About the markets
All lending and borrowing happens in the Zopa
markets. The Zopa markets are a way of grouping
borrowers according to their credit score and
how long they want to borrow for.
We look at the credit score of every Zopa member to work out whether they fit into the A*, A, B, C or Young market.
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A*-rated borrowers are those with the highest credit scores, followed by A-rated borrowers, then B-rated borrowers and C-rated borrowers
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C-rated borrowers have a higher credit score than most of the population
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Young market borrowers are aged 20 to 25 and often find it hard to get unsecured loans. Unlike other loan companies, we don't penalise a borrower just because they're young and have very little history of repaying debt. Instead, we make sure that we can identify them properly, check their employment and affordability and that all the other information they give us is OK.
So the Young market is where responsible young adults can get the financial help they need during their early careers from lenders who are prepared to take a little more risk for a little more return.
- Meet Paul
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Paul is married to Pauline and they have two kids - Pauly and
Paula. They live in a small village near Nottingham, in a 4-bedroomed
house they bought just before little Paula was born 12 years ago. Paul
has repaid most of the mortgage already, and will have paid it all off
within the next 3 years. Pauline and he have several joint credit cards
which they use regularly for large purchases (holidays, electrical
goods etc) and which they always pay off on time. All their utility
bills are paid via Direct Debit, so they're never late.
Paul is looking to borrow £10k in order to buy a car for
Pauly to learn to drive in (understandably Paul won't let Pauly
anywhere near his nice sports car).
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- Meet Michelle
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Michelle is married to Michael, and they live together in a
3-bedroomed house in London. They have a ginger cat called Mickey, whom
they bought when they moved into the house, 9 years ago. She already
had a mortgage when they moved in together, so she paid that off and
took out a joint one with Michael. They have not missed a payment to
date, and are ahead with their repayments. Michelle owns several store
cards along with a Visa card, all of which take a battering on weekends
but which are always paid off come the end of the month.
Michelle is looking to borrow £8k to fund a long-postponed
honeymoon. They're planning a 2 month luxury round-the-world trip, and
hope to do as much diving as possible.
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- Meet Simone
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Simone lives in a spacious flat in an ultra-trendy housing
complex in the centre of Manchester. She lives by herself, but her
boyfriend Simon often stays over. She bought the apartment 6 years ago,
and has a 25 year mortgage which she is gradually paying off. She has
two credit cards which she uses fairly regularly, though she puts most
purchases on her debit card. A spell in the Guides as a youngster
installed in her a strong belief in organisation, and she always pays
her bills on time and ensures she's on the electoral roll.
Simone wants to borrow £5k to refurbish her kitchen, the
only area of her flat she's not 100% happy with. She loves to cook, but
feels the current kitchen is holding her back in her bid to master
Italian cuisine.
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- Meet Norman
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Norman lives in Norwich, in a semi-detached house which he
bought 4 years ago. He has a small dog called Norbert who he walks
twice a day. Norman has a responsible attitude to money, and has just
finished paying off his student loan. He uses his credit card sensibly,
preferring to stick to his debit card where possible. During his
student days he was not on the electoral roll, but he has been for the
last 6 years now.
Norman is borrowing £1,500 to pay for laser eye surgery
(he's sick to the back teeth of having to mess around with contact
lenses, and figures the operation will pay for itself in the long run
anyway).
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- Meet Gordon
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Gordon graduated from university two years ago and has been working for a large business in town ever since. He's rather chuffed because he's been promoted once and is already eyeing the next one up. He's living with his parents while he repays them the money that they lent him to go travelling in his gap year, but the commute takes ages and is expensive. He'd really like to move into a flat with his girlfriend, closer to work and their friends. Most of Gordon's spending is done on a Debit card so he knows he's got the funds to cover each purchase as he makes it.
Gordon would like to borrow £2500 in order to put down the 6 week deposit on a rented flat for him and his girlfriend.
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Which markets should you lend in
There are 10 markets for you to choose from: A*36, A*60, A36, A60, B36, B60, C36, C60, Y36 (Young) and Y60. The numbers correspond to the loan duration the borrowers are looking for. So the A36 markets is full of A-rated borrowers looking for 36 month loans, the Y60 market is full of young people, aged 20 - 25, looking to borrow for 60 months and so on.
When deciding which market to offer in, bear in mind that lending to more creditworthy borrowers has a lower risk level, but that you can get potentially higher returns by lending to B, C and Young market borrowers. And, in general, the longer the loan duration, the higher the rate of risk and return.
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