Zopa

I should probably have known about it already, but I had never heard of Zopa until ten days ago.

It’s simply a ‘social lender’ who will take your money, split it into small packages, and then let different people borrow one package each. The effect is that you get a much better interest rate than you would in a savings account, but obviously you are running a risk if they all default.

Here’s a video about it:

I’ve started out by lending out £50 over 48 months. The initial process is very slow – after creating your account you need to transfer money into it, and that has taken me a week and a half, but now I’m up and running.

I’ll blog about it again if it turns out to be better or worse than expected.