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Zopa

Grade Term Annual
Bad Debt
Lifetime
Bad Debt
Predicted Predicted Actual
A* 24 0.5% 0.52% 0.00%
A* 36 0.5% 0.80% 0.13%
A* 48 0.4% 0.82% 0.03%
A* 60 0.4% 1.00% 0.21%
A 24 1.0% 1.04% 0.00%
A 36 1.0% 1.60% 0.49%
A 48 0.8% 1.63% 0.00%
A 60 0.8% 2.00% 0.91%
B 24 2.9% 3.02% 0.06%
B 36 2.9% 4.53% 1.01%
B 48 2.3% 4.70% 0.00%
B 60 2.3% 5.96% 2.69%
S 24 TBD TBD TBD
S 36 3.0% 4.56% 0.00%
S 48 TBD TBD TBD
S 60 TBD TBD TBD
The markets below are no longer available
A* 1 12 0.5% 0.3% 0.00% 3
A* 2 12 0.5% 0.27% 0.00% 3
A* 24 0.5% 0.5% 0.00% 3
A* 48 0.5% 0.5% 0.00% 3
A 6 0.5% 0.1% 0.00% 3
A 1 12 1.4% 0.8% 0.02% 3
A 2 12 1.0% 0.54% 0.00% 3
A 24 1.0% 1.0% 0.09% 3
A 48 0.9% 1.8% 0.00%
B 6 1.0% 0.3% 0.00% 3
B 1 12 2.8% 1.5% 0.03% 3
B 2 12 2.9% 1.55% 0.00% 3
B 24 2.4% 2.5% 0.25%
B 48 1.7% 3.5% 1.39% 3
C 12 5.6% 3.0% 0.00% 3
 C 1 24 4.8% 5.0% 0.72% 3
 C 2 24 5.2% 5.42% 0.00%
C 36 5.2% 8.20% 3.77%
 C 1 48 3.4% 7.0% 10.94%
 C 2 48 4.2% 8.58% 0.00%
C 60 4.2% 11.00% 6.38%
Y 24 5.0% 5.21% 2.53%
Y 36 5.0% 7.89% 2.03%
Y 48 3.1% 7.99% 0.00%
Y 60 3.1% 8.08% 3.92%
The listings below are no longer available
L 12 N/A N/A 3.86%
L 24 N/A N/A 2.59%
L 36 N/A N/A 5.69%
L 48 N/A N/A 15.83%
L 60 N/A N/A 10.51%
Data valid as of 15th September 2013

1 Original market
2
Second introduction
3 No longer published by Zopa

ZopaZopa was the first peer-to-peer company, founded in 2005, and since then it has started a global industry.  Zopa is also a founder member of the P2P Finance Association.

Zopa's model allows lenders place their money on the Zopa market and this will be automatically split between a large number of borrowers.  Lenders can set their interest rates for each risk grade which has different expected bad debts.  While originally offering loans between 6 and 60 months, Zopa now focus on 24, 36, 48 and 60 month loans only.

Zopa now has approximately 2% of the personal loan market in the UK and currently dwarfs most of the other UK P2P companies.

Average lending rates after tax are now comparable with the best savings bonds, due to the effect of bad debt and taxation of bad debt, however for non-taxpayers and those lending at the top of the market there are still some good interest rates available.

Unique selling point

Zopa's market model allows automatic lending with a high level of diversification, and it has a good track record on bad debt, as you can see in the chart to the right.  Due to the size of the market there is a high level of liquidity and allowing borrowers to access low rates instantaneously.

ChartCompetition

Zopa has 85% of the peer-to-peer market, so dwarfs all of the other companies combined.  Zopa is also competing with high street banks, building societies and personal loan companies.

Comments

The web site is professional and communication has been very good.  Loan rates on Zopa have fallen recently as Zopa appear to be tweaking the borrower fee daily to ensure the rates remain competitive.

There was a larger than predicted bad debt from loans originating in 2008, but since then Zopa have tightened lending criteria, and are now overestimating bad debts for most markets.

General Communication :-):-):-):-|:-| 8/10
Ease of Web Site :-):-):-|:-|:-| 7/10
Innovation :-):-):-|:-|:-| 7/10
Lending Lending Rates :-):-):-|:-|:-| 7/10
Access to Funds :-):-):-):-|:-| 8/10
Fees :-):-|:-|:-|:-| 6/10
Bad Debt :-):-):-|:-|:-| 7/10
Borrowing Loan Rates :-):-):-):-):-| 9/10
Speed of Loan :-):-):-):-|:-| 8/10
Fees :-):-):-|:-|:-| 7/10
Overall :-):-):-):-|:-| 7.3/10

For an in-depth analysis and comparable statistics please refer to the comparisons of the peer-to-peer companies.

In summary Zopa has been innovative, offering excellent rates to borrowers and good rates to lenders.  The P2P money website recommends Zopa as the number one provider for personal loans.

Zopa review written by , last updated on 24th September 2013