I almost thought this was an April Fools joke, but it appears to be real. Here's the scoop from Gizmag:
"Zopa hooks up creditworthy people who want to borrow money with people who are happy to lend it to them. And because there's no middleman (e.g. bank), the borrower just pays a 1% exchange fee upfront. Without the greed and inefficiency of a financial institutuion, both borrower and lender get a better deal than they would otherwise. For borrowers, the money is cheaper. For lenders, there are no fees, better returns and the facility to manage the risk and seek even higher returns.
"If there were a popularity poll for organizations, banks and most other financial institutions would rate towards the bottom of the list, somewhere between monopoly Telcos and the Royal Institute of Executioners – which is why we think Zopa’s new angle on democratising the lending of money makes so much sense and will garner such a favourable reaction from so many people.
"When you lend money through Zopa, there are no charges – the only fee Zopa takes is 1% from the borrower. That means that as a lender, you’ll get a consistently higher interest rate than you could get elsewhere. You can also choose what level of risk you’re prepared to take, with an interest rate that reflects the risk.
"Borrowers are assessed by Zopa into different markets based on their credit rating and lenders can choose which market they will lend into and what level of risk they’re prepared to accept and the rates are higher in the markets for borrowers with lesser credit ratings. Borrowing is not the harrowing task it is at a bank though – and apart from the 1% fee, there are no other fees whatsoever. There are no penalties for paying off a loan early and the entire scheme seems so very sensible, you’d think someone would have done it sooner." Source: Gizmag
I know. I like the idea, but taking the plunge is another story. Wonder if it's enabling loansharking: you pick a high risk candidate and charge %30 interest and there you have it.
I almost thought this was an April Fools joke, but it appears to be real. Here's the scoop from Gizmag: