Zopa is an online peer to peer (P2P) lending platform. The platform matches individuals who wish to lend to UK based consumers, removing the need for traditional financial institutions.
Their website is currently offering loans from £1000 up to £25,000, with repayment terms ranging from 1 to 5 years. The current interest rate (January 2018) is 3.1%, which is likely to change in time with the market. It is also worth noting that this rate is most likely a headline rate and the offered rate may be higher, depending on your circumstances.
According to Zopa, revenue is generated by charging three types of fees. An "origination fee" is charged which is used to cover the cost of setting up the load - think contracts and processing. A "loan servicing fee" is applied to each contract and deducted from each borrower repayment before the principal and interest are passed on to the lender. Both the origination fee and loan serving fee are included in the agreed APR. The third fee of 1% is for investors who wish to sell outstanding loans to access funds before maturation of the contract.
Zopa Limited is authorised and regulated by the Financial Conduct Authority, and entered on the Financial Services Register under firm registration number 718925.