This new rate is currently the cheapest on the unsecured personal loans market.

The 4.9% Rep. APR rate offer will run until Wednesday 22nd May. Borrowers looking for a loan over 4 or 5 years for £7,500 to £10,000 will be offered a loan at 5.1% Rep. APR. To borrow you need to have a good credit rating and can get a personalised soft-search quote which does not impact your credit score. The rate you are quoted will be the final APR you will pay once your loan has been approved. As always, we are rewarding Zopa customers for paying loans back early with no early repayment fees.

Plus with Zopa you are borrowing from other people like you. Your loan is funded by UK savers lending their money to you through Zopa’s peer-to-peer model. A nicer alternative than going to your bank.

Zopa rewards borrowers and savers who are good with their money. We believe that sensible people who can manage their repayments should be offered a great loan rate. By being the first lender in the UK to offer 4.9% Rep. APR loans between £7,500 -£10,000 we are going even further to ensure Zopa is driving the costs of loans down and providing real value to our customers.

If you are interested in finding out if you would qualify for the new offer then do a soft search online for a Zopa loan.

Nearly 50%, £145m has been spent on modes of transport with the majority of loans being used for cars. This has helped people get to work and improve their family transport situations.

The second highest reason for loans is for paying off credit cards, which has helped people manage their finances and become more responsible with their money.

The third most popular reason for a Zopa loan is to help with home improvements. We know that a person’s home is their castle but with over £58m being spent on home improvements, our members have a serious appetite for DIY and investing in their properties for the future.

Other interesting reasons for loans include helping pay for wedding expenses, land purchases, art, education fees and even the odd boat.

Take a look at the full £300m breakdown below.

Yes you heard us correctly, £300,000,000.

This is a huge figure, and we are the first peer-to-peer lender in Europe to reach it. We could not have done this without the continuing support from both our savers and borrowers, who trust us to match-up and reward responsible people who are good with their money.

We have over 40k savers who have lent collectively £300 million to help people buy new cars, upgrade their homes, propose to their loved ones and get married, buy boats and even re-train with educational courses.

We are always looking at new ways to provide a better service and this is why we have recently introduced the Zopa Safeguard offer to help reward people who are good with money. We have introduced the Safeguard after taking feedback from our customers in order to provide a safer way grow your savings by lending.

Here you can see some of the Zopa team celebrating the big THREE-O-O, but to give something back to you, we are giving away three £100 Amazon gift vouchers for the best images around what 300 means to you. Post them on our Facebook page and we will look to draw three winners in the coming week from the best submissions.

Thank you again for continuing to grow your savings and borrow with Zopa and here’s looking forward to half a billion pounds in the very near future!

Zopa celebrates hitting £300 million

We’ve listened to your feedback to offer a new and easier way to lend with Zopa, so as a saver you can now:

1. Lend safely knowing your money is protected by the new Zopa Safeguard

2. Earn the best returns available by offering new tracker rates to give you the best overall rate across the markets

Try Safeguard offer

Why choose the Safeguard offer?

1. Lend with peace of mind

We are introducing the Safeguard offer so you can lend-to-save safely, quickly and earn great returns. Zopa has created the Safeguard in order for you to get back all the money you put into Zopa plus interest on your lending without having to worry about a borrower not being able to pay you back.

You earn interest by lending to sensible borrowers with excellent credit-ratings through Zopa. Our expert loans team uses a wide range of careful checks to make sure our borrowers are responsible and can afford to repay their loans. As a result, Zopa has a higher repayment success rate from borrowers than any other peer-to-peer lender or the high street banks, with 40% of borrowers paying off their loan early at no extra cost.

In the rare event where one of your borrowers can’t pay you back, perhaps due to redundancy or illness, the Zopa Safeguard has been created to step in and protect your money should this happen. By doing this, the Safeguard is now available to give you back all the money plus the interest owed to you.

What is the Zopa Safeguard?

The Zopa Safeguard is a fund held in trust by a not-for-profit organisation, which means Zopa has no rights to the money in it. If a borrower you lend to through the Safeguard offer is then unable to pay back their loan, the Zopa Safeguard makes up the money owed to you.

The Zopa Safeguard isn’t an insurance or guarantee product, it’s a dedicated fund to help protect you against potential risks and is just good sense for both savers and borrowers looking for a better deal.

2. Earn the best return on your savings

Our priority is to help you save and lend your money efficiently. You can earn market-leading returns from lending your money with Zopa, but if you have money in your Zopa holding account or waiting to be lent this won’t be earning interest. To get your money working harder for you, simply choose to lend at the new tracker rates through the Safeguard offer.

