Back to Zopa Blog

Introducing Zopa’s risk markets

When we launch our new lender products, lenders will have the opportunity to lend across a wider range of risk markets. In order to help you decide which product is right for you, we’d like to share a bit more detail about Zopa’s approach to managing risk and an introduction to our different risk markets.

Zopa has more than 11 years of experience in managing risk in the UK personal loans market. We have a dedicated team of risk analysts who interrogate borrower performance against expectations and regularly tweak our models. They are obsessed about measuring risk and pricing it appropriately so that we generate the target yield for our lenders.

At Zopa, borrowers must meet a number of minimum criteria in order to be eligible for a loan:

  • Be at least 20 years old
  • Have credit history we can see
  • A good track record of repaying debt
  • Be a current UK resident
  • Have 3 years of address history in the UK
  • Have an income (at least £12,000 per year, this could be a salary or pension)
  • Be able to afford the loan (based on an assessment of their current financial commitments vs. income)


On top of these minimum criteria, Zopa also classifies borrowers into different risk markets depending on the associated level of risk.

How do risk markets and lending products match up?

Zopa’s model of splitting lenders’ money into micro-loans (between £10 and 1% of your total investment) means that across all our products your money is lent to a range of borrowers in different risk markets to diversify your money and reduce the risk of potential losses. In the Zopa Plus product we will also introduce a minimum investment of £1,000 to ensure that your money is spread across at least 100 borrowers.

Lenders selecting Zopa Access or Classic lend to a range of A* – C borrowers and will have Safeguard cover.

Lenders who choose Zopa Plus do not have Safeguard cover and will see around 30% of their money lent out to D and E markets, with the rest lent to A*-C borrowers. The mix of loans in Zopa Plus provides a higher projected return, even after higher expected defaults.