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Zopa introduce Rate Promise
Zopa have today announced they are introducing a Rate Promise which ensures that lenders earn an average return of 5% AER over the lifetime of 5 year loans originated within the offer period. If lenders prefer a shorter period, Zopa are promising a 4.1% AER return for 3 year loans.
Lenders' money on Zopa will be spread between many borrowers and some will be offered at more than the promised rate, and some at less than the promised rate, but the weighted average rate will be at least the rate they have specified.
Here is the full email:
Kick start 2014 with our Rate Promise and earn an average return of 5% on money you lend for up to 5 years between 9 January and 3 February 2014.
Top up your offer today to take advantage of the Rate Promise.
How does the Rate Promise work?
- You'll lend money in small chunks to different borrowers. You may lend some of your money at more than 5%, while some may be lent at less than this. The Rate Promise ensures that the money you lend within the Offer Period, for up to 5 years, will earn an average return of 5% over the lifetime of those loans.
- Rates on Zopa may vary over time and any subsequent lending outside of the Offer Period, including re-lending your repayments, may earn higher or lower average returns.
- If you prefer lending in a shorter time frame, then you can earn an average return of 4.1% for up to 3 years - same rules apply.
Please read the full Rate Promise Terms and Conditions.
This move by Zopa signals the start of the January / February rise in lending rates as borrowers look to pay off credit cards and other higher interest debts.