Peer-to-peer Investment

Smart investments in real people

Generate target returns of up to 5.2%
Best results over the mid to long-term (3+ years)
Also available as a tax-free ISA

Your capital is at risk, fees apply when selling loans. Tax treatment depends on your circumstances and may be subject to change in the future.

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We're fully regulated by the Financial Conduct Authority (FCA). But remember, this investment is not protected by the Financial Services Compensation Scheme (FSCS)

Excellent 9.7 out of 10

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About Zopa

1st
The world's first peer-to-peer platform
14 years
of personal loan investment expertise
£4.5 billion
in personal loans lent to over 470,000 UK consumers
£280 million
interest generated for over 60,000 active investors

Numbers as of June 2019

Understand Zopa in under 90 seconds

We bring borrowers and investors together

Start off from as little as £1,000 and we'll split your money across specially selected loans to reduce risk and help you reach your target return.

Feel good knowing your investment will help people across the UK fund everything from home improvements to new wheels for getting to work.

We find people in the UK that want to take out a loan for a maximum amount of £25,000. Drawing on our wealth of lending experience, we assess their risk and calculate a fixed interest rate for a period of up to five years.

Then, we match them with people like you – people who want to earn a good return while helping others achieve their goals.

Here's a breakdown of the process

1: Zopa splits your investment into small chunks. These are then put in a queue to be matched with different loans.
2: We’ll work out how to distribute your investment so you’re set up to match your target return.
3: You’ll receive monthly repayments, including interest but minus our loan servicing fee.
4: Some loans default. We factor this in when calculating target returns.
5: By letting us reinvest your repayments as they come in, you can earn interest on interest.

Who you invest in

Our borrowers come in all shapes and sizes, but we run checks on every single one. Here's a snapshot of what they look like.

* average January 2018 - April 2019

Can demonstrate a good track record of repaying debt

Are current UK residents

Have at least three years of UK address history

Average age 40 years old*

Average income of £40,000*

How we manage the risks

We've been doing this for 14 years and use all of our experience to decide who we will approve for a loan.

Your investment will be spread across many different loans. This reduces your risk as no one person is lent more than 1% of your initial investment.

We know that sometimes repayments may be missed. That's why we factor this into your target returns and have an experienced Collections team based in London who help to get things back on track. The vast majority of our borrowers who miss a payment will go on to fully repay their loan.

If four months of repayments are missed, we default the loan. If this happens, you'll stop receiving your regular repayments from this particular borrower. But even after a default, a team will continue to work with them to try and make recoveries on your behalf.

Borrower risk profiles

Our borrowers have to meet high standards. We only approve about 20% of people who apply for a loan with us.^†

Everyone that we do approve is categorised to assess their risk and given an interest rate personalised to them. The profiles range from A* to E. Our A* borrowers are the most reliable and E the riskiest. This process is informed by 14 years of lending data and the latest credit info from three major UK credit bureaus.

^† Based on applications via ClearScore May 2018 – March 2019, representative of Zopa's borrower approval rates.

20%

of Loan applications

80%

of Loan applications

A* A B C D E

Applicants we view as too risky

Here's a breakdown of how we calculate annual projected returns across our risk categories. Your Zopa investment will be unique to you, containing a mix of these profiles tailored to help you reach your target return.

Interest rate after loan servicing fee

2 - 4%

3 - 8.5%

7 - 14%

10 - 19%

16 - 27%

19 - 29%

Projected loss rate

0 - 1%

0.5 - 2.5%

2 - 5%

3 - 8%

8 - 15%

10 - 15%

Projected return rate

2 - 3%

2.5 - 6%

5 - 9%

7 - 11%

8 - 12%

9 - 14%

Interest rate after servicing fee – Projected loss rate = Projected return rate

Source: Indicative ranges based on weighted average interest rates and projected default rates by risk profile in 2018.

Although the majority of loans are unsecured, less than 10% are secured car loans. Given their risk, we classify these under our A and B profiles.

Investment tailored to your appetite

We offer two options for investors to pick from, Zopa Core and Zopa Plus:

Both contain A*, A, B and C borrowers
Zopa Plus adds higher risk D and E loans into the mix
Both Zopa Core and Zopa Plus are available as ISAs so you can enjoy your peer-to-peer returns tax free.

