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Zopa launches unique ‘Young Markets' service

30th July 2008 Print
Zopa - the world's first person-to-person online lending exchange (uk.zopa.com) - has just launched its new ‘Young Markets' service to help those aged 20 to 25 obtain unsecured loans at very competitive rates. The new service has been developed to help the many people of this age who cannot get loans at decent rates simply because they have little credit history - NOT because they have a bad one.

As is the case for all would-be borrowers who come to Zopa, young people with a bad credit record or those looking to borrow more than they can reasonably afford will still be declined. But those with a clean record or only a limited record will be able to apply for loans, subject to Zopa's normal identity checks etc.

Zopa lenders can choose to make offers to these young applicants, with the added attraction of being able to charge a higher rate of interest because of the higher risk that these as yet unproven younger borrowers represent. So whereas the safest borrowers coming to Zopa can typically get a £5000 loan over 3 years at around 8.5%, Young Market borrowers will be able to get the same loan at around 12.5%.

Giles Andrews, UK Managing Director and cofounder of Zopa said, "We are already providing an invaluable antidote to the credit crunch for people over 25, as Zopa loans continue to be available to a wide audience and at some of the very lowest rates available anywhere. With our Young Markets launch we are delighted to be offering this unique service to young adults who have been unnecessarily blocked from accessing competitive loans up to now simply because they have a very limited credit history.

And for Zopa lenders, the launch offers them further choice and control in both the rates of return they can obtain and the people their loans will help. Lenders are already telling us they are enjoying helping young responsible adults poorly served by the banks.

Because it's people rather than banks who do the lending at Zopa, no borrower is suffering higher charges or a more restrictive lending practice at the hands of banks trying to make up for losses incurred through their own overzealous sub-prime lending. And with the default rate on our loans remaining at a tiny 0.04%, at Zopa it's like the credit crunch never happened."