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Zopa Interest Rates: Down Today

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By on 2 June, 2015 | Read more by this author

This article is updated as and when Zopa changes its rates.

Zopa*, the “super prime” personal loans P2P lending website, has compressed its rates further today, dropping from 4% in the three-year market to 3.8%. Its interest rates for five-year loans remain at 5%.

This is the first time Zopa interest rates have changed in many months.

These are the rates after fees and expected bad debts – which are intended to be covered by a bad-debt provision fund.

How Zopa interest rates compare

Zopa's nearest competitors, RateSetter* and Lending Works*, pay over one percentage point more over three or five years.

Landbay* and Wellesley* pay over half a percentage point more over three years. (Landbay has no five-year deal, but Wellesley pays half a percentage point higher over five years too.

To see more on how Zopa now compares to others, go to Safest Peer-to-Peer vs Savings Accounts.

Why the lower rates

But none of those other P2P lending websites have Zopa's record.

Supply and demand is the key factor in interest rates. There is a high supply of cash from individual lenders, who have learned to trust Zopa over 10 years.

Borrower numbers are growing too, but it appears they're not growing fast enough to keep interest rates still. More money chasing fewer borrowers pushes rates down.

Lenders are accepting lower interest rates because they perceive the risks to be lower.

They have good reason.

Not only has Zopa been around the longest, but it has incredibly low bad-debt rates. For nearly half a decade, losses have averaged just 0.25% per year. While Zopa could be relaxing its selection criteria a bit (see Zopa Risks & Lending Speed Rise, Rates Stable) it looks to me like there's a long way to go before we need to start to worry.

Another factor is the natural fit. RateSetter, one of Zopa's nearer competitors, would probably like to see interest rates come down to help attract more quality borrowers, but it is struggling to achieve this. Zopa has.

Lower rates might dissuade some Zopa* lenders, which will make it easier for us to get our money lent out faster.

Read more: Get Started With The Safest Peer-to-Peer Lending Websites.

*Commission: our service is free to you. All P2P lending companies will be included in our fair and accurate comparison tables once we have finished adding them all. We receive compensation from all the companies mentioned above, and other P2P lending companies not mentioned here, for providing you with their 4thWay® Risk Ratings and 4thWay® Insight Reports for free, which pay us when you click through from us and open accounts with them. This doesn't affect our editorial independence. Learn How we earn money fairly with your help.

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Today’s average interest rates

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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.

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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 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.

Got it

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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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