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How Zopa Lends Your Money

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By on 25 November, 2014 | Read more by this author

Mat Gazeley from Zopa has just published more details about how Zopa matches your money to borrowers in a blog post.

The key takeaways

Mat explained that, above all else, Zopa lenders who receive loan repayments are ahead in the queue when it comes to re-lending their money compared to any new money from lenders.

The queue for new money is based on a straightforward first-in, first-out approach.

Aside from leaving Zopa's “Auto Top Up” feature switched on, there is no way to boost your position in the queue, explained Mat. If you move your funds off queued to lend and then put them back, you will lose your place in the queue, but you won't lose position if you change your lending term.

Zopa estimates what two days' worth of lender money that can be lent out is, and puts it in a queue. This is lent inside two days.

Lenders' money is split into very small chunks so that it is spread across lots of borrowers. The mix of borrowers, from the best grade to the worst, is automatically spread so that you get the headline interest rate that Zopa displays on its website. The most you'll lend to one borrower is 2%, so that you'll have at least 50 borrowers regardless of how little you lend.

Lenders might like to know where they are in the queue, so that they know where they stand. In his blog, Mat wrote: “We value transparency regarding your lending here at Zopa and that is why we are working to provide better visibility to see where your money is in the lending queue. We are working on improving this and updates will be introduced to My Zopa over the coming weeks.”

Regarding your own unlent money, Mat wrote: “We currently show the total queued to lend figure as one number combining repayments and new money. We are looking at introducing an easier and clearer way to display how your money is split into different tranches and will be looking to update My Zopa in the coming weeks with this new level of detail.”

Sources: Zopa

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This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

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Why are Orchard’s interest rates different?

Orchard’s lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Orchard’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

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