This means the rates you are offering to borrowers will follow the UK personal loan industry and deliver you the best return available at any given time. As rates go up in the personal loans market, the rate you are offering will go up and your returns will increase. When rates go down there is a minimum threshold in the tracker rates to ensure you still earn a better return than you can at a bank.

We are very excited about the Safeguard and what it will mean for our members. You can find out more about how you can benefit as a saver on How Lending Works.

To start earning great returns on your savings, simply start lending with the Safeguard offer!

This year, Moneywise are once again looking for the nation’s most trusted finance providers in a range of product categories which include mortgages, credit cards, home insurance, savings accounts and personal loans. We could not have made the cut without our loyal members voting for us again. This is an award that means a lot to us here at Zopa HQ, as we have won it back-to-back for the past three years and really hope that with your support and feedback, we can make it a fourth.

The winners will be announced on June 13th, so we will let you know how we get on. We are up against some stiff competition, so it is now a case of everyone keeping their fingers crossed. All the judging is made by reviewing customer feedback, which is why this award means so much to us, as we are always working to improve our offers by continuing to be a trusted and award winning peer-to-peer lending service.

To see the full list of companies shortlisted please check out the article.

If you are keen to share your experience and story and have taken out a Zopa loan for something exciting, please drop us a line with your story at stories@zopa.com as our PR team would love to hear from you.

The Zopa offices will be closed over the Easter bank holiday, so make sure you add your funds in good time to make the most of those looking for a loan over the long weekend. Here is a calendar of when faster payment transfers should reach Zopa accounts over Easter.

To enlarge the table below, please click on it.

Moneywise are currently running a national survey which gives consumers the chance to vote for their favourite financial products.

Zopa has been voted the most trusted loans provider for 3 years running and we’d really appreciate your vote this year.

Plus you could win £1,000, courtesy of Moneywise!

Vote here

Amber circles will now show in non-A* markets when both the participation is low and the estimated pre-tax return is lower than you could earn by lending in the A* markets.

This is to help inform savers which rates in the non-A* markets may give similar or higher returns than the A* markets, even though the money may take longer to lend out.

As part of this scheme, the Government will contribute up to £10million to help Zopa lend to small businesses over the coming years. We hope the additional money being lent through Zopa will help thousands of sole traders to further their business and help build the economy.

We’re really excited about this news and will be developing a process that is tailored for sole traders over the coming months – we’ll keep you posted.

To get your funds ready in time, here’s when faster payment transfers should reach Zopa accounts over Christmas. Please note, Zopa offices will be closed on the bank holidays.

To enlarge the table below please click on it.

The usability of the lending rate dropdown is improved so you don’t need to choose a rate and then check whether it is competitive or not.  Visually, the most the striking change is the colour coding of lending offer rates:

• Green means you would have participated in a majority of loans in the last month and so you can expect to lend your money quickly.
•  Amber indicates slow lending because your participation is low.
•  Red means you are very unlikely to lend any money or your rate is very low and you could get a better rate and lend just as quickly.

Zopa is a dynamic market place and lending rates are influenced by the supply and demand from lenders and borrowers. In the last few months thousands of new Zopa lenders have joined while the competition for borrowers with banks and other lenders has intensified. To make sure you continue to get the return you want and are not disappointed by slow lending you should review your lending offer regularly.

We are adding an estimate of how long it will take you to lend your money across all the markets you are participating in.  This estimate is personalised to you and the rates you’ve chosen but it is of course only approximate.  Lender participation rates will be displayed more prominently to give you an indication of the speed of lending in each market.  Lending forecasts of the amount of money which could be lent per market will be removed as many Zopa savers felt they caused confusion.

We are adding an expected pre-tax return after fees and defaults. How fast you lend is important and the more quickly your money is put to work the more interest you will earn.   However, you should always ensure the rate you offer takes into account the small risk of default and this change will allow you to more easily compare the pre-tax net return you can expect from each market.  A* is our largest and safest market and the rate you set in A or B should give you as least a good a net return as A*.  You will now receive a warning if this is not the case, although you are free set any offer rate you wish.

Finally, we are also adding some information on how the banks and other lenders are advertising to the safest borrowers on price comparison sites.  This is to give more insight into what borrowers are looking for and to show lenders that they are competing against banks as well as other Zopa lenders.

Slashed pension tax breaks, scandals around high charges, employers shutting final salary schemes and poor value offered by annuities when your savings are turned to income in retirement – all these things have contributed to Britain falling out of love with pensions.

