LOANS

ZOPA.COM

If you have no other choice but to take out a loan, after student loans, an option definitely worth considering is Zopa. Zopa is a company providing an online money exchange, allowing people who have money to lend to offer it to those who wish to borrow, instead of using savings accounts and loan applications at traditional banks. By cutting out the bank middlemen and many of the overheads, borrowers get lower rates.

For borrowers, there's no judgment by computers. The rate you get doesn't depend on how many boxes you tick on a bank's spreadsheet - it depends on what other human beings are willing to lend to you at. And you could get a lot better rate because of it. For example, a lender wants to lend £10,000 and requires a 7% interest rate as return, and a borrowing is looking to borrow £10,000 at an interest rate of 7% then both benefit. This is because the 7% gives a higher return for the lender than putting money in the bank and receiving their interest rate (e.g. 5%) and a 7% borrowing rate is considerably less than any rate a bank would offer for borrowing money.

If you're looking for a relatively small loan (i.e.£7,500 or under) then the rates quoted by Zopa are substantially lower than those offered by the likes of NatWest and Abbey - the high street banks almost always reserve the attractive rates they hang in their windows for customers wanting to borrow larger amounts.

Their site is easy to navigate and everything is explained in a simple, straight forward way. Not only is it easy to register and apply for a loan online, it is also completely secure. When you join Zopa they will verify your details with Equifax as part of the current Anti Money Laundering Regulations. They have a special arrangement with Equifax which means that this search will not influence your credit rating. None of the prolonged hassle involved in going down to a bank, speaking to advisors, filling in masses of paperwork, etc.

You can choose how much to borrow and what rate of interest from offers provided from lenders. You sign into a legal agreement for the amount and rate of borrowing you have chosen and thus a loan has been achieved. This can be particularly advantageous for students as you may have a bad credit history, or already used your maximum student loan and still obtain an excellent borrowing rate. If you have a bad credit history you will not be offered as attractive rates as somebody with a great credit history – but still more favourable than any bank loan.

You can borrow between £1,000 and £15,000 and are also provided with the opportunity to repay the entire loan off early without being subject to any penalties. In addition you can choose to add Zopa Repayment Protection to their loan to cover any unforeseen events. Zopa is available in several currencies worldwide making it an ideal option for anyone in any country.

To find out more, register or apply online check out www.zopa.com