When you apply for a loan, the company which you apply to with will buy a credit report from one (or all) of these agencies – namely Equifax (as used by Zopa), Experian, and Call Credit. They will then be able to see details of current outstanding debt, repayment history, and any defaults or CCJ’s.

Agencies will also assign you a score, based on the information they hold. Applications for credit will show up on your report and can cause your score to erode. Zopa is an exception to this rule, and an application for a loan will not be detrimental to your credit score, even if you’re declined.

You can get in touch with any of these agencies to check your own credit report for a nominal fee, and it is advisable to do so before making loan or credit card applications, to make sure there are no inaccuracies.

United Prosperity members choose which business projects they’d like to support, which vary from meat suppliers to furniture shops and tailors. Their donations act as a guarantee for the bank loan they’ll receive when the amount they’ve requested has been reached.

You can follow the progress of the businesses you’ve supported, to see how they’re developing with the help of your funding. Then once the banks have been repaid, you’ll get your capital back – it’s as simple as that. Check out the website for more info.

Earlier today I responded to earlier comments on the thread that mentioned Zopa, to say that a simple change to the tax laws would make Zopa lending a much stronger competitor to the banks. As I said, we have gained cross-party support for this endeavour, but we’d welcome the support of any lender out there who’d like to add their voice to the thread of comments on the BBC blog, or why not email the Chancellor direct at ministers at hm-treasury dot gov dot uk?

Zopa enjoys former Cabinet Office Minister Tom Watson amongst its fans, Zopa has been mentioned in a recent speech by George Osborne, it was named in July by the Government as an example of the kind of new innovative competitor the financial services industry needs in its “Reforming financial markets” White Paper and it was the only financial provider name-checked in the recent Government flagship report ‘Digital Britain’.

“So what?” you may ask. Well, having fans in high places can be quite important. Parliament IS still the place where law is made. And it is the law that dictates things like which financial products get tax relief (ISAs, pensions etc) and removes unintended tax and legal hurdles to new competitors having the positive impact and benefit to the UK population that they should have.

So rather than blushing at its recent attention from politicians and officials, Zopa is warmly welcoming it. It is enjoying increasingly productive dialogue with the Government, opposition parties, think tanks, consumer groups, trade bodies and more. Zopa wants policy makers and their influencers to see what an interesting idea it is, and how with some sensible amendment to the laws and red tape that controls the financial services world, its innovative ‘new way’ could have even greater positive impact on the UK. Increased competition for the banks, a new and very attractive alternative for savers and investors, increased availability of credit for sensible, creditworthy borrowers, even a great new way for pensioners to generate a better income in retirement.

So the next time a politician knocks on your door to seek your vote, why not ask him or her what they have done to support the growth and success of innovative new ways of doing things like Zopa. In the meantime, watch this space for news of how Zopa’s dialogue with Westminster could create even more attractive offers for its members.

As a Zopa lender myself I’m pretty sure that, like me, other Zopa lenders are here to make some extra cash where they can. The interest rates we can get here are certainly more impressive than the ones available in the banks right now. It’s also a much more interesting way of making money.

In fact, making extra cash on the side is a bit of a hobby for me, and has been for years. Not only is it useful to have the money, of course, but many ways of making cash on the side are actually interesting and different. That’s why we keep finding new ways of making money for Moneymagpie.com. Here are a few of the most unusual ones we’ve picked up:

Buy and Sell Lost Luggage - Yes, seriously, you can make money out of lost luggage! What happens is that when airlines can’t find (or can’t be bothered to find) the owners of lost luggage that has been hanging around for three months, they just auction it off. Anyone can go to the auction and pick up all sorts of bargains. First they pick out good stuff from the bags such as iPods and cameras and auction them separately but then they sell the bags, sight-unseen, and you just bid on them. It’s a bit of a lucky dip but generally they go for between £5-50 each. After that you can put the case and contents on eBay and make a profit. There’s likely to be an auction near you soon so find out your nearest one here.

Sell Your Hair - If you’ve got lots of it you can make money from selling your hair. The main buyer (and therefore seller) of real hair for wigs, extensions and so on are Banbury Postiche (also known as Wigsuk.com). Your hair needs to be at least 6 inches long for it to be of any use in making a wig. It must be clean and must have had no chemical treatments at all – no colouring, perming or tinting. Once it’s cut it needs to be put in a ponytail so that it’s obvious which is the top and which is the bottom. According to Banbury Postiche, the fees are £3 per ounce if your hair is 6 - 12″ long and £5 per ounce if it’s more than 12″ long.

