Zopa is a site which enables members to lend and borrow money off each other (Social Lending) instead of using banks or building societies. The rates offered are very competitive for both lenders and borrowers as the business operates without the large overheads of traditional banks and also claims to make less of a profit margin.Borrowers are credit checked with only the top 40% of applicants getting approval to proceed further. There are two types of borrowers and the lenders can decide which bracket they want to lend money to. The lender sets the amount of money they are willing to lend, the rate and the length of time the loan will be paid back.
Members are allowed to borrow up to £15000 and can lend up to £25000. Lenders have their risks spread over a portfolio of loans. Borrowers pay a 1% exchange fee to Zopa up front.
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