate) quotations. For investors in the Classic and Plus products, Zopa charge a 1% fee when selling loans. It’s free to withdraw money in other ways.
Since 2005, the platform have helped around 233,000 people buy new cars, improve their homes, or take control of their finances. Investors have lent over £2.02 billion directly to UK consumers since 2005 with the platform.
How Does Investing with Zopa Work?
Once investors select a product, money transferred to will automatically go into that product. However investors can change your product selection at any time to fund a different product.
Money goes into a queue with other lenders to be matched to borrowers. It will typically be lent out within a week.
It is then split into chunks of at least £10 to be lent to different borrowers.
Each month borrowers pay back capital and interest on investor loans. These repayments can be recycled in new loans or withdrawn. If investors keep re-lending on, then repayments will continue to recycle within the same lending product. New loans will always be at the platform’s latest rates, meaning that the overall rate on investors loan book will evolve over time.
Please visit Zopa to find out more information on their current opportunities. Your Capital is At Risk.