Zopa is a social lending and borrowing website that allows you to exchange with other people in the community.
The site was founded through consumer research showing people were fed up with borrowing money from banks who make huge profits and that certain people found it hard to get credit.
The community aspect of Zopa is that the people lending the money are you and me, in fact anyone can sign up and start lending their own money to other members.
You get the control to set your own interest rates and to set the market you lend to. When signing up to borrow money you have to be credit checked, the outcome of this then puts you into one of four markets - A*, A, B or C. The better the market you are in, the lower the interest rate you will be able to borrow money at.
Zopa stands for 'Zone of Possible Agreement' and states that the average interest rate is about 6.75% however usually for an A* market this is lower at about 5.5%.
This is great for borrowers in this market as the interest is much better than what you would find on the high street. This isn't so good for lenders as after Zopa fees and tax you would be better off putting your money in a savings account.
The B and C markets are where lenders are more likely to make a better return, however the risk of lending money is significantly increased.
**the rest of this blog has become corrupted**