http://uk.zopa.com/ZopaWeb/public/about-zopa/how-it-works.html
Link: How it works .
"There's no smoke and no mirrors - unlike at a bank. Because banks use your money to make even more money for themselves. They lend some of it out, gamble some on the price of tin or the Yen depreciating, and invest the rest in any other money-making schemes they can think of.
"Whereas at Zopa, people who have spare money lend it directly to people who want to borrow. There are no banks in the middle, no huge overheads, and no unethical investments.
"So that the Zopa marketplace works smoothly, we've put a series of checks and balances in place. This is how it works:
"We look at the credit scores of people looking to borrow and work out whether they fit into the A*, A, B, C or Young market. If they're none of these, then Zopa's not for them.
"Lenders make lending offers – 'I'd like to lend this much to A-rated borrowers for this long and at this rate.'
"Borrowers size up the rates offered to them, and snap up the ones they like the look of. If they don't like the rates today, they can come back tomorrow to see if things have changed.
"To reduce any risk, Zopa lenders only lend small chunks to individual borrowers. A lender lending £500 or more would have their money spread across at least 50 borrowers.
"Borrowers enter into legally binding contracts with their lenders.
"Borrowers repay monthly by direct debit. If any repayments are missed, a collections agency uses the same recovery process that the high street banks use.
"Zopa earns money by charging borrowers a £94.25 transaction fee and lenders a 1% annual servicing fee.
"And everyone's happy – lenders get great returns, borrowers get great rates, and there's not a bank or a bank manager in sight."
"Who we're backed by"
http://uk.zopa.com/ZopaWeb/public/about-zopa/Who-were-backed-by.html
