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Zopa: cut out the banks

10 January 2007
Social lending network site Zopa urges the 25 per cent of Britons thinking of giving their finances a 'spring clean' this new year to opt for social lending.

Zopa, a so-called 'peer-to-peer' or 'prosumer' (producer-consumer) network, allows individuals to lend and borrow directly between themselves.

A major advantage, it claims, is that Zopa can offer APR rates lower than those offered by many banks.

Zopa offers 4.7 per cent APR on a loan of £3,000 over 36 months, while Northern Rock offers 5.8 per cent and Moneyback Bank charges 5.7 per cent.

It promises consumers that they could "save hundreds if not thousands of pounds" by abandoning conventional bank lending.

James Alexander, Zopa co-founder and CEO, argues: "There has never been a better time for borrowers to discover how cutting out the banks via social lending can make a huge difference to their finances."

The Zopa site was launched in March 2005 and currently has 105,000 users, although independent financial advisers continue to urge caution in this relatively young venture.

Zopa was set up by the team behind Egg, and its founders claim it uses "all the safety measures banks use, plus a few more".

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