Advantages Fun, easy to lend, makes you feel good, can earn better interest than a bank sometimes.
Disadvantages Can lose your money, your money is tied up - I mean it's tied up for years (or forever)
Zopa is a company based in the UK which offers an alternative way to make money for those who want to make money, or an alternative way to get a loan for those who want to get a loan. It's a bit like ebay, but for loans.How it works — borrowers
Once the offer process is complete (typically 7 to 10 days or so) you'll have a list of people who've given you offers, and the best ones who add up to the amount of money you wanted are chosen. You can then accept the loan, or reject it. Your choice.There's a second way — markets. This is where you go through a loan application process a bit like any other loan provider, and say how much you want to borrow etc. Your credit rating is assessed and then you're offered a loan depending on your credit rating and the amount you wish to borrow. You're matched with lenders in this process too, but they can't taunt you and offer you bad offers just because they don't like your loan purpose. On the other hand they can't offer sympathy loans either.
So of the two ways of lending loans, one way (called Listings) involves presenting yourself to your would-be lenders and getting explicit loans from them all. This way offers more flexibility for you as you can be more flexible over the loan length too. The second way (Markets) is a little more anonymous, but less flexible in terms of the loan lengths offered. It seems that if you have a bad credit rating then it's more likely that you can get a Listing loan (the present yourself way) than a Markets loan.The advantage to you as a borrower is that you can potentially get a lower rate loan than you could from somewhere else. You can also pay it back in advance if you're suddenly feeling flush, with no penalties. The loans are unsecured.
How it works — lenders
If you've got a sock drawer full of cash floating about and you want to invest it then you have the opportunity to lend it to someone. Now in theory you could lend it to Boy Band Ben from round the corner who wants £20,000 at 8% to set up his new band.
|Efficiency of service|
|Competitiveness of charges/rates|
|Promptness of service||Good|
|Online - Content/organization of site||Average|
|Online - Reliability/speed of site||Good|
|Online - Ease of applying for products||Average|
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