Be a Mystery Shopper - I love being a mystery shopper. I’ve done it in the past with just one agency and had loads of free meals in pizza restaurants and pubs, free sandwiches delivered, free supermarket shopping and an overnight stay in a hotel. It’s not hard to do and it’s open to anyone. You just join one or more mystery shopping agencies (we’ve got a list of the good ones here - you do have to be careful to go with the proper ones) then put yourself up for jobs. The pay’s very little (usually about £5 or so) but the freebies make it totally worthwhile. Try it out!

Make Money from Watching TV - Don’t just sit and gawp at the TV, make some money out of it. You can get £250 for sending a daft video clip to ‘You’ve Been Framed’ or make up to £1 million being a contestant on a game show. Or how about being an extra on a TV show or film? It’s a great job to do if you’ve got a bit of spare time during the week and you live close-ish to a major city where they do filming. You can get around £100 a day, very often just for sitting around reading your book! Find out how to do all these things in our article on making money from TV here.

Do Competitions - Now you have to be careful here. There are loads of so-called competitions on the Net that are just rubbish. However, there are a lot of genuine ones around, online and offline, and you really can get good prizes if you go for the right ones. We’ve got a round-up of the latest pukka competitions here for you to try. Interestingly, you’re often better off going for competitions that offer really impressive prizes than the ones with small prizes. Weirdly more people go in for the smaller prizes (to win a laptop or a case of wine for example) than the bigger stuff like a car or exotic holiday as they think they’ll have more chance with the small prizes! So if you go for the really big prizes you’ll actually have more chance of winning. The competitions we’ve found right now include having your mortgage paid for six months, getting a year’s worth of free shopping at Sainsbury’s and £2,500-worth of Thomas Cook vouchers. It’s all worth a try.

Alistair Darling has said some encouraging things recently about wanting to see more competition for banks, not least on the Today programme (skip to 1hr 32 mins) which prompted our invitation to the programme on Saturday (1hr 46 mins), so the campaign goes on!

And it is already very interesting, entertaining and more than a little heated!

In the red corner we have James Gardner, head of strategy and research for a “major UK bank” who writes the BankerVision Blog. And in the blue corner we have Chris Skinner, a financial services guru and adviser of many years’ standing who writes the Financial Services Club Blog.

Throwing in their own two-penny-worth are a number of other folks from inside and outside the industry. Oh and me again.
Even the Financial Times have picked up on this and have posted on their own blog about it, asking for real customers who have had the Zopa experience to post news of what kind of deal they got.

Why not join the great debate, and share your insight if you are a Zopa member?

Well quite.

The Guardian’s Jonathan Freedland published this article about Zopa and the bonus culture today, saying ‘If our leaders won’t curb bankers’ megabucks, an old progressive scheme updated for the web era could bypass their greed‘.

Have a read and let us know what you think!

Generally, if you are offered a flexible loan, it means it works a little like a credit card, and you can borrow as and when you need it (up to your limit), and choose what you repay each month, above a minimum amount. It is usually an ongoing agreement, but because of this flexibility, the APR is often higher than fixed term, fixed rate loans. As with credit cards, the APR can change at short notice.

At Zopa, we describe our loans as flexible – but the APR is fixed for the term of the loan, and you can’t increase your borrowing without applying for a new loan. The flexibility refers purely to the fact that you can pay off your loan early, make overpayments and lump sum payments at no penalty.

As Barclays and HSBC post half year profits akin the GDP of a small country (£3 billion each, in just 6 months) and the bonuses at Canary Wharf appear to be flowing like honey again, it is a bit like punk never happened.

Despite some Cheshire cat smiles in Docklands, things are very different for these banks’ customers. The charges banks are taking – primarily through the spread between the interest they charge on lending and the interest they pay on savings – have never been higher. They’ve stopped lending to anyone other than the most secure borrowers, and even then at rates in the teens or worse, despite Bank of England and LIBOR rates being at record lows.

