To celebrate this milestone, Zopa is significantly reducing the fixed fee paid by all borrowers on all loans made from 5th September to the end of the month, which will be reflected in a lower APR.
The fixed fee paid by borrowers at Zopa is normally £130 per loan, but this will be reduced to £100 on all loans arranged during the offer period. On a typical loan of £5000 taken out for 3 years at current rates, this discount will reduce the APR from 8.4% to 7.9%.
In addition to this discount and the already highly competitive rates available on Zopa loans (typically 20% lower than the best the borrower can get from a bank), Zopa loans have two other big advantages:
Firstly, borrowers can repay some or even all of their loan early at any time without incurring any additional charge – a feature now unheard of amongst the banks.
Secondly, unlike most banks, Zopa uses a credit-file-friendly quotation search to give you a personalised quote in real time without leaving any damaging footprint on your credit record.
Giles Andrews, CEO and Cofounder of Zopa said:
“Our members have now lent more than £150 million to each other at rates they have agreed between themselves, with less than 0.9% defaulting. This is an achievement that all concerned can be rightly proud of, especially when the backdrop has been a near meltdown of the banking sector and the taxpayer being forced to cough up £ billions in bailouts.
"All of this is a clear indication of just how effective the peer-to-peer alternative to traditional banking can be, when the consumer has never needed one so badly. Creditworthy borrowers can readily access loans for much less than banks are offering and our lenders enjoy inflation-beating returns far bigger than from any bank savings account and at barely more risk.
"With Zopa loans now accounting for between 1% and 2% of all personal loans made in the UK each month, banks must finally be starting to feel some real competitive pressure from outside their sector, which is great news for the UK public.”
At Zopa, ordinary people bypass the banks by lending money to other creditworthy people at rates that they agree between themselves. This enables both borrowers and lenders to get a far better deal than they would get from a bank.
Most borrowers at Zopa can access a loan at least 20% cheaper than they can get from a bank, whilst lenders have enjoyed radically better returns than they could get from savings accounts.
The average return enjoyed by Zopa lenders over the last 12 months has been 6.8% p.a. (after charges but before any bad debt).
