Unsecured lending recommended by Zopa

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Unsecured lending recommended by Zopa

Tue 20th Feb 2007

UK savers who have already reached their annual limit in relation to their Isa threshold have been urged to consider an alternative investment for their excess cash.

According to Zopa - the marketplace where people can borrow and lend money - Isa customers should look into the idea of placing their overspill savings into unsecured lending.

By lending through Zopa, individuals are able to receive an average return of 6.85 per cent a year, which can rise to as much as 14 per cent.

Potential investors can choose between different markets that determine the amount of risk attached to a specific investment, while lenders can determine for how long they wish to lend money for and then set their rate accordingly.

James Alexander, co-founder and CEO of Zopa, said: "Those with larger investment portfolios would benefit from the diversification that this new asset class offers and all investors can benefit from the very attractive returns on offer without taking anything like the risk of investing in the stock market."

At present the limits for Isa investment is set at either £3,000 or £7,000 per tax year, depending on the type of account.

Zopa says that it thoroughly vets all new borrowers in terms of credit rating and when the sum of money in question to be lent is over £500, it is broken up between at least 50 borrowers.

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