But we can’t just stick our heads in the sand and try to forget that we are all living longer than ever. Saving for retirement has never been more important.

Savers at all stages of life are attracted to Zopa by the low risk, high rates of interest that easily beat a savings account. But research just completed has revealed that retirement planning has become a very popular reason for using Zopa.

In fact, 32% of people lending at Zopa are doing so specifically as a way to save towards their future retirement or to top up their monthly income having already retired. At 37%, only “saving for a rainy day” scores higher than retirement planning as the most popular reason for lending. Other reasons stated included saving for a child’s education fees or a son’s or daughter’s wedding.

Of those savers using Zopa for retirement planning purposes, 65% are doing so pre-retirement to help build up their retirement saving pot and 35% are already retired and are using Zopa lending to top up their monthly income.

This makes perfect sense. Zopa attracts people who are sensible and responsible with their money and who actively seek out a better deal, whether they are credit worthy borrowers or savers willing to lend. Using Zopa to save for retirement or once retired to supplement monthly income is smart for a number of reasons:

Great returns

Savers lending through Zopa have enjoyed attractive average returns of 5.5% p.a. over the latest 12 months (after charges and defaults). Given that even the rates on the very best Cash ISA have been well below this and that returns on equity-based ISAs and pensions have struggled to even be a positive number, Zopa members have every right to feel pleased with themselves.

Flexible monthly income

Rather than tying up money for decades in a pension, with Zopa you receive monthly repayments of capital and interest which you can automatically relend to grow your funds further or withdraw to use as income. So savers can easily alter how they use Zopa as they approach retirement.

A fairer deal

Most people using a pension will be forced to buy an annuity when they retire. This means that prevailing annuity rates at the time you retire will control how much you get. Annuity rates have been far from appealing for some time, and bigger economic issues are likely to drive them further down rather than up. On top of this, a big concern for many is that when they die, the money in the annuity is gone – there is nothing left to leave to your family. With Zopa you can choose your interest rates and know that you can leave your money to your family or friends as part of your estate.

Of course, the best planning for retirement should involve a good mix of solutions, with appropriate diversification. The research amongst Zopa’s members has shown that this instinct has been followed, and that using Zopa sits sensibly within other arrangements, including ISAs, property, some stocks and shares, and of course company and personal pensions. Zopa members should be congratulated for not only taking advantage of the great rates available, but also the very clever and sensible ways they are using what Zopa offers within their wider financial planning.

The new ZOPA is a measure of actual market activity, based on the last 30 days of actual loans reserved and disbursed and is updated daily. It cannot be used to predict the future with certainty but it can be used to forecast how fast your money will be lent out with some statistical confidence. To improve our level of confidence we need to chop off the outliers; the head and the tail. As a practical example, there is little benefit setting your rate at 5.6% in the A* Shorter market to be sure of participating in a 100% of loans when you can get 5.9% and still participate in 99% on average.

Deciding on how to define the head and tail regions depends very much on how frequently you, the lender, are prepared to adjust your rates. Some Zopa lenders check their offers daily while others check what’s going on every month or two. However, the typical lender logs in and checks their lending offer about once a week and based on data from the first 6 months of this year we are defining the ZOPA as being between 99% and 20% participation. This produces a good balance between making sure you will participate in loans over the next week at either end of the ZOPA while still getting the best rates available.

One final point – the lending forecast is to 2 decimal places and is not rounded to the nearest £10 even though you can only lend in £10 units. We’ve debated this but have left it like that because we feel it emphasises these figures are averages over time and not to-the-£ predictions. If the lending forecast is £5.50 then it doesn’t mean you will lend out £5.50 in the next week but you would lend out £5.50 on average over several weeks. Another way of thinking about it is you have a 55% chance of lending out £10 in the next week. It’s a small point and maybe it will confuse people after all, but let’s see how it goes.

The Zopa marketplace matches lender offers with borrower loan requests by putting lender offers into a queue; there is a different queue for each market. When a borrower requests a personalised quote for a loan the system takes offers off the queue until it the requested loan amount is met. The borrower’s quoted APR is an average of the rates offered by lenders participating in the loan.

The lending offer queue is ordered by:

• Interest rate (cheapest to most expensive) and then by
• The time the interest rate was last set in that market

The second criterion is changing to use a round robin queue order. This means that as soon as a lending offer in a market is matched with a borrower’s loan request the offer goes to the back of the queue. Because there are more personalised quotes than actual loan applications the queue position changes very frequently and all lenders have an equal chance of participating in loans.

