Zopa | Compare Personal Loans Like Zopa - CreditRaters.com lender
Last updated: 5th Dec 2019

Zopa Review


Zopa is a personal lender established in 2005 as a peer-to-peer lending company, the first of its kind in the world. The company offers an alternative credit facility to those being offered by retail banks. It falls under the regulation of the Financial Conduct Authority, the Prudential Regulation Authority, and the Peer-to-Peer Finance Association. The company does not lend any of its own money, rather it secures investment from investors and lends out those funds in the form of loans. The interest charged on the loans is then given back as return on investment to the investors at a prespecified rate.

Types of loans

Zopa offers personal loans that are lent directly by the company to its borrowers. According to the lender’s website, only around 20% of its applicants are approved for a loan since the approval criteria are strict. The lender allows a risk rating to each applicant, ranging between A* to E, with the former being the best and the latter being the worst. If an applicant is viewed as too risky to fall under any of these risk categories, then the loan application is rejected altogether.

  • Zopa offers loan amounts between £1,000-£25,000, depending upon the eligibility and affordability of the borrower.
  • The APR charged on the loan varies according to the loan amount and the applicant’s financial circumstances.
  • An origination fee is also charged on the loan amount, and the amount depends on the applicant’s individual circumstances.
  • The loans can be taken for a period of between 1 year to 5 years.

Zopa generates the funds it gives out as loans from investors. The company offers an attractive return on investment to the general public of up to 5.2%, which is generated from the markup that is charged on the loans given out. Since the return on investment is market-competitive, Zopa is able to attract substantial investment. So far, the company has loaned over £4.5 billion to around 470,000 customers in the UK, and returned around £280 million to investors as profit.

Since Zopa has a stable funding source in the form of the general public, it is able to loan out at market competitive rates to customers. Also, Zopa has a responsibility towards its lenders to return their funds plus interest earned after a specified period of time, and hence the company refuses loans to applicants who are deemed too risky by the system.

Eligibility Criteria

The following eligibility criteria need to be fulfilled by an applicant to qualify for a loan with Zopa. The applicant must:

  1. Be over the age of 20
  2. Be a resident of the UK
  3. Provide history of addresses over the past three years
  4. Have employment, be self-employed, or be on a pension after retirement
  5. Have a pre-tax annual income of at least £12,000
  6. Have a proven history of making debt repayments on time
  7. Prove that the loan obligations would be affordable considering current income and expenditure.

Pros & Cons

The loan services being offered by Zopa have the following pros & cons:


1) Applicants can find out eligibility and loan rates in minutes

2) No early repayment fees

3) Good customer service

The customer service being offered by Zopa has won multiple awards.

4) Online application process

Applicants won’t have to send any paperwork through the post to Zopa. The application form and any supporting documentation need to be submitted online through the Zopa platform.

5) Does not affect credit score


1) Origination fees

The company charges origination fees to its borrowers which is non-refundable. This fee is built into the APR that is charged to the borrower. According to Zopa, the origination fee is charged to cover costs associated with its operations.

2) Varying rates may be confusing to some borrowers

Since the applicable APR takes into account various factors such as the loan amount and the financial circumstances of the borrower, it may be difficult for borrowers to assess the loan amount they should take considering the change in APR, as a lower/higher amount may result in a smaller APR and a cheaper loan.

3) Long processing times

It may take applicants up to 7 working days from the day they file the initial application to get the loan amount in their bank account.

Borrowing costs of Zopa Loans

Zopa loans range between APRs of 3.4%-34.9%, depending upon various factors including the borrower’s credit rating and affordability, and the loan amount itself.

The following representative APRs are mentioned on the Zopa website, pertaining to different loan amounts:

  1. Between £1,000-£1,999, APR is 15.5%
  2. Between £2,000-£2,999, APR is 9.9%
  3. Between £3,000-£4,999, APR is 8.9%
  4. Between £5,000-£7,499, APR is 3.4%
  5. Between £7,500-£15,099, APR is 6.8%
  6. Between £15,100-£25,000, APR is 4.9%

For example, if a borrower loaned £10,000 from the company for a period of 5 years, the monthly payment would amount to approximately £210.05 at a representative APR of 9.9%. The total interest charged on the loan over the 5-year period would be £2,362.87 and a fee would also be charged amounting to £240, making the total repayable approximately £12,602.87. Again, the rates and fees applicable on the loan vary with every application according to differing circumstances.

  • The origination fee charged by the company is included in the APR quoted to the applicant.
  • The company does not charge any fee if the borrower wishes to repay the loan earlier than the stipulated due date. There are also no hidden charges.
    • The following examples demonstrate the credit charge to be paid by the borrowers when they apply for a loan with Zopa.

