Budget & Saving

Instant access for Zopa borrowers

Zopa, a consumer lending website, has said its users can now instantly access the money they have loaned.

Feedback from consumers influenced the move, with the site saying that some people have admitted not wanting to lock their money into any three-year or five-year fixed term.

Zopa, which stands for "zone of possible agreement", said the new feature makes lending through the site more attractive because an average 8.1% return is collected by users after charges but before bad debts. This compares with the average 0.79% interest paid out on instant access savings accounts.

The website works by people putting up specific amounts of money, with fixed interest chosen by the individual.

To reduce the risk of default, anyone lending more that £500 has their money split between at least 50 different borrowers, and all borrowers are identity-checked, credit-scored and risk-assessed.

Under the new "rapid return" feature, lenders will be able to access some or all of their money in most circumstances before the loan term is up, for a 1% charge.

The feature will work through Zopa finding other consumers who will take on the loans at exactly the same rate, meaning the borrower will be unaffected by the move.

But to protect borrowers who are taking on the loans, it will not be possible to transfer debt on which a payment has ever been missed.

Sam Jackson

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