This change makes a difference only at the margins but is a step toward ensuring an equitable distribution of loans across all lenders which should make the market that little bit more efficient – prices should be driven by consideration of risk and reward and by the forces of supply and demand; not by the micro-structure of our market place.
The only difference you will see on the lending offer page is the Minimum Loan Size column will disappear (this currently appears when you click on more info button). This figure made sense when your queue position was fixed but not when it is constantly changing. Also, the MLS was an important figure in calculation of the ZOPA but it plays no role in the new method described in part 2 of this blog series.

To give you an accurate forecast of your lending over the next 7 days we need to work out two key figures:

1. The percentage of loans your lending offer will participate in a given market
2. The total number of loans that will be disbursed in the next 7 days in that market

• Lending Forecast=Loans Disbursed × Participation Rate × Max Exposure

Lenders set the rate they offer to borrowers on the lending offer page and one of the key features of the page is the ZOPA. The ZOPA is defined as “the ‘Zone of Possible Agreement’ and is where all the action takes place in a market. It is defined by the range of interest rates that were included in all the approved loans in the market over the last seven days, which is a good benchmark for how competitive rates will be over the next seven days. So, if the rate you’ve selected is in the ZOPA, you should get a good balance between lending your money out quickly and earning optimum returns. If the rate you’ve selected is too low, you’ll get your money lent out at the maximum possible speed but you could have earned a higher return on it. And if the rate you’ve selected is too high, you’ll take a long time to lend your money out and start earning interest”

In other words the ZOPA is a forecast of how much money you will lend out in the next 7 days. Right now this is worked out by following a simple and logical procedure:

1. Figure out where your lending offer is in the lending offer matching queue
2. Calculate the smallest size of loan the lending offer can participate in given its position in the queue
3. Work out the number of sufficiently large loans that were disbursed in the last 7 days and assume the same number will be disbursed in the next 7 days – this is the lending forecast

The method suffers a drawback – a lending offer’s position in the matching queue can change significantly through-out the day as other lending offers further up the queue are matched or funded and drop in and out of the queue. This often means that the top and bottom of the ZOPA changes significantly from one hour to the next. Since the ZOPA is intended to provide a 7 day forecast this can be confusing and doesn’t serve the intended purpose.

Work is in progress to provide a more accurate lending forecast and a more stable ZOPA to give our lenders the best and most consistent experience possible. I’ll be posting some details of the new method here in the next day or two.

We were back on the telly last week in the first episode of Channel 4′s Bank on Dave, where our CEO Giles Andrews gave tips on how to beat the banking system to a striving entrepreneur. You can watch the whole show on 4OD here http://www.channel4.com/programmes/bank-of-dave/4od#3383603
We’re about 6 minutes in.

We also got a very nice write up from MoneyMagpie, who gave us the very cool title of “recessions busters” and provided an in depth guide into how we work. Have a read here http://www.moneymagpie.com/article/zopa-an-alternative-to-banks-and-a-recession-busting-way-to-borrow-money

Our Zopa team took to Battersea Park last week in South London to raise money for Cancer Research UK, and they do a great job! Everyone got a bit soggy but we raised £420.00 for the cause. Here are our runners in various stages of preparation…

Next week I’ll be talking about summer budgeting. With the school holidays nearly here and the weather finally perking up I want to hear if you’re sticking to the budget or taking a much needed break abroad.

Send me your summer plans at Beth@zopa.com.
I’ll be back next week amidst the London 2012 Olympics with more Zopa news!

In the news, we got a lovely spot in The Herald thanks to our borrower in Glasgow Andrew Foreman, who used his loan to purchase a used car to get him around the “wilds of Scotland.” Andy sent us this cutting of the article which features him and his son with their Zopa loan car, again a big thank you for doing this!

We can’t get enough of hearing what you use your Zopa loans for so send your stories over to me at beth@zopa.com.

The past fortnight has seen another scandal of epic proportions from Barclays this time, as chief executive Bob Diamond steps down in light of the government investigation into the bank trying to manipulate inter-bank lending rates. With all this banking bother we asked our Facebook friends what they would do to make the industry better and the comments were predictably great.

“I fix hydraulics,” said Rob Lee.” If I was the CEO for a day what would I do… I would make the media aware and document where hard earned money comes from and how it should be invested in a morally right way.”

Ollie Clarke held a similar anti fat cat stance: “I’d force all bankers to invest their own salaries in any deals in order to earn bonuses. If the deal goes well, they get a bonus. If it goes badly, they lose money, potentially their whole salary. Then see how much gambling they do…”

And Ashley Smith helpfully pointed out; “Zopa can’t moan about fixing interest rates, that’s what every lender at Zopa does!”