Despite Alistair Darling’s threats, the Conservatives promising major reviews of the banks if they are elected, Mervyn King saying it’s all quite outrageous, and the FSA standing in the wings like some giant toothless dinosaur, the banks are just carrying on as if nothing has happened.

But of course something has happened. Our children’s children’s children will still be paying off the costs - direct and indirect - of the banking industry’s enormous mistakes of the recent past. Without effective action from the Government and regulators, these mistakes will be made all over again, as personal greed and the arrogance of bankers stomps all over the lessons that should have been learned on the way to being bailed out by the taxpayer.

The problem is that unlike so many other far healthier industries, the banks have no effective competition. Microsoft is kept in check by Apple and increasingly Google. Warner, EMI and Sony are battling it out with the digital download phenomena. Tesco has to watch out for Sainsburys, M&S and Waitrose. Even the BBC has to keep something of an eye on ITV and Channel 4.

Banks don’t have the self-righting mechanism of genuine competition. It’s become a cosy club where customers are simply the supplier of money for banks to punt in their casino operations, politely called ‘investment banking’.

Meanwhile, Zopa – the world’s first online peer-to-peer lending marketplace – passes the £50 million of loans milestone and does 40% of that in just this year alone. Compared to the banks the numbers are of course tiny, but the pace of growth is quite remarkable.

Could Zopa become the first real competitive pressure banks feel to put their customers more at the centre of what they do? I think so. And that would be good for all of us – even ultimately the banks themselves. Imagine a world in which people liked their bank…

But when I have suggested this to one or two bankers in charge of strategy for a couple of the big banks, they laugh – out loud.

They are amused because in their eyes, peer-to-peer finance is so small, they think it doesn’t even warrant thinking about. When I made the point that P2P finance is growing fast and that every new phenomena had to start somewhere (iPods etc) there is a chilling response. In hushed, conspiratorial tones they say, “If Zopa ever gets big enough to matter, we will just undercut it on price for as long as it takes to kill it off, then get back to normal. Simple.”

As memories of British Airways v Laker and then Virgin Atlantic come rushing back, I feel room for optimism by remembering another new kid on the block, much closer to Zopa in many ways, and one that every big retailer laughed at in their early years – eBay.

It took them many years, but they have now not only revolutionised the second hand goods industry, they are the largest retailer in the world.

Maybe those bankers are laughing just a little too loudly…

This will include loans, mortgages, HP agreements, current accounts and credit cards, as well as some mail order accounts and mobile phone contracts. They show information such as the date the account is opened, the balance, monthly repayment where applicable, and whether repayments have been on time.

Credit reports also show records of bankruptcy, county court judgements and defaults, as well as someone’s presence on the electoral role. Recent credit enquiries and applications are visible.

Your credit report can be accessed by potential lenders, but only with the permission of the borrower. In certain circumstances, it can also be accessed by employers and landlords.

For this reason, it’s important to check your credit report to make sure it’s up to date and doesn’t contain any inaccuracies. Our partners at Check My File have a lowest price guarantee, so why not take a look now?

TA: I have an exclusive to share with readers.
PM: An exclusive? Oooh.
…
TA: Zopa.com has, this morning , crossed the milestone of £50m of loans between its members.
TA: This is banking for the future.
PM: I can’t find the ticker
TA: It’s not listed
TA: It’s a social finance service
TA: Social lending – site where people can lend and borrow money from each other.
TA: It sidesteps the banks.
TA: And this morning it has just crossed the £50m mark
TA: Cause for celebration, no?
…
TA: It’s cool

Thanks to those who’ve played a part in us all getting to this milestone.

Seriously though, it’s worth having a look at this video - it gives a lot of insight into the beginnings of Zopa, as well as the aims and the growth of the company. Let us know what you think!

Tomorrow (Saturday 25th July) Giles is scheduled to be on Moneybox to talk about saving and investing. Don’t forget to tune in! We’ll bring you a link on Monday for those of you who can’t make it.

Edit: And here is the link if you want to have a listen!

This is the description of a recent Radio 4 programme called ‘In Business: Let’s Start A Bank’. Giles spoke to Peter Day about the reasons behind the inception of Zopa, and you can listen here (to hear Zopa’s contribution, skip to 22 minutes in).

