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Who are you lending to?

When you lend through Zopa’s peer-to-peer platform, how do we decide who gets your cash?

We employ highly sophisticated underwriting procedures to match the money advanced by our many thousands of lenders to the right borrowers. Our database contains 11 years’ worth of information everyone – whether we approved them or not – who has applied for a loan with us. So when we look to build our credit models and make lending decisions, we can draw upon a dataset with information on more than 2 million people.

Meeting our minimum criteria

We have a lot of conditions that need to be met before we’ll approve a loan. Potential borrowers must complete a detailed application and undergo a thorough credit check. There’s no fast-track to getting a loan with us. Everyone applying must meet certain minimum criteria:

  • They must be at least 20 years old.
  • They must have a visible credit history – that is, some record of previous borrowing.
  • They have to have a good track record of being able to repay their debts in full and on time.
  • They must be a current UK resident.
  • They must be able to show they have lived in the country for the previous three years at least.
  • They must have a stable income; even our E market borrowers typically earn the UK average income.
  • They must be able to afford to repay the loan they have applied for.


As far as this final point is concerned, Zopa will check the borrower’s other financial commitments, such as housing costs or other debts, and compare them with income levels.

Putting borrowers into risk categories

Using their application, our proprietary data models and credit information from two external bureaus, we sort approved borrowers into one of six risk categories (or markets): A*, A, B, C, D and E.

About our risk markets

A* and A markets cover individuals who have a long-term record of repaying their debts on time and who have never missed a repayment – they also have a low overall debt-to-income ratio.

The other categories are likely to have a higher debt-to-income ratio, but they all still meet the minimum criteria above.

Borrowers in category E typically earn around the UK national average income (£27,500, according to the ONS Annual Average Salary Survey for the tax year ending in April 2015), while those in other categories earn more.

Generally speaking, category A* and A borrowers are more likely to use their loans to pay for home improvements or new cars, while those in categories C, D and E are more likely to borrow in order to consolidate existing debts. Find out more about our risk markets.

Lending to multiple borrowers

Finally, we split up your money into chunks and match it to multiple borrowers across a range of the risk markets we’ve described above. This policy of diversification reduces the risk and helps to keep potential losses to a minimum.

If you lend through Zopa Access or Zopa Classic, your funds will be shared only between borrowers in categories A* to C – and you will also be covered by the Safeguard fund.

Alternatively, you can seek higher returns by taking on a higher level of risk through Zopa Plus, which isn’t covered by Safeguard. This means around 30% of your money goes to category D and E borrowers (the rest goes to A*-C customers).

The return on your money you receive is a blended average from across these borrowers.