What happens if…

At Zopa, we factor expected defaults into projected returns. This means a more accurate projections, and fewer nasty surprises down the line. But how much would default rates have to change before your portfolio would be significantly impacted?

Let's take a look at how changes in default rate could affect the annual return of the entire product portfolio.

Scenario analysis: Core

Here's an example of what could happen if Core's default rates were to significantly drop or increase from what we originally expected when the loans were originated.

* Weighted average return / default (taking loan size into account).

Last updated 1 April 2019. Numbers based on expectations for loan disbursals from October 2018 to March 2019.

Scenario analysis: Plus

Here's an example of what could happen if Plus' default rates were to significantly drop or increase from what we originally expected when the loans were originated.

* Weighted average return / default (taking loan size into account).

Last updated 1 April 2019. Numbers based on expectations for loan disbursals from October 2018 to March 2019.

Safeguard

We used to offer products with coverage from a provision fund called Safeguard. We began retiring these products on 1 December 2017 due to changes made by HMRC around tax relief on bad debt.

Learn more about Safeguard

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