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Zopa loans

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  • Consider your options thoroughly when taking out a loan
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Wads of £10 notes

A guide to loans from Zopa

Learn about Zopa loans, the first peer-to-peer lender in the UK.

Key points

  • Zopa is the first peer-to-peer lender in the UK
  • You can use Zopa loans for personal reasons but not for a mortgage
  • Before taking a loan out, consider all of your options

Just when lenders think things can’t get any tougher, a new kid on the block appears to shake things up. 

In 2016, Zopa approved approximately £2million of loans to those with a good credit history every day, according to its website. And with no paperwork or early repayment fees to speak of, Zopa - the UK’s first peer-to-peer lender – has become a force to be reckoned with. 

Also according to its site, would-be borrowers can find out their personalised rate for a Zopa loan online, for a specific amount and fixed term, in just three minutes. If you choose to apply and your loan is approved, that is exactly the rate you’ll get. 

You can also check your chances of being accepted for a Zopa loan with our smart search tool, which also won't leave a footprint on your credit history. More on that later.

What’s so different about a Zopa loan? 

Zopa loans have changed the lending landscape, thanks to the use of tech and data.  

Also referred to as peer-to-peer lending, the Zopa model directly matches borrowers who want a low rate loan with investors looking for a higher rate of return. Be sure to always read the terms and conditions of a loan before applying though.


Who can apply and what can you get? 

The lending criteria for a Zopa loan doesn’t differ greatly from that of a bank or building society. You need to be at least 20 years old, a UK resident with an income of at least £12,000 per year and prove you can afford the loan in the first place. 

The duration of a Zopa loan is also relatively short, offering between £1,000 and £25,000 for a period of between one and five years. All criteria and figures were correct in April 2018.

What can a Zopa loan pay for?  

Before taking out any type of loan, make sure you review all your finances and can keep up with your repayments.  

Consider all your options before applying for a loan too.  

If a Zopa loan is what you opt for, it could pay for the following things, according to its website:  

Car loan  

With interest rates still so low at the time of writing - making it more difficult to save, and car dealers less inclined to accept credit cards, a loan could be an alternative to car finance. But consider all options before taking out debt. 

Home improvements

Looking to move and want to maximise your home’s value, or want to stay where you are but give things a bit of an update? A personal loan could give you the freedom to install a loft conversion, new bathroom or kitchen affordably. Think about whether there are other options available to you before applying for a loan, like using savings. 

Life events  

If you want to book a once-in-a-lifetime holiday or plan your wedding, a Zopa loan might be able to help you out.  

Bear in mind that you can’t get a Zopa loan for your company or for a mortgage. It also doesn’t offer joint applications or guarantor loans.  

Are Zopa loans too good to be true? 

The peer-to-peer market is still relatively young, which can be attractive due to its levels of innovation and efficiency. 

The quick turnaround when applying for a Zopa loan might also drive borrowers to snap up the first offer that comes along, before their personalised rate expires. 

But borrowers beware: any loan needs to be carefully considered in line with your individual financial circumstances. Bear in mind that interest rates and terms change frequently, particularly in a competitive market.  

Each time you need to borrow, make sure you compare rates from a variety of lenders.

Which brings us nicely back round to our smart search. By using our tool - which is a soft search that won't affect your credit history - you can see the likelihood of acceptance for loans you may be eligible for. So you can weigh up your chances of being accepted for a Zopa loan against a range of other providers. You can't say fairer than that!

By Catherine Evans