The Zopa loan book glossary
The Zopa loan book is the place you can get a granular view of all of the loans that make up your investment.
As there’s so much detail in there, we thought it would be useful for our investors to have a go-to glossary of terms to help you understand what everything means.
New Coronavirus fields
In line with the FCA guidance released in March, we’ve been offering payment freezes or reduced payment plans for an initial period up to three months for borrowers impacted by the Coronavirus. In June, the FCA announced that this approach would be extended until October. The guidance also says that customers who were already on a plan but are still struggling financially due to the Coronavirus could choose to extend their freeze or reduced payment plan for a further three months.
To give you a clearer picture of how these changes affect your investment, we recently made some updates to your loan book. Here we give you a breakdown of the new fields to look out for and what they mean.
The Covid-Arrangements column
The last column in your loan book will now help you identify which loans have deferred repayments due to the Coronavirus. By deferred repayments, we mean the total value of the payments that were missed while that borrower was on their Coronavirus plan. So, if they were on a three-month freeze and their monthly repayments were £100, they would build up £300 in deferred repayments. You can see the deferred repayment amount by referring to the ‘Amount In Arrears’ column.
The Covid-Arrangements column will have a value of ‘True’ or ‘False’ for each loan. If the loan shows as ‘True’, this means that it has been impacted by the Coronavirus and has built up missed payments because the borrower either is or was on a freeze or reduced payment plan. While the loan is in this state it is not eligible to be sold.
If the Covid-Arrangements column shows a ‘False’, this means that the loan has not been impacted by the Coronavirus, or if it had, the loan has returned to a normal state, meaning the borrower has returned to full repayments and has paid off any deferred repayments that built up during their Coronavirus payment plan. These loans are eligible to be sold to other investors as long as they remain up to date on their repayments.
Loan status column
Loans that have been impacted by Coronavirus -- marked ‘true’ in the Covid-Arrangements column -- can have one of these three statuses:
- DeferredRepayment: These are Coronavirus-impacted loans that have returned to full contractual repayments, but still need to make up for the payments missed during their freeze or plan. This total will either be paid off during the remainder of the loan term or added to the end of the loan term.
- Arrangement: This will show for borrowers who, before the Coronavirus, were repaying as expected but are now on a freeze or reduced plan due to the impact of the pandemic. They have not yet returned to contractual repayments.
- Collections: These are loans that have been on a freeze or payment plan. However, they have not returned to full contractual repayments, nor asked for an extension on their freeze or payment plan. Any repayments missed beyond their agreed loan freeze or payment plan end date are treated as normal missed payments and will count towards default.
This is the unique code which helps us to identify the individual borrowers whose loans you have invested in. If you have a question about a specific loan, you can use this code to identify it.
This tells you which Zopa investment product this loan is linked to. For example, Zopa Core or Zopa Plus.
This is the date on which you were matched with this loan.
Refers to the risk market of the borrower. Every borrower that we approve is assigned to a risk market based on their likelihood of paying back their loan which is then reflected in the interest rate on offer. The profiles range from A* to E. Our A* borrowers are the most reliable and E the riskiest. Find more on our risk markets and expected returns page.
Type of loan
This details the type of loan you have invested in and will either be ‘unsecured’, for unsecured personal loans, or ‘secured’, for secured loans.The majority of our loans are unsecured. This means they are not secured against an asset.
But, up to 10% of the loans we match investors with each month are secured. ‘Secured’ means that if the loan goes into default, the asset – for example, a car -- can be sold to try and cover the remaining balance of the loan.
There is one other key difference between these types of loans at Zopa. An unsecured personal loan will go into default after four months of missed payments. Our secured car loans default after three months of missed payments.
This is the total lifetime of the loan in months. So for a one year loan you’ll see 12 months.
This is the total value of the individual loan in question. Because of the way we diversify your money, your investment will make up a portion of the total loan size.
This refers to the status of the money which has been borrowed. Below are the possible statuses you could see:
- Pending – Investors have funded the loan and the money is on its way to the borrower.