If you’ve got something to say about how you’d make banking better, pop over to http://www.facebook.com/ZopaUK and leave a comment

Our Zopa volunteers are just days away from braving a 5k run around the lovely Battersea Park for Cancer Research UK. We’ll be covering the run live on our Facebook and Twitter pages, head to our Zopa justgiving page for more information http://www.justgiving.com/zopa

Finally, following our cracking member story from member Dannyspud who is using his Zopa returns to help pay off his student loan, we want to hear from lender who are using their savings made through Zopa for education purposes.
With exam results looming, university fees soaring and those student loans not getting any smaller we want to hear from those that are following a similar route to Dannyspud or are saving for when it’s time to send off your kids or grandchildren into the world of higher education. If you’ve got a few minutes email your story to beth@zopa.com

This is fantastic news but does mean that the review process on applications is taking longer than usual, so to the people that have applied thank you for your patience and please be assured our underwriters are getting to you as quickly as they possibly can.

Of course the biggest news from this week is that we only went and won Most Trusted Loan Provider for the third year in a row at the Moneywise Customer Service Awards! A few of us donned our glad rags and headed to a swanky hotel for the ceremony where we got to pick up our prize. Here is Charlotte and Emily from our member services team and our risk manager Paul at the champagne reception (it’s a hard life in the peer to peer lending business sometimes!)

A massive thank you to everyone who voted for us and helped bring home the award. We’re feeling a bit groggy after the celebrations but it was a great evening!

In the news, if you didn’t catch us on the telly you can watch our slot on the Your Money Programme through this link http://www.youtube.com/watch?v=knUJhSFcMAc&feature=youtu.be

Thank you again to our brilliant members who took part (we’re seriously considering getting Lynne t shirts printed in the office.)

Mindful Money also posed the question this week of what would happen if Spain used Zopa as a sensible alternative to the traditional banking system that has so far done them no favours.

http://www.mindfulmoney.co.uk/12550/investing-strategy/should-spain-go-to-zopa.html

Lenders! We have had a lot of you calling in this week having forgotten to put your unique reference on your bank transfers. You’ll find your unique reference on the Transfer Money In page beginning with a “Z,”and this makes sure your money gets to us much quicker!

Borrowers! We’re always keen to hear how you’ve used your Zopa loan and with the British summer (apparently) underway we want to know who’s embraced the weather regardless and purchased a caravan or bike with their new funds.
If you’ve got a story or even better a picture sail it over to beth@zopa.com.

On the 5k run front we’ve raised a wonderful £160.00 so far and our team are training hard for the big day on the 11th. Thanks to everyone that has sponsored us!

We’ve also got a bit of a sweepstake going for the football, Holland are apparently in with a fighting chance, although obviously we want England for the win!

That rounds off another seven days from here at the member services desk, until next time…

A new addition to our Zopa blog this month, member services exec Beth will be giving you an insider’s look into our company, bringing you news, updates and stories from the Zopa offices every week.
Towards the end of May we made a big change to Zopa by introducing 2 and 4 year loans. The aim of this was so borrowers can choose the right loan for their budget, and Lenders can get their money paid back over shorter terms.

Our reliably vocal lenders have been on the forums, phones and email to let us know what they think, be it positive or…not so positive. Your feedback is extremely important to us when the site undergoes adjustments so thank you and keep it coming!

Speaking of feedback, we’ve started getting a bit more social with our Facebook Fridays, where you can log in and ask me about anything from the state of your account to how long to cook a 2lb chicken for. If you’ve got something Zopa based (or silly) on your mind pop over to the Zopa Facebook page on Fridays at 4 and have a chat.

On an exciting and slightly glamorous note, did you see us on the BBC this weekend jus gone? One of our lovely Lenders and one of our lovely Borrowers went on BBC Breakfast and BBC 24 telling the nation about their experiences at Zopa. Pop over to our Facebook page or follow us @Zopa to see the clips.

With this and the Jubilee weekend just passed we’ve had a record breaking number of applications this month. Whereas this is fantastic news it has meant that our review process is taking a little longer. Our underwriters are working their socks off to make sure you get a decision on your loan as quickly as possible, so a big thank you to those that have applied for your patience.

Here in the Zopa offices the build up to the Olympics seems to have brought out the best in the team, with almost half of them participating in a 5k run for Cancer Research UK. Our stealthy bunch of volunteers, who include underwriters, developers, directors and showing us up, all of our collections team, will be legging it along the Thames on the 11th of July. If you fancied sponsoring our boys and girls head over to the Zopa JustGiving page here:

http://www.justgiving.com/zopa

We’ll be posting updates on their progress and of course the run itself along the way.

