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Zopa review

If you're thinking about saving or borrowing money through a peer-to-peer lending website, read our in-depth Zopa review.

In this article
What is Zopa? How does Zopa work? How quickly can I get my money out of Zopa? Borrowing terms
What Zopa's customers say about them? Alternatives to peer-to-peer websites Get top money-saving tips from Which?

What is Zopa?

Zopa was the UK’s first peer-to-peer lending website, launched in 2005.

It offers investment products where money is lent to UK consumers looking for personal loans. 

Is peer-to-peer investing right for you?

Peer-to-peer lending involves considerable risks, and several platforms have collapsed in recent years. Be aware:

  • Peer-to-peer platforms are not protected by the Financial Services Compensation Scheme
  • Returns are not guaranteed, and past performance does not serve as a reliable guide
  • Contingency funds can't be relied upon
  • You could face long waits to withdraw your money 

If you don't want to take risks with your money, opt for a savings account.

If you're happy to take risks whilst investing, make sure you have a balanced portfolio.

How does Zopa work?

Zopa offers two investment options:

  • Zopa core - projected returns of 2.3% to 4.3%
  • Zopa Plus - projected returns of 2.4% to 5.6%

Zopa Plus offers higher returns, but includes riskier borrowers in your portfolio.

The minimum investment for both plans is £1,000.

When you lend money through Zopa, it splits up the amount you invest into small chunks - so no one person is lent more than 1% of your initial investment.

Zopa assesses borrowers and claims to approve just 20% of applicants. However, if a borrower defaults you will lose that sum from your investment (minus any recovered amounts).

How quickly can I get my money out of Zopa?

There is no fixed term for investing, although Zopa recommends leaving your money for at least three years.

Instant access to your money is not guaranteed, as it depends on selling your loans to other investors. A 1% sale fee applies.

Zopa does not have a contingency fund, unlike some other platforms.

Borrowing terms

  • Minimum amount you can borrow: £1,000
  • Maximum amount you can borrow: £25,000
  • Borrowing term: One to five years
  • Can loans be paid off early? Yes, and without any penalty fees

What Zopa's customers say about them?

‘Easy-to-use website, easy to withdraw and invest, and good email reminders.'

‘Straightforward, and better rates than a building society. I have no cause to mistrust the system.’

‘Good interest rate paid, but absence of FSCS coverage as on other savings remains a concern.’

Alternatives to peer-to-peer websites

If you're looking for a loan, it's worth checking out Which? Best Rate personal loans, too.

In almost all cases you'll want to build up cash savings (in Isas or savings accounts) before considering putting your money into a more risky investment such as peer-to-peer lending.

If you're looking for higher returns you might want to consider other investments.

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