- Withdrawn – The funds have been received by the borrower. This is an active loan.
- Closed – The loan has been fully repaid, covered by safeguard or sold to other investors. Learn more about the Safeguard provision fund, which was retired in 2017.
- Collections – One or more payments have been missed on a loan. Our collections team will be following up with the borrower.
- Arrangement – The borrower has fallen behind on repayments but an arrangement has been made for them to pay a reduced regular amount.
- Default – An unsecured personal loan that has four months of missed payments is classed as defaulted. A secured loan that has three months of missed payments will be classed as defaulted.
- Settled – This is when borrower is unable to repay in full, but can repay a certain percentage of their debt with a lump sum on a loan which has defaulted
- Deceased – This state is shown if a borrower dies before paying off their loan
Borrower origination fee
This is an origination fee that is calculated upfront and then added to the total of the loan. Find out more about our fees.
This is the interest rate that borrowers pay on the total outstanding balance of the loan
Loan servicing fee
This is the fee deducted from the borrower rate which covers Zopa’s ongoing servicing costs. Find out more about our fees.
This is the borrower rate minus loan servicing fee. It is the interest rate that you, as the investor, receive.
This helps you to identify which loans have been bought from or sold to other Zopa investors on what we refer to as the secondary market. Find out more about how on our secondary market blog post.
The amount shown is the value of the loan at the time of the sale. If the field reads ‘null’ this means the loan was not bought or sold on the secondary market.
This is the date on which the loan was bought or sold.
If the field reads ‘null’ this means the loan was not bought or sold on the secondary market.
This is the amount you initially invested in this particular loan.
This is the amount of your initial investment in this loan which is still due to be repaid to you over the remaining term of the loan.
This is the amount of interest you are still due to earn over the lifetime of this loan. This amount assumes that the borrower sticks to their repayment schedule and loan term. If the borrower repays their loan early, then the total interest you receive will be less than this. If the borrower repays their loan late it will take longer for you to receive the interest.
This is the total amount that has been repaid to you so far on this loan.
This shows you how much of the initial amount you invested in this loan has been repaid to you so far.
This is the total amount of interest you have earned so far from this loan.
Amount in arrears
This is the total value of missed payments on the loan. So if the borrower has missed two payments of £100, the amount in arrears will be £200.
Days in arrears
This is the amount of time in days that a loan has been in arrears.
This is the day of the month on which repayment is due. However, borrowers can change the date of their repayments or can choose to make additional repayments without incurring any fees.
Covered by Safeguard
This confirms whether or not the loan is covered by Safeguard, a provision fund that used to cover our older investment products. Safeguard was retired in 2017, but there are still some active loans which were originated before that date.
Loan start date
This is the date on which the loan started. You will see a different date here to what appears in the ‘acquired’ column if your loan was bought on the secondary market. That’s because the loan will have officially started before you picked it up.
Last repayment date
This is the last date on which you received a repayment from this loan.
This is the value of a loan after it has defaulted. When a loan is defaulted you will no longer be able to sell it to other investors, so its value is 0. However our collections team will continue to work to recover as much of the remaining capital as possible
This is the date on which this loan went into default.
Monthly repayment amount
This is the amount you should receive in repayments from this loan each month but it may vary if borrower decides to pay off their loan early.
Type of asset
If your loan is secured (see “Type of Loan” column), this tells you what asset your loan is secured against. For example, if this column says “Auto”, this means that your loan is secured by a car. If your loan was to go into default, the car would be sold to try to cover the remainder of the outstanding loan balance.
This is the reason the borrower has given for taking out the loan. From home improvements to wedding expenses, you can see how your investment is making a difference.
This is the percentage of your investment which has been repaid so far
The Safeguard fund we offer does not give you a right to a payment so you may not receive a pay-out even if you suffer loss. The fund has absolute discretion as to the amount that may be paid, including making no payment at all. Therefore, investors should not rely on possible pay-outs from the Safeguard fund when considering whether or how much to invest.
Find out more on our Safeguard policy page.