This is me signing off for my first week as Zopa’s inside blogger. If you have any queries, comments or want to share your member story with us, send your emails over to contactus@zopa.com and myself or one of my friendly colleagues will get back to you. Have a fantastic weekend!

“ Back at the end of my first year at university I found that between both student loans and bursaries I actually had a bit of spare money available. Rather than buy a massive television or a massive amount of alcohol I decided to invest it. This way I could make a dent, albeit a very small one, in those very same student loans I’ll soon have to repay.

Unfortunately at the time the recession was in full force and interest rates were plummeting to almost non-existent levels. It was then that I first heard of Zopa. At first I was a bit sceptical, given the state of the economy and the low interest rates offered elsewhere, how could this company be offering such high returns? I read further into it and found to my surprise that the offer was genuine, lenders get a better interest rate and so do the borrowers, and after reading about the security provided against bad debt I was sold and I haven’t looked back since.

It has now been roughly a year since I started lending with Zopa and my investment has earned many times more money over that period than a similar amount sitting in my “emergency fund” and while the amount may not exactly be life changing, I am an unemployed student after all, it is nice to know that I have begun to chip away at the mountain of debt I will leave university with.”

If you’re using your Zopa earnings to help pay off your student loan, or to help fund your children or grandchildren’s education we’d love to hear from you. Send your story to beth@zopa.com.

For those of you who aren’t aware of what this functionality does, here’s a little refresher:

As borrowers make monthly repayments, lenders get money coming back into their holding account. By turning on Auto Top Up on a Lending Offer, this money automatically gets added back onto that offer (in chunks of £10) – this way, it’ll be made available to new borrowers at the rates and terms you set.

Any new funds you credit to your account will also be added to that offer straight away, so there’s no delay in making it available to borrowers, and you don’t have to log in to top up your offer.

As you can tell from this description, the term “Auto Lend” proved to be slightly misleading. It suggests that this feature takes care of all aspects of lending for you, making sure your money is not just added to the offer, but actually lent out. However, Auto Lend (or rather, Auto Top Up) doesn’t do this, so if your rates are too high, your money is just as unlikely to get lent out as if you had Auto Top Up turned off.

Auto Top Up should be a lot clearer in this regard, and we hope it will reduce confusion for our lenders.

“Small peer-to-peer lenders like Zopa could in time replace High Street banks.  These firms could be revolutionary.  At present, these companies are tiny.  But so, a decade and a half ago, was Google.  If eBay can solve the lemons problem [duff products] in the second-hand sales market, it can be done in the market for loans”.

Zopa and the wave of peer-to-peer innovation it has kicked off has been singled out before by policymakers like Haldane – as examples of how deep innovation can bring powerful new competitive pressures to bear on the apparently sleeping dinosaurs of the banking sector.  Zopa has been mentioned in no less than four White Papers across two Governments now and continues to be a favourite poster child for the Coalition  when envisaging the bright new world that UK technological innovation can bring about – even in the City.

Mr Haldane’s comments have clearly served to raise the profile of how Zopa is disrupting finance to give people a better deal on their money.  But he is not the first distinguished commentator to draw parallels between Zopa and the impact Google has had on access to information, Amazon on the market for cheap books and eBay on the ability to find, buy and sell “stuff”.

This increasingly bright spotlight helps to make these prophecies come true.  Despite the crucial nature of competitive priced loans and inflation-beating returns to the public’s well-being, radically better deals on money tend to be less head-turning   than easy, cheap access to your favourite music, books and gadgets, that vintage Fender guitar you always wanted and information you’re after about, well, anything.  However, as more and more people have enjoyed some of the cheapest loans available and returns on their savings that have easily beaten inflation when not a single bank account did, public awareness of Zopa’s offering continues to grow.

So three cheers for Mr Haldane, his fellow luminaries, and the press for picking the story up so enthusiastically.  Even today’s LEX column in the FT cites the importance of the P2P finance movement. They have all helped make more Britons aware of the better way that there now is to borrow and save money, something as essential as it gets. Let the disruption continue!

When looking for the best deal on a loan, most of us will – sensibly enough – look for the lowest interest rate, or ‘APR’ to be precise. Zopa’s most obvious attraction to borrowers is the chance to get a lower interest rate on a loan than had they gone to a bank. Bypassing the banks and their higher charges means that for those eligible for a Zopa loan, borrowing can cost much less. This in turn makes that the new car, kitchen or holiday more affordable – or allows you to upgrade your purchase for the same cost had you gone to a bank.

