We are excited to unveil more detail on our new lending products which will be launching in mid-March. We are now able to give lenders more detail on the headline rates and minimum investment amounts for each product.
We are particularly pleased to announce a 6.5% headline rate (after expected defaults) for our new Zopa Plus product. We are introducing a minimum lending limit of £1,000 within Zopa Plus to ensure that only a small proportion of your money is lent to a single borrower (no more than 1%), to diversify your risk.
Please remember that, as with all peer-to-peer lending, your capital is at risk and not covered by the Financial Services Compensation Scheme (FSCS). All advertised rates are projections and are not a guarantee.
Please find below the details of the three new Zopa products:
Since our initial new product announcement we have had a lot of useful feedback from our lenders. We have tried to answer your key questions below, alternately view our full list of FAQs.
New Product Features - FAQs
Can I have multiple products?
Yes. Customers will be able to have multiple lending products with us – you can have a Zopa Access, Zopa Classic and Zopa Plus product at the same time. Only one can be selected for new funds at any given time.
What will happen to my current loans?
As we retire the existing products, your repayments will cycle into the new Zopa Classic product. So the rates will stay the same on your existing loans, but as they get repaid, the repayments will be used to buy new loans within the Zopa Classic product.
How can I move money between products?
If you wish to move your existing loans from Zopa Classic into one of the other new products, you can choose to either sell your loans and purchase new ones within a new product, or turn off re-lending and allow repayments to collect within the holding account and then allocate those funds to a new product. This will be a manual process at launch but we will look to automate it in the coming months.
How did we define the minimum lending for Zopa Plus?
Zopa has advocated the model of diversification by lending your investment in small chunks to many borrowers. Therefore we have set a minimum lending limit to ensure that only a small proportion of your money is lent to a single borrower. This limit was determined by simulating different scenarios for borrower defaults against our current loan book, the outcome was that a lender should have at least 100 microloans to maximize the chance of earning positive returns. Zopa will therefore reduce the maximum borrower exposure from 2% to 1% across our lending products.