As the banking crisis has shown, size is no guarantee of positive outcome for the financial services consumer. It made no difference that RBS or HBOS were gigantic or had previously earned annual profits equivalent to the GDP of small nations. They took correspondingly big risks and the results have been painful.
But it did not need to be a crisis to show that big is bad. The whole premise of the large organisation ‘manufacturing’ a range of products to cross-sell to the consumer is flawed.
With few exceptions, the businesses inflicting the highest charges, offering the poorest value and carrying out the most widespread mis-selling were the biggest ones - whether banks, insurance companies, fund managers or financial advisors. Years of getting away with hard-selling poor products and services to under informed consumers made the growth of these leviathans possible.
As the giants of the financial services feel the pressure of more discerning consumers, armed with better knowledge through the internet, there is something of the supertanker about them. Huge size, ancient legacy IT, bureaucratic structure and a creaking culture stifle innovation and make for cumbersome ships to steer.
This is in contrast to the new services and improved value offered by smaller, faster new entrants born to serve the informed consumer better, in narrow niches, without trying to be all things to all men.

An unsecured loan is not secured against any collateral. The amounts lent are usually smaller, and generally have a higher APR because of the riskier nature of the loan. For this reason, it can be more difficult to get an unsecured loan with a low APR if you have a less than perfect credit history.

Here at Zopa, our loans are unsecured. We only lend to prime borrowers, and because of this, our lenders make sure Zopa’s rates are some of the most competitive in the market. You can check out the latest rates here.

Last week, Zopa attended a fascinating day event called Reboot Britain, which was a direct response to the Digital Britain report published recently by the Department for Culture, Media and Sport.  Whilst the latter addressed how it would promote access to networked technology, the event posed the more fundamental question of what motivation people would have to make productive use of this access; or rather, how the promise of such technology could address the challenges we face as a country.

There was simply too much going on to attend all of the events, whose broad spectrum included the economy, policy-making, government and education; however, from what we did see there were some very bold yet insightful opinions from various speakers, including Craig Newmark (founder of Craigslist) and Lee Bryant (director of Headshift).

One of the more salient points that resonated throughout the day was that we should encourage a positive cultural shift in our attitude (as a nation) towards innovation: we should embrace more of the small, experimental ideas like Social Innovation Camp or mySociety and direct more energy and resource towards such endeavours rather than traditional, monolithic IT reforms.  Even at the risk of some of these ideas never really taking off, a collaborative, open environment delivers far better results more in harmony with society’s needs, and with significantly less overhead than traditional consulting models.  Following on from this, that we should welcome failure as part of this process, rather than nurturing a fear of it.

Zopa itself was participating in a session called We:Bank.  A few lending online models presented, and whilst there wasn’t enough time to debate more deeply on the relevance of them in today’s climate, a very interesting theme arose from the conversations.   Many of those attending the event were interested in social change and how more innovative models in the UK are addressing the current economic climate, and there was some criticism that the models present aren’t.  This response from the audience highlights quite an important point: I don’t think any of the models presented were designed to solve an economic crisis.  Zopa, for example, was launched during very prosperous times for the retail finance market; but it would be fair to say that the simplicity of the Zopa model has proven more successful in current times, serving people that banks can’t because of their current problems.

The fact that a peer-to-peer model is increasing in popularity is symptomatic of this cultural shift, and presents a foundation for a plethora of new ones to emerge that are more attuned to addressing critical social need.  That’s a debate certainly worth having in present times, and I hope we can contribute healthily to it.

”On 10 July 2009 Zopa Italy was notified of the cancellation of its licence to operate as a financial intermediary (106) by the Ministry of Economics and Finance, by indication of the Bank of Italy. As a consequence Zopa Italy has stopped issuing new loans and accepting registration of new lenders. The company is evaluating all initiatives, even at judicial level, in order to protect its position and its community. Zopa Italy will keep you informed on all activities put in place to safeguard an innovative, ethical and social initiative that bring benefits to all participants.”

In the UK we are very confused by this notification as Zopa Italy sought regulatory approval from the Bank of Italy and received the appropriate licence to operate before launch. We understand that there was an inspection by the Bank of Italy more recently, which highlighted some issues that Zopa Italy believed it had addressed/could address, only for the notification to arrive without further discussion.