But a deeper look at how our borrowers are using their loans suggest there’s more to their appeal than just lower APRs…

It turns out that of all the borrowers who got a loan at Zopa and so far paid off, an amazing 45% paid back early – at least in part. Wow!

We have always believed our penalty-free early repayment feature was the right thing to offer. Almost all financial advice tells you to pay off your debts as soon as you can. So allowing our borrowers to do just that, whether in one go or over time, was something we were proud to offer.

No bank in the UK offers the same flexibility on their personal loans. They all inflict an additional charge for any kind of early repayment. This is a poor show, as it discourages people from early repayment despite it almost always being the right thing to do.

I am sure these efforts – both to offer lower interest rates and to allow early repayment flexibility – account for why enough lovely people out there voted for Zopa as “The Most Trusted Personal Loan Provider” in the annual Moneywise Consumer Opinion Survey for Zopa to be awarded first prize in both 2010 and 2011! It’s something we’re really proud of and we’re thrilled that our borrowers have shown us that they appreciate that we offer more than just great rates. We’re now in the running for the award again. If you would like to see us win this important accolade for a third time – our first awards hat trick – then please do complete the survey and vote for Zopa. It takes only a few minutes, it’s quite fun, and Moneywise is even offering a free edition of their magazine and a chance to win £1,000 or five £50 vouchers – IF you complete it.

Go on, you know you want to!
Moneywise Consumer Opinion Survey 2012

A simple enough question, but even the lady running Lloyd’s retail banking in the UK couldn’t tell the Treasury Select Committee how much she was being charged for her own Lloyds current account. It made uncomfortable yet compelling viewing, as a quick look at this footage will confirm (fast forward to 9:56:25) http://bit.ly/eOWxZp.

The Treasury Select Committee’s view is that unless you can tell what you are paying for your banking, how can there be any real price competition between banks? It’s a very good point.

Competition in the banking sector was one of the key issues that the Independent Commission on Banking (ICB), chaired by Lord Vickers, was asked to look at by the Government. Its final report was published earlier this week, but almost all of the noise afterwards was about whether or not banks in Britain should have their everyday retail operations “ring-fenced” from their so-called ‘casino’ banking where all the big and dangerous risks are taken. Vickers says yes, most banks say no.

The Government has come out in favour of Vickers’ recommendations and said it will pass new laws to put them into action, BUT after further consultation – and not before 2019. Not exactly next week, and with years for the banks’ lobbyists to try to dampen Mr Osborne’s apparent enthusiasm for change.

Zopa made its own contribution to these debates recently by commissioning the independent research company Ipsos MORI to find out how well the public understands or even just knows about ‘Bank Spreads’- the difference between what banks pay in interest on your savings, versus what they charge you to borrow. The typical bank currently inflicts a spread of 11%, paying around 1% on savings, but charging around 12% for a personal loan (source: Moneyfacts)

Here are Ipsos MORI’s findings:

1. 93% of consumers do not know what a Bank Spread is.
2. Of those that say they do know, less than half actually do.
3. When told that a typical Bank Spread is currently 11% (source: Moneyfacts, between savings account interest rates and rates charged for personal loans), a total of 58% of people think that is too high (38% think it is far too high).
4. 41% of people disagreed with the statement “Banks are commercial organisations which need to make money so I am comfortable with them doing so in this way”.
5. 80% of people agree that “Banks should state clearly what their current spread between their typical personal loan and typical savings rate is, for example in branches and online”.
6. 73% of people think “the Government and regulators should put rules in place that control the size of spread that a bank is allowed to apply.”

Giles Andrews (cofounder and CEO of Zopa) said “The difference in rates obtained by lenders and borrowers is, clearly, fundamental to the banking industry because that is where their profit lies. But this research reflects public concern that the traditional lending institutions are ripping their customers off and keeping their customers in the dark about the process and the extent of the rip off.”

“It does not have to be this way. We at Zopa have shown that peer to peer lending, conducted in a transparent manner, works better for everyone. Borrowers can get access to much lower rates, individual lenders can secure returns greatly in excess of savings accounts and Zopa can take its low charges, all within the spread, leaving everyone much better off than if they had gone to a bank. It is just rather tragic that more people don’t even know about bank spreads and the measure they provide of just how much the banks are taking from them and their fellow customers.”

I couldn’t agree more. What do you think?

