Close to half of all Zopa loans are repaid early, free of any penalties that punish borrowers for paying back the loan before time.

Here is the press release:

LONDON, 28th February 2012 – Leading online peer-to-peer lender Zopa today confirms that since it launched in 2005, more than 45% of the loans due to be repaid so far have been repaid early (either partially or completely) and all without the borrower paying any kind of additional fees or charges for doing so. This is in stark contrast to the banks, as not one offers a personal loan without additional early repayment charges – often of one or two month’s additional interest.

With APRs currently as low as 6.1%, loans from Zopa are some of the cheapest in the country. This is the main reason why Zopa loans are growing rapidly in popularity, with more than £180,000,000 now lent. But with so many Zopa borrowers wisely taking the opportunity to save even more money by repaying faster than they originally planned, it’s clear that the lack of any financial disincentive to early repayment is also important to the astute borrower.

Giles Andrews, CEO and cofounder of Zopa said, “In almost all circumstances, it makes good financial sense to pay off your debts as quickly as you can, including any personal loans. But banks stand in the way of this by including early repayment penalties in their loans which put people off from doing the right thing. We think that is fundamentally wrong.”

Zopa loans have always allowed borrowers to pay more than their agreed repayments to clear the loan faster or indeed to repay the whole thing off early one go – all without penalty. This could be one of the key reasons we have been voted by the public as the most trusted personal loan provider* for the last two years in a row.”

At Zopa, ordinary people bypass the banks by lending money to other creditworthy people at rates that they agree between themselves. This enables both borrowers and lenders to get a far better deal than they would get from a bank. Most borrowers accepted at Zopa get a loan around 20% cheaper than they can get from a bank, whilst lenders enjoy radically better returns than they can get from savings accounts. The average return enjoyed by Zopa lenders on loans made over the last 12 months has been 6.2% p.a. (after fees but before any default).

Notes for Editors

* Zopa has been voted by the public as the ‘Most Trusted Personal Loan Provider’ in the Moneywise Customer Service Awards for the last two years running (2010 and 2011).

About Zopa:

Zopa is a member of the Peer-to-Peer Finance Association and complies fully with all of the Association’s Rules and Operating Principles, which provide important additional consumer protection. Full details of the Association’s Rules and Operating Principles can be seen at

What is Zopa?

Zopa is the world’s first online marketplace where people meet to lend and borrow money. Lenders get great returns and borrowers get low-cost loans. With no bank in the middle, both parties get better rates. Zopa now has now arranged more than £180,000,000 in peer-to-peer loans in the UK. To find out more, please visit

What’s in it for consumers?

Lenders are enjoying a smart way of getting a return, alongside their savings and investments. The average return on all money lent over the last year is 6.2% p.a.

Borrowers are finding it a fair and human way of getting a low-cost loan. They are enjoying market-leading rates, with a representative APR currently of around 6.1% (based on £10,000 over 3 years), and the flexibility to repay their loan early at no extra cost. Unlike the vast majority of banks, borrowers at Zopa get their full personalized loan quote without leaving a mark on their credit file.

Anybody can become a member of Zopa for free, giving them access to the Refer-A-Friend scheme where they can earn £50 for each successful borrower they recommend and each lender they recommend who lends £2000 or more.

Risks are kept to a minimum

To protect lenders’ money, Zopa uses all the safety measures banks use, plus a few more. All borrowers are identity-checked, credit scored and risk-assessed. Lenders’ money is lent out in £10 packets, each to a different borrower, so anybody lending at least £500 has their money spread across 50 borrowers to achieve an ideal diversification. Lenders can override this feature if they wish to gain faster take up of their offers if they are happy with the greater exposure that will result.

Zopa holds Consumer Credit Licences from the Office of Fair Trading and uses the same processes and fraud prevention systems as banks (including Equifax, Experian and Call Credit for credit rating).

Charges are simple, clear and low

Zopa runs a simple and transparent charging model: lenders pay an annual fee of 1% on the money they lend, and borrowers pay a fee of up to £190 which is added to their loan and reflected in the APR figures quoted. There are no hidden charges or any form of early repayment fee.