Zopa Core

Zopa Plus

Target Return

4.5%

We expect investors to earn a net annual return close to this return

Target Return

5.2%

We expect investors to earn a net annual return close to this return

Borrower blend

A*, A, B & C

Borrower blend

A*, A, B, C, D & E

Typically, D and E loans are limited to 20% of your personal mix

Minimum initial investment

£1,000

Minimum initial investment

£1,000

Available as an ISA

Yes

Available as an ISA

Yes

Access to funds

No fixed term

Best results over the mid to long-term, but you can choose to access your money early by selling loans you have invested in. This process depends on demand from other investors to buy your loans so can take several days. A 1% sale fee applies.

Not FSCS backed

Not protected

Your capital is at risk and is not protected by the Financial Services Compensation Scheme (FSCS) when you invest.

FAQs

What else do you need to know?

What are the fees impacting me as an investor?

Loan sale fee
Paid by: Investor
What:

1%, charged if you sell loans before their terms end. So, if you sell £1,000 worth of loans, you’ll receive £990. The fee covers the cost of us finding new buyers.
Fee is deducted from sale proceeds before these are passed to you.
When you request a sale, we will also revalue your loans according to the latest market rates and repayment history. That might mean they are worth less than what you paid for them. Have a look at an example.

Loan servicing fee
Paid by: Borrower
What:

This fee may vary across investment options.
Fee is factored in before we calculate your target return and is deducted directly from each borrower repayment before it’s passed to you.
This fee does not change your given target returns.

How can I access funds in my Zopa investment?

You are able to withdraw your funds at any time but remember that this investment performs best if you reinvest your repayments over 3+ years.

Sell your loans to other investors for a 1% fee

If you want to access money that is still invested in loans, you will have to sell these loans to other investors first. After you request a loan sale, we have to find other investors to buy them before you receive your funds.

Good to keep in mind…

This is a good way to withdraw a larger amount from your investment.
We charge a 1% loan sale fee and will revalue your loans according to the latest market rates and repayment history. That might mean they are worth less than what you paid for them. Have a look at an example.
Selling can take several days as we need to find buyers.
Loans in arrears cannot be sold.

Keep your monthly loan repayments

You can choose not to reinvest your incoming loan repayments so they remain in your Zopa account, ready for you to withdraw for free.

Good to keep in mind…

This is a good way to withdraw a small amount from your investment.
You can only withdraw at the pace of your incoming repayments.
If you withdraw rather than reinvest your repayments, your initial 1% exposure to a single borrower could increase over time.

How much should I consider investing?

How could I get the most out of my Zopa investment?

Your Zopa investment is unique to you: your loan book is a little different to any other customer’s, therefore its performance will be too.

However, by investing for the mid to long-term (3+ years) and automatically reinvesting your repayments into new loans, you set yourself up for the best results.

You make sure any interest received is put to use immediately by buying new loans, meaning you start earning interest on interest.
By reinvesting in new loans, and doing this for a longer time, you continuously diversify your loan book, reducing the impact of any individual loan default.

The more loan chunks you have, the more likely you are to earn close to the target return, that’s just the laws of statistics at work.

How can I make my Zopa investment tax efficient?

What is the target return?

The target return we show is the net annual return we expect the average investor to earn. It is made up of a blend of the interest rates of the different loans you invest in, minus expected losses from defaults and our loan servicing fee (which is paid by the borrower).  Your actual return could be higher or lower depending on the rate of defaults.

We sometimes revise our target returns based on the latest market conditions. If you choose to reinvest your repayments this will be done at the latest target rate.

A 1% sale fee applies when selling loans early: this is not taken into account in the target return.

Mother and daughter looking at their homwork in a laptop

Up next: Proof

Take a look at how we've performed in the past and the contingency plans we have put in place to make sure your money is in safe hands.

Your capital is at risk and is not protected by the Financial Services Compensation Scheme (FSCS). Fees may apply.

See the proof Start investing

Peer-to-peer Investment

Excellent 9.7 out of 10

About Zopa

1st

14 years

£4.5 billion

£280 million

Understand Zopa in under 90 seconds

We bring borrowers and investors together

Here's a breakdown of the process

Who you invest in

How we manage the risks

Borrower risk profiles

Investment tailored to your appetite

FAQs

What else do you need to know?

Sell your loans to other investors for a 1% fee

Good to keep in mind…

Keep your monthly loan repayments

Good to keep in mind…

Up next: Proof

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