But we don’t want to do it on our own!  We’d love for you to join us and to help get you started here’s our consumption calculator to work out how much you could save and donate: NEEDLESS Calculator

Remember, we’re classing consumption as food, drink and entertainment, so you can ignore all your bills and travel costs.  You might have to limit those trips to the pub and make a packed lunch for a week, but by the end of the week we’re pretty sure you’ll be a far more savvy spender so you really can’t lose!

So who’s in?!  Watch this space and our Facebook page for updates and a challenge for the weekend!

This blog post explains the changes we have made to the screens and above all, the data they present to our Lenders.

Zopa icon
The data that informs the Zopa icon has been changed slightly to be more representative of what’s actually going on in the markets. While previously, the Zopa looked at the last 5 matched applications and defined the lower and upper boundaries as the lowest and highest rates included in these loans (which meant the Zopa could fluctuate quite rapidly), the new Zopa boundaries are defined by the extremes of the last 7 days.

The upper boundary comes into force when the rate you’ve selected was not included in any of the loans approved in the market during the last week, while the lower boundary is defined by the rate that would’ve gotten you included in absolutely every loan approved in the past week in the respective market.

More information section
One of the key improvements in the new screen is the quality of data we provide that further informs how you set rates – in addition to the Zopa icon. Instead of the ‘Max rate’, ‘Min rate’, ‘Lending Speed’ and ‘Offered Lower’ columns, you can now see a ‘Lending Forecast’, ‘% Loans’ and ‘Minimum loan size’, based on the data of the last 7 days.

These columns are intended to show more experienced (or interested newbie!) Lenders what they could have lent and how many % of loans they would have been included in the past 7 days and at what loan size their money would currently be matched at using the selected rate. While we can’t issue 100% accurate predictions, the performance in the previous week should be a good indicator of the possible performance in the future.

Market data
You may have heard of our weekly market data spreadsheet in the weekly Lender email, you may have even downloaded it before. If you have, you might also know that it’s updated once a week on a Monday, and therefore not very useful on a Friday afternoon when you want to find out where you are in the Queue. On the upside, it’s in a spreadsheet format, so you can easily find yourself and do calculations that help inform your rate choices – if you want to get really stuck in.

At the same time, the previous lending screen had a little ‘Mkt’ link, which opened a window showing you the real-time Queue to a high degree of detail, but unfortunately not in a format that’s very easy to play with.

For the new screen, we’ve decided to take the best of both worlds and provide a downloadable spreadsheet providing up-to-date information on the current Queue of Offers in all markets. Additionally, we’ve anonymised the information (except for your username) for security reasons.

All that aside, we believe the new screens are a lot cleaner and easier to navigate, and should make it less daunting for new Lenders and more insightful for experienced Lenders to play with their Lending Offer.

As you may know, although individual borrowers are protected by Consumer Credit laws overseen by the OFT, there are currently no bespoke regulations in place to protect lenders and Zopa has been actively lobbying Government to put appropriate regulation in place. We have received supportive responses, but have been told that new regulation must wait for the new regulator replacing the FSA to be put in place. This is still some months or even years off.

It is with this in mind that we as key industry players decided to establish an official trade body to set meaningful standards that all members must adhere to. This body will help ensure that when regulations do eventually get put in place by the Government, they are sensible and appropriate for our innovative sector. Other peer-to-peer finance firms are free to apply for membership, but to join they must meet all of the Association’s Rules and Operating Principles as Zopa, RateSetter and Funding Circle all do.

Full details about the P2P Finance Association and its Rules and Operating Principles can be found at its website: www.p2pfinanceassociation.org.uk

After a scrumptious dinner (of which photographic evidence is not available, due to bad lighting and rumbling, impatient stomachs), the happy news was announced to the tunes of Bob Marley’s Three Little Birds: Zopa is the UK’s Most Trusted Personal Loans Provider 2011, for the second year running!

(Phone cameras aren’t what they used to be…)

Last year, we were thrilled to take the crown and we are over the moon that we have once again been voted to the top spot by our lovely borrowers – thank you to everyone who gave us their vote, we look forward to another year of great service!

And just to put this into context: Over 12,000 British consumers participated in the survey and had their say on how their financial service providers performed – what a sample size!

For the full results, check Moneywise here:
http://www.moneywise.co.uk/customer-service-awards/results
For more pictures from the event, check our facebook page here:
http://www.facebook.com/ZopaUK

Not only is this a great opportunity to join Zopa on a full-time basis and shape both the future of Zopa and your own experience, we also have a great selection of fresh biscuits every week, a bunch of fun and enthusiastic colleagues and a splendid location in the very centre of London!

We look forward to hearing from you!