Experts in peer-to-peer lending

Everyone who applies for a loan is identity-checked, credit-checked and risk-assessed by our expert team.

Solid lending performance

Being the first ever peer-to-peer lending company, we have solid knowledge about our borrowers and their repayment behaviour. We’re also a member of the fraud prevention service, CIFAS.

Here you can see historical performance across all loan markets currently available to lenders. As you can see, the proportion of loans not being repaid has been, and remains today, extremely low. We analyse our historical performance as well as current customer information from credit agencies. This intelligence enables us to forecast how many borrowers may not be able to repay.

Jargon buster

when a borrower has a repayment overdue.
when a borrower can no longer afford to pay the rest of their loan.
Last 12 months 13-24 months ago 25-36 months ago 37-48 months ago 49-60 months ago
Target performance 0.4 1.06 1.24 1.57 1.83
Actual default 0.2 0.31 0.48 0.47 1.55
Expected default from current arrears 0.22 0.15 0.15 0.09 0.16

Industry standard statistics

We’re working with the P2PFA to agree standard statistics which show borrowers’ non-repayment performance. These show the proportion of loans that were made in each calendar year that are either in arrears or default, versus our original forecast.

(i) Actual arrears (>45 days) (ii) Expected defaults (iii) Actual defaults
2015 0.00% 2.52% 0.00%
2014 0.01% 2.30% 0.28%
2013 0.01% 1.41% 0.47%
2012 0.05% 1.50% 0.76%
2011 0.08% 2.01% 0.99%
2010 0.17% 2.59% 2.27%
2009 0.00% 2.66% 2.12%
2008 0.00% 3.68% 5.63%
2007 0.00% 2.68% 0.53%
2006 0.00% 1.77% 0.20%
2005 0.00% 1.61% 0.15%

Table legend

= Total amount of payments more than 45 days late but not defaulted, as a percentage of all outstanding balances from loans made in the calendar year.
= Expected lifetime default rates of amount lent in the calendar year
= Total defaulted loan amounts, as a percentage of amount lent in the calendar year

Late payments

The arrears information shown here only takes into account payments which have been overdue for more than 45 days.

Reducing lending risk

With any lending there’s a chance that a borrower doesn’t repay.

At Zopa, if a borrower misses a repayment, a collections team chases on your behalf. But if a borrower reaches a point where they are behind on their loan repayments by at least 4 months, we’ve created the Safeguard fund to step in and give you back your money, including interest owed. Though it’s possible that it might not always be able to do so.

It’s funded by a contribution from the fee a borrower pays when their loan is approved. As you can see, there’s a buffer on top of what it expects to pay out.

100% track record

The Safeguard fund has covered all bad loans This is when a borrower defaults and can no longer afford to pay the rest of their loan. since it launched. This means not a single lender has lost money on loans covered by the fund.

£7,245,943.93 Total amount currently in the fund
£6,246,503.38 Estimated amount the fund may have to cover
£999,440.54 Buffer

The fund is held in trust by a not-for-profit company called P2PS Limited, but it’s not covered by the FSCS.

In the event the Safeguard fund cannot cover your loan, P2PS will continue to chase the borrower on your behalf. Any repayments recovered will be paid to you, minus any enforcement fees.

Looking after your money

We take extra steps to look after your money. Any money that’s not currently lent to borrowers is held in a client funds account, which is ring-fenced from Zopa’s business.

You lend your money in small chunks to many different borrowers for 1 to 5 years. While we help this happen, the lending contract is directly between you and the borrower, and not with Zopa.

This means the loan contract would still stand in the unlikely event that Zopa closed down. We also ensure that the fees related to your contracts will cover the costs of running them in that situation, e.g. collecting borrower repayments and crediting lender accounts.

Earning interest

Your money doesn’t earn interest until you lend it to borrowers. Once you lend, the returns go directly to you.

Tracker rates explained

Our data scientists track the loans market and collect up-to-date information on the best rates banks are offering, which you can review before you lend.

Today’s projected returns are 5.1% for lending over 5 years, and 4.0% for 3 years.

The projected return is an annualised return shown before tax, after a 1% fee and expected defaults. You're responsible for paying tax on the gross income you receive.

Your projected return comes from choosing to lend money in small chunks to many borrowers at different tracker rates. A threshold is set to ensure your projected return is always at least 1% above the average savings rate the banks are offering.

The tracker rates also take into account the money available to lend on Zopa. To determine the rate for borrowers (the APR), an applicable borrower fee is added, which includes an amount to cover the borrower’s contribution to the Safeguard fund.

Tracking the market

The rates at which you offer to lend can change over time, depending on the latest rates offered by banks and the money available to lend on Zopa. That said, once your money has been matched to borrowers, it’s lent at a fixed rate for the duration of each loan.

Accessing your money

There are different ways to access the money you lend on Zopa.

1. Take home repayments

Each month you’ll receive repayments from borrowers which you can withdraw, at no charge.

2. Withdraw a lump sum

Or for a 1% fee, you can use our early access feature to withdraw a lump sum or all of your money, before borrowers have paid it back.

This service is always available as long as there are other lenders to give your loan a new home. It's a speedy but not immediate service, as it isn't like an instant access bank account. We have a fast-growing community of over 51,000 lenders, but of course there is a chance you may not be able to access your money whenever you want to. Please note, only loans with a good and up-to-date payment history can be included in this service.

Moving interest rates

When withdrawing a lump sum, if one of your loans is at a lower rate than the latest tracker rates, you’ll need to pay a small amount to the lender taking over your loan. This covers the extra interest they could have earnt by making a new loan instead.

Important information

Before you go any further, remember past performance is not a reliable indicator of future results. And forecasts are not a reliable indicator of future performance.

Read more about risk information

Historical performance data (25 KB XLS file)

To date, we've helped lend £757m, earning our lenders £47m in interest

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