Zopa is a peer-to-peer lender – which means it offers personal loans to consumers using money from investors.
It’s fully regulated by the Financial Conduct Authority (FCA), but as a digital bank it has no branches or paperwork.
This means you can manage your account exclusively via an app – which may appeal to borrowers already used to managing their finances from their smartphone.
However, Zopa also has a call centre so it’s possible to speak to a representative and make changes to your account over the phone.
But is a loan from Zopa loan right for you? From the interest you could be charged, to the likelihood of being accepted, we’ve got everything you need to know.
Zopa offers fixed rate, unsecured personal loans which you can use to fund big-ticket items such as a new car, home improvements, a wedding, consolidating more expensive debt – among many other purposes.
Zopa loans come with the following key features:
The best interest rates are given to borrowers who are viewed as less likely to miss repayments. This is typically those who have shown they can handle credit responsibly in the past and have established a strong credit rating. The precise interest rate you’ll be offered depends on a number of factors. These include:
It’s also worth bearing in mind that advertised APRs only need to apply to 51% of successful applicants, so the rate you are offered – which Zopa calls your ‘personalised rate’ – could be lower or higher.
Once you start paying the loan back, the rate – and therefore monthly repayments – is fixed for the duration of the term you selected. To get an idea of how much a personal loan might cost you, try our loan calculator.
Unlike many other banks that offer personal loans, Zopa charges a one-off non-refundable ‘origination fee’ – which it says is to help cover its costs. The exact amount of the fee varies according to factors such as the loan amount and term – but it will be set out during the application process.
However, it’s important to note that the origination fee has already been factored into the APR, so what you see is what you’ll pay. APRs are a legal requirement among loan providers to make it easy for consumers to compare deals.
Made the decision to apply for a loan? To be eligible you’ll need to be:
As with all loan providers, Zopa will carry out a credit search on you before it agrees to lend. If you have bad credit you may find you’ll face higher rates of interest to get a loan or you may be turned down altogether. You can check you credit score and find ways to improve it with our Credit Monitor.
Too many loan applications within a short space of time can damage your credit score. However, one bonus of Zopa is that it only uses ‘soft searches’ – these don’t show up on your credit file to other lenders and don’t impact your credit score. This remains the case regardless of whether you are accepted or declined.
Because Zopa is a peer-to-peer lender which matches people looking to borrow with its investors, credit checks are fairly rigorous. The good news is you have nothing to lose by applying – once you’ve checked your chances of being accepted with our Credit Monitoring tool, Zopa’s own ‘soft search’ will protect your credit score even if you are turned down.
Once your Zopa loan application is approved, you should receive the money within two hours.
Official repayment terms are between 12 months and five years. However, Zopa loans are flexible so you can repay them ahead of time without being charged an early repayment fee. However, you will not receive a refund on the origination fee.
There are a few advantages to applying for a loan with Zopa.
MoneySuperMarket is the perfect place to start. As well as being able to check your credit score first with our Credit Monitor tool, you’ll be able to compare loans from our panel of leading providers before making your choice.
During the online application process, we’ll need you to provide information such as:
You’ll also need to tell us about your personal circumstances, including:
Once you’ve entered these details, we’ll run a comparison from our loan providers and return a list of deals that could be suitable for you. Have a browse, click on your choice and you’ll be taken through to the provider’s website to make your application.
MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.