Did you know about ZOPA in UK?

Debt arises from money crisis. The moment we talk about debts, we start thinkng about bankruptcy or other horrors that can distort our lives. But why so? Debts are a problem but not something that has no solution. In UK, if you are in debts you can opt for formal and informal routes out of debts such as Administration Order, IVA, Trust Deeds, debt consolidayion as well as debt management.

The moment we realise that we are in debts, the first thing that strikes us is lending or borrowing in order to pay off. Did you know in UK there is a place where you can borrow without the interferance of any middleman?

Zopa is a market place in UK where people lend and borrow. You will have to join ZOPA in case you want to borrow. But for getting into ZOPA you need to earn at least £25000 a year before tax. ZOPA is not for people who are in formal debt solutions. So they check out your credit report prior to offering membership.

ZOPA stands for Zone of Probable Agreement. From a ZOPA market, you can lend around £1000 till £15000 along with a contract of £10 each in multiples of £500. For utilising the services at ZOPA, yu will have to pay them a fee but you can clear off your ZOPA loans at any time without any additional charges. Yu can lend money from ZOPA for 6 months till five years. The interest rates as seen from a market point of view, vary and depends on the lenders. You can choose according to your needs. Once you have borrowed, the rate is fixed during the loan time period and is not subject to changes. This is infact a good substitute for High Street Lending beacise a borrower can make selections.

ZOPA echoes the system of a commercial loan agreement. Here the borrower will lend a certain amount of money at a set interest rate for a set time period, which is a maximum of five years with Zopa.

There are four bands of borrowers in ZOPA – A*, A, B or C. These bands are regulated by their credit rating and lenders assign the rate at which they are prepared to hand the money over for each band.

Debbie Brown is a freelance writer and publishes debt advices at Debt And Debtor and UK Debt Assistance. For more debt advices she recommends you to visit http://www.yesdebtfree.co.uk/.