Saving & Borrowing Through Zopa
October 27, 2007 – 5:48 amI know that some of us can always do with a loan. There are some who keep asking ME for a loan but I don’t know why they think that I have spare cash when they earn more than I do.
Anyway, whilst my friend and I were exploring ways to grow his money, he brought up Zopa. I have heard of Zopa last year when it appeared on CNN Money and BBC News but did not explore it further. Now that I have checked my various investment options, which you could read about the low returns in my previous posts, I decided to see if Zopa could offer better return on investment.
Zopa is actually a social financial site where people become lenders and borrowers without going through a bank. This will cut down on interest rate significantly and is best for borrowers who are looking for a quick and cheap loan. On the other hand, if you have some spare cash and through Zopa give out a loan instead of saving it in a bank you will be getting a higher interest rate and better profits.
Does this sound complex? I think that with a controlled environment within the Zopa community where borrowers undergo stringent credit checks and are risk assessed, both parties will stand to benefit from a loan arrangement like this.
Would the growth of Zopa mean that less people would save money in conventional banks? I don’t think so because there will always be people who would need the security that major banks provide.
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