      Loan TypeLoan AmountLoan TermTotal RepayableCharge of Credit
      Personal Loan£1,0003 years£1,239.48£239.48
      Personal Loan£5,0003 years£5,265.36£265.36
      Personal Loan£12,0003 years£13,265.64£1,265.64
      Personal Loan£22,0003 years£23,677.2£1,677.2

Information Required To Apply

Applicants need to provide the following information when applying for a loan with Zopa:

  1. Purpose of the loan
  2. Full name
  3. Date of birth
  4. Contact information including email address and phone numbers
  5. UK addresses the applicant has lived at in the past three years
  6. Employment status
  7. Pre-tax income
  8. Whether the applicant owns a home

How To Apply With Zopa?

Applying for a Zopa loan has been made easy by the company. The entire process is completely online to avoid the delays caused by paperwork. Also, the advanced algorithms installed by Zopa in its online application system allow it to reveal the APR applicable to a customer on a loan within minutes, based upon their individual circumstances as stated on the application form. Here are the steps to securing a Zopa loan:

Applicants will see the window as shown below. Since Zopa offers loans between the range of £1,000 to £25,000, it may be tempting for some applicants to acquire a bigger loan than they actually require. Although a bigger amount may result in a smaller APR over time, but still customers are advised to only borrow as much as they need. The time period should be selected based upon the monthly payment that is affordable to the applicant. After making the selection, click on the Get my personalised rates button to proceed further.

Step 1

The next step is to fill out the online application form, as shown below.

Step 2a

Step 2b

Applicants are expected to fill in the details as required by this form as accurately as possible. After applicants have filled out and submitted the online application form, the Zopa system conducts a soft credit search to verify the applicant’s credit history and whether it is suitable for a Zopa loan. This soft search does not have any impact on the applicant’s credit score.

After credit checks have been made, which takes about 3 minutes, and Zopa has processed the information as prescribed in the form, applicants are presented with the APR that would be applicable on the loan.

Zopa may require applicants to submit documentation to confirm the information presented in the form. This includes a valid ID, documents showing monthly income such as a payslip, and bank account information. All of these documents need to be submitted online.

It takes a further two business days for Zopa to verify the information contained in the supporting documents. Once the approval is given on a loan, Zopa takes an additional 5 working days to transfer the amount into the borrower’s bank account (including bank processing times) although it may take longer depending upon individual circumstances.


Zopa offers a middle ground for those who are looking for a small loan at an interest rate that is cheaper compared to that being offered by payday lenders but also has a faster and easier process compared to banks or such mainstream financial institutions. Customers can subscribe to a Zopa loan through an online process and get a market competitive rate on the loan. Also, there are many good reviews pertaining to the customer service facility being offered by Zopa. This makes it easier for customers that are facing issues of any kind with their Zopa loan to get them resolved without making a lot of effort.

No, Zopa is not a payday lender as the loan terms start from 1 year and go all the way up to 5 years, whereas payday lenders usually have loan terms starting 37 days after the loan has been taken out and have a maximum loan term of 18 months. Also, the representative APR being charged by Zopa is much lower compared to that being charged by payday lenders.

According to details mentioned on the Zopa website, the lender usually takes approximately 5 working days from the day of the initial application submission to deposit the loan amount into the applicant’s bank account, although it may take longer depending upon individual circumstances.

Yes, Zopa loans can be repaid earlier than the stipulated loan term without incurring any additional fees. This early repayment can be made through the online platform that is accessible on the Zopa website.

It depends. Zopa judges each application based upon its individual merit. The lender does not accept the majority of loan applications due to a strict criteria that requires applicants to have a good credit history and affordability, both of which determine an applicant’s risk rating. Applicants can find out whether they are eligible for a Zopa loan by simply filling out the online application form and receiving a decision within minutes.

No, Zopa loans are not secured against any property of the borrower. The initial assessment ensures, to a great extent, that a borrower is capable enough to honor the loan obligation with ease.

Lenders Like Zopa

Don’t think Zopa is the right choice for you? Looking for a lender that does not charge an origination fee? Need a lender that has a faster processing time? Perhaps the following lenders are better suited to your needs. These have also been reviewed and rated by Credit Raters.

Amigo Loans (Personal Lender)Amigo loans offer loan amounts of between £500 to £10,000 but require the applicant to have a guarantor. The lender charges a representative APR of 49.9% and allows loan terms between 12-60 months. Loans are processed within 48 hours.
1st Stop (Personal Lender)1st Stop is a personal lender in the UK offering personal loans between £2,000 to £15,000. Representative APR charged by the lender is 31.3%. Loans are extended for a period between 24-72 months. After approval, funds are transferred to the borrower within 24 hours.

Zopa Promo Codes

No promo codes are available for Zopa at this time.