Frequently asked questions

Top 6 questions

Do I have to pay tax on the interest I receive?
What are the bad debt rates?
What's the difference between A*, A, B and C borrowers?
If I am rejected as a Zopa member will this affect my credit rating?
How should I compare the rates of return?
How do I get my money into the Zopa Members’ Lending Account?

1. Do I have to pay tax on the interest I receive?

Yes. Each April, we send all Zopa lenders an annual tax statement for the 12 months upto 5th April. The statement will show the total gross interest they have received, any bad debt losses incurred, and the net interest received after bad debt. Lenders are liable to pay income tax on this net interest received.

Please note that all returns are paid without any tax – even basic rate – deducted. All Zopa lenders should declare their gains to the revenue.

2. What are the bad debt rates?

Based on data provided by Equifax about our expected borrowers, and their many years of professional experience, our risk team has made their best estimates of the levels of bad debt expected in each market. That information is used to calculate the return after bad debt that is displayed to you on the lending screen.

Despite our risk teams efforts, it is important to consider that the actual level of bad debt you experience may vary from their best estimate.

MARKET	BEST ESTIMATE
Market A* 12 mths	0.5%
Market A* 24 mths	0.5%
Market A* 36 mths	0.5%
Market A 12 mths	1.4%
Market A 24 mths	1.0%
Market A 36 mths	0.9%
Market A 48 mths	0.9%
Market A 60 mths	0.8%
Market B 12 mths	2.8%
Market B 24 mths	2.4%
Market B 36 mths	2.0%
Market B 48 mths	1.7%
Market B 60 mths	1.6%
Market C 12 mths	5.6%
Market C 24 mths	4.8%
Market C 36 mths	3.8%
Market C 48 mths	3.4%
Market C 60 mths	3.1%

3. What's the difference between A*, A, B and C borrowers?

To become a borrower at Zopa, people have to have…

….demonstrated a responsible use of credit over the last 6 years
….been on the electoral register for 6 years or more
….not increased their borrowing recently.

In addition, we need to be able to confirm all the information they give us, and the loan has to be affordable for them.

C-rated borrowers will meet the criteria

B-rated borrowers will meet the criteria well

A-rated borrowers will meet the criteria really well

And A*-rated borrowers will meet the criteria really, really well.

4. If I am not accepted as a Zopa member will this affect my credit rating?

No. If you cannot join Zopa because we are unable to authenticate you, perhaps because you have moved house recently, this will not affect your credit rating. If you join successfully but then attempt to commit fraud and have your membership cancelled, or if you default or fail to repay your loan, we will notify both credit and fraud agencies who will amend their records accordingly.

5. How should I compare the rates of return?

It is important to remember that the rate you choose not is an Annual Equivalent Rate (AER), and that you only earn this return on money that is currently lent out. As you receive back some of your lending every month, you will need to re-lend this money to get the full amount of interest.

For example, if you lent £1,000 for 1 year at 6% (and assume everyone pays back), your total interest would be £31.92, not £60. Your borrowers do not borrow the full £1,000 for one year, so do not pay interest on the entire amount for that period. In this example, over a 6 month period you would have received back over £500 which you could re-lend as it is repaid, thereby maximising your return.

6. How do I get my money into the Zopa Members’ Lending Account?

There are three ways for lenders to get money into Zopa - by debit card, standing order and direct bank transfer:

i) Using a debit card

If you want to use your debit card to pay money into Zopa you can do so online or over the phone.

Either sign in to your account and go to the 'Transfer' page or ring 020 7580 6060 any time between 10am and 6pm, Monday to Friday, and a friendly member of the Zopa Team will take your details. The money you transfer will appear in your Zopa account within the hour.

ii) By standing order

You can pay money into your account regularly by setting up a standing order for as little as £10 a month. Most online bank accounts will allow you to do this (it's often referred to as 'Bill Payments').

Use the account details below to set up a standing order to your Zopa account. Please put your Zopa username as the reference so we know the money's from you.

Bank Name: Royal Bank of Scotland
Account Name: Zopa Limited, Zopa Lenders Client Account.
Account Number: 10212420
Sort Code: 16-00-30
Reference: [Your Zopa username]

If you don't bank online, email contactus@zopa.com and ask for a Standing Order form. We'll then send you over a form, which you can print out and hand directly to your bank.

iii) By direct funds transfer

In order to lend, you will need to send money to the Zopa Members' Lending Account using a bank transfer (also called a BACS transfer). This is available from your telephone or online banking service and should be free. The money will usually take 3 working days to transfer depending on when you put the request in to your bank.

You should use the following information when you set up the transfer.

Bank Name: Royal Bank of Scotland
Account Name: Zopa Limited, Zopa Lenders Client Account.
Account Number: 10212420
Sort Code: 16-00-30
Reference: [Your Zopa username]

Your username is the username that you chose when you joined Zopa. If you've forgotten this, you can look in My Details to remind yourself. It is very important that you include this reference when you request the transfer from your bank, or your money may not be allocated correctly to your Zopa holding account - please contact your bank if it is not clear how to add this information.

We will e-mail you to let you know that your money has arrived and you can then sign in to Zopa, and make loan offers to borrowers in the market of your choice.