That seems very strange - we will keep you posted with developments. This clearly has nothing to do with our regulatory position and ability to operate in the UK, but it is still very disappointing that our colleagues have to deal with this in Italy.

So we all recently had a cuppa with Cecile, who successfully got the first Zopa-PRIME ‘olderprenuer’ loan, to find out more about her and where her new business idea came from. Check it out!

Put simply, AER is the estimated interest that you will receive over a year on your savings, assuming that each month you will be earning interest on a slightly higher balance to the previous month, due to interest accumulating.

Banks can choose to add interest annually, monthly, or at any other interval, meaning that different calculations have to be applied to make the AER comparable, so you can still compare the quoted rates between various savings accounts.

It is not defined by any legal or regulatory authorities, so it can change without notice, and it does not incorporate any fees.

The average lender return quoted on Zopa’s homepage is not an AER and so can’t be directly compared to a savings account. This is because Zopa isn’t a bank and as such it is Zopa’s lenders themselves who define the returns they each get. Their returns depend on a number of factors other than just the interest rate they set, including the speed at which money is lent out, the markets lent to, and whether or not borrowers repay early.

We’ve teamed up with Good Energy, the UK ’s only dedicated 100% renewable electricity supplier. They’ll be sending their members who are looking to generate their own renewable energy, for example using solar panels or wind turbines, to Zopa Listings for financial assistance with the initial installation.

Not only will they be joining the pioneering community of independent green energy generators, but they’ll also be able to earn an income as Good Energy pays microgenerators on its HomeGen and HotROCs schemes for all the energy they produce - even the units they use themselves.

And they’ve got a special bonus for Zopa members at the mo’ - if you sign up to Good Energy via Zopa you will receive a free owl monitor, worth £34.95, to show you exactly how much energy you’re using. Click here to find out more.

Perhaps we can all award them points out of ten for their speeches?

We’re were pleased that some of you came along to see the debut of the film back then, but now everyone can see it in the comfort of their own home as it’ll be aired on More4 on Friday 10th July at 11.10pm.

I’m not sure that our member, Adilowes who’s in the film as a case study, knew it would lead to his national TV debut! Fame at last, eh?

Let us know what you think…

APR
APR is short for Annual Percentage Rate and was introduced under the Consumer Credit Act 1974 to make loan deals directly comparable. An APR is the yearly cost of a loan (or mortgage or credit card etc), expressed as a percentage. This figure takes into account not only the interest payable over the term of the loan, but also any upfront fees and charges. However, it would not take into account any early repayment fees that you might incur, and these do apply to the vast majority of unsecured loans (but not, of course, here at Zopa!).

Everyone is always searching for the lowest APR rate they can get because of course they’re cheapest in the long run, and indeed Zopa lenders have ensured that we’ve often been table-topping on the comparison websites. However, for all the attention APR rates get, seemingly large increases in APR can make very little difference on the relatively small sums of money involved in a personal loan. For example, a hike of 1.0% in the APR on a £5000 loan over 36 months, increases the monthly repayment by just £2.14 - less than a pint and a packet of salt & vinegar!

Therefore it’s always worth checking the early repayment fees on a loan as well as the APR, because if you do wish to pay it off early, it’s important to ensure that your cheap loan is as flexible as you need it to be. Of course, Zopa doesn’t charge any sneaky penalties or admin fees for any kind of overpayment or full early settlement on a loan, so not only is a Zopa loan one of the cheapest available, it’s also one of the fairest and most flexible. Good eh?

Next week, AER…

Wimbledon Tennis – White clad players on green grass, a large glass of Pimm’s No. 1 in my hand and I’m in heaven.

A Music Festival – Doesn’t matter which one and it usually doesn’t matter if it rains or not (it most likely will rain!) you’re still always guaranteed an amazing time and you can master the art of making welly’s look cool.

Chatsworth House – Surrounded by beautiful countryside in the Peak district, this is perfect if you want to get out of the city. I thoroughly enjoyed my visit by having cream teas and drinking copious amounts of the local ale.

The Isle of Wight – Feels like you’re going abroad because you have to get on a boat! There are also a surprising number of activities and events from carnivals and concerts at Osborne House to the steam railway. There’s even a Morris Minor Rally! Or you can just head down to the local pub and enjoy the Isle of Wight lobster. Yum!