How peer-to-peer lending works

Peer-to-peer lending means lending money to individuals, or "peers", without going through a traditional financial intermediary such as a bank or other financial institution.

Companies such as Zopa work by matching individual lenders and borrowers online.

This means great rates for both borrowers and lenders because it's more efficient.

Peer-to-peer lending (or P2P lending) is also known as social lending and lend-to-save.

How does Zopa work?

Zopa makes money by charging lenders and borrowers a low, transparent fee. There are no hidden charges or sneaky clauses so our lenders and borrowers get a good deal.

Lenders pay a 1% annual lender fee on the amount they lend to borrowers. Borrowers pay the borrowing fee only when their loan application is approved. The borrowing fee is added to the loan amount and always included in all our APR quotations.

Peer-to-peer isn’t just our business, it’s our mission. We’re committed to giving people great rates and excellent customer service. We believe that people who are good with their money should be properly rewarded, and that’s how Zopa works.

Find out more about how Zopa works