ZOPA is an online meeting place of borrowers and lenders of money. It stands for Zone of Possible Agreement. It is a limited company. Banks are not included in the transactions. It is in the UK market since 2005. It works on the principle of peer-to-peer lending. Here people who have extra money lend it to people in need of it. As there are no intermediaries, there are no extra costs involved and as such better lending rates are available. This website is open to lenders and borrowers 24/7.
The basic functions that ZOPA carries out is matching the lending offers to the applications made by the borrowers, taking care of all the documentation required in the transaction and finally distributing the money between the parties. Safety and security while using the website is well looked after. The credentials of the borrowers and the lenders are checked properly. If any borrower has a bad credit rating then he is prevented from using the website. All the borrowers are divided into proper classes so that they can get the best rates possible. The lenders too, find this classification useful when deciding the borrower. The risk of a lender is lowered by distributing his money amongst 50 odd borrowers. All the information needed is provided by ZOPA. The borrower and lender pay a certain amount or a certain percent of the amount borrowed or given, to ZOPA.
There are certain requirements to be fulfilled before joining ZOPA. The borrower or the lender has to be a current UK resident, over 18 years of age, must have a UK current account and in case of a borrower, he needs to have at least 3 years of UK credit history. Anyone can use ZOPA as long as the terms and conditions of the website are met with.
This seems an easier way of borrowing and lending money. However before you decide joining the website, compare ZOPA with other financial online marketplaces in the UK, with regards to borrowing and lending of loans.