P2P Money Blog

Today Zopa announced that in May they will be reintroducing 2 and 4 year loans.  The existing 36 and 60 month lending offers will be renamed "shorter" and "longer", with "shorter" encompassing the 2 and 3 year loans, and "longer" covering the 4 and 5 year loans.  RateSetter also allow borrowers of 5 years loans to repay over 4 years.

Here is what Zopa said in their email to lenders:

What is happening?
Up to now we've operated 36 and 60-month markets from A* to Y. From the second half of May, these will become Shorter and Longer markets - still covering A* to Y borrowers. In Shorter markets, you will be able to lend money to creditworthy borrowers looking for loans of 2 or 3 years. In Longer markets, you will be able to lend money to those wanting loans for 4 or 5 years.

Why make the change?
Offering loans between 2 and 5 years means Zopa attracts more of the safest borrowers in the UK, so you can lend money out quickly and make a great return on your savings.

How will this affect my lending?
We are not changing the way you lend your money: you choose your markets from A* to Y and lend your money in small chunks to many borrowers.

Zopa originally removed the 12, 24 and 48 month loans several years ago, citing that it was becoming difficult for lenders to manage the large number of different markets.  In addition the large APR on the 12 and 24 month loans were seen as being unattractive.  It was also stated that there was much less take up on the 48 month loans than either 36 or 60 month.  Since then the rate on Zopa loans has dropped, and they have changed their fee structure.

We believe the reintroduction of 2 and 4 year loans and the simplification of the lending offers is a good idea.