Zopa loans

It can be hard deciding where to get a loan from – often the rates advertised aren’t the ones you’ll get and a decision can take what feels like an age. But now that we’re in the 21st century, newer methods of borrowing cash have started to give the traditional banks and lenders a serious run for their money.

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Who is Zopa?

Zopa launched in 2005 and is a peer to peer money lending and borrowing site – say what? If the concept’s new to you, don’t worry – we’ll explain. It’s a platform where people can invest their money for a return or where you can go if you want to borrow money instead of going to a bank. It might sound like a baffling and very modern way of investing and borrowing, but it makes sense – kind of like a dating site but matching up lenders with borrowers rather than singletons.

 

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What loans are available?

Zopa loans are available from £1,000 up to £25,000, repayable over 1 to 5 years. The annual percentage rate or APR, (which is the amount of interest you pay back on your loan) on Zopa loans are some of the most competitive in the market over a range of terms. Like many other loans, the best interest rates are only available to those with spotless credit ratings. But unlike other loan applications, Zopa run ‘soft’ credit searches which won’t show up on your credit report, which in turn won’t impact on your score.

Zopa promises quick decisions (a super speedy three minutes) which are valid for seven days so you can mull it over and if you change your mind, you’ve got 14 days to do so. If you’re approved for a loan, you can expect the money to land in your account within three working days.

If you decide to borrow from Zopa loans, you’ll pay what they call an ‘origination fee’ which will be included in your APR. But the good news is, you won’t be charged if you make early repayments or over payments – hooray!

Top tips for hassle free borrowing

Regardless of where you borrow money from, you must always stick to your repayments. If you don’t and you default on your loan you could end up being chased by debt collectors or end up in court.

If you have spare cash at the end of the month (lucky you), rather than spending it on new shoes or chocolate cake, consider paying more off your loan. As boring as that sounds, you may as well take advantage of fact that you can make overpayments without being penalised for it, and the faster you pay it off, the less interest you pay as you’re reducing the balance quicker.

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So, am I eligible for a Zopa loan?

You’ll need to be at least 20 years old and live in the UK (you’ll need proof that you’ve lived at a UK address for at least three years) and you’ll need to have an income of at least £12,000 per year. You should, of course, have a credit history that Zopa can check and be able to prove you are who you say you are.

What other options do I have?

Before you commit to any sort of loan, you should make sure you’ve got the best deal that you can find. At comparethemarket.com, we’ve made it as simples as possible to compare loans because we believe that good choices are made when you’re well informed. So whether you just need a loan for £1,000 to tide you over or need a loan when you’re in between jobs or simply want to find out more about unsecured personal loans – we can help you. But if you know what you want, you can start comparing personal loans right now.