Peer-To-Peer Lending Better Than Saving Account ISA’s?


Today, the ubiquitous accessibility of the Internet is revolutionising the arcane industries once considered territory solely accessible to the archaic institutions of finance. The lending process once controlled by bankers has become more accessible and yielding higher returns than ever before thanks to peer-to-peer lending. Peer-to-peer lending is an inexpensive means of streamlining the lending process that is handled completely online for a better return on investments and a lower interest rate on loans than anywhere else. Compared to physical, financial institutions, this process virtually eliminates the costs and fees associated with staffing for and the processing of loans to keep surcharges low.

Additionally, well-established brands such as Zopa offer reliable service you can trust. The risk of investing in collapsing peer-to-peer lending company in an economy filled with failed upstarts can be overcome by choosing from the tried and true options. Zopa, Funding Circle and Ratesetter have each proven themselves to provide consistent quality financial monitoring to connect lenders to trustworthy borrowers. But, even in the case of small companies failing, the loans themselves are made directly between lenders and the various recipients assuring the protection of investments due to any potential externalities.

This works in tandem with the spread of qualifying loan recipients to minimise damage from any individual defaulting on loan repayments. The system of peer-to-peer lending functions to ensure maximum safety for the lender while simultaneously maximising return without putting undue strain on the loan recipient. The premise of peer-to-peer lending is the efficient, sustainable exchange of services. This affordability and reliability make peer-to-peer lending the best option for mediating private loans today and guarantees that this web-based service will continue to lead the market for years to come.

Similar to a mutual fund, this process allows lenders to efficiently and affordably lend to approved lenders for upwards to a seven percent return consistently. Through peer-to-peer lending, you can minimise risk while simultaneously tapping into one of the largest and most diverse markets available by directly investing in the people of the United Kingdom. Peer-to-peer lending is a cutting edge, innovative online service that paves the way for a new kind of investment.

Cash flow will no longer be mired in bureaucracy; and this direct exchange of funds between provider and borrower makes lending simultaneously inexpensive, efficient and profitable. This process revolutionises lending by maximising the percent return on your investment in a way that no physical financial institution can match. The internet, once a cheap disguise for getting rich quick schemes and all forms of fraud, is now in the hands of a new generation with a deeper understanding of the tricks behind and the true potential of the internet who are utilising this resource for practical, sound investments. Peer-to-peer lending is setting a precedent for secure investments in the future by tapping into the Interneta€™s true potential.

As interest rates in the UK plummet to an all time low, savvyA people have found other ways of garnering savings through the three most popular lending websites. The government has also set out a Personal Savings Allowance which is A£1000 tax-free on interest you have made.

[su_note]Your investment could be at risk. Please be aware that there is a possibility that borrowers may default on their loans. P2P companies like Ratesetter have implemented certain safeguards to protect lendors.[/su_note]

We have looked through all Peer-to-Peer lending facilities online and consider the subjects below to be the best options. We have provided the pros and cons of each provider and our personal favourite below.



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Funding Circle

FundingCircle provides customers with loans and lending options on a peer-to-peer system. FundingCircle launched in 2010, with the main focus of helping out small businesses to get their feet off the ground. Lenders can receive great interest rates, going as high as 15% if they are happy to take the risk. Businesses with a lower credit score will be considered aA higher risk therefore required to pay a higher amount of interest.

FundingCircle’s lending term is between 6 months – 5 years with a minimum investment of A£20 per loan. In the event that you want to withdraw your funds earlier than agreed, you may sell your loan parts to someone else who wants to carry on the loan. If you choose to sell, FundingCircle will ask for a fee of 0.25%.

FundingCircle provides lenders with important information that assists them in making judgements on whether to lend their own cash to small businesses. Stay clear of businesses with a bad credit score and make sure that you only lend your money to companies with a relatively high-risk band score. Read the business profile summary to find out a bit more about the company. Searching them on Google will give you a better view of their business model. These are unsecured loans, so if the company can’t pay it going to be very difficult to get your money back.


Launched in 2010, Ratesetter established itself as one of the most popular person-to-person lenders in the world. Ratesetter’s system is considered to be the easiest platform to work with compared to its competitors. Ratesetter is lower in terms of interest rate but implements safeguards that protect your investment if there is a failure of payment.

One of the reasons why we chose Ratesetter as our favourite, is because of the confidence they give lenders knowing that their funds are protected if borrowers default on payment. Ratesetter calls it The Provision Fund, a safety net for lenders. Ratesettor has paid nearly A£18 million to The Provision Fund with a coverage ratio of 124%. If you’re still not sold by Ratesettors high-quality service, take a look at Trustpilot score of 9.8/10.


Zopa has been in business for over 11 years, longer than FundingCircle and Ratesetter. Zopa provides lenders with three types of lending options:

Zopa AccessA 

This option is for new lenders that just want to test the waters, this will provide you with a rate of 3.5% annualised interest.

Zopa Classic

This will give you a higher rate of interest and is used for lenders to leave and accumulate through time. The rate is 4.3%, a relatively competitive rate.

Zopa Plus

This option is used for lenders that are comfortable using Zopa. The rate of interest is 6.7%, a higher return but for a higher risk. This product is not protected by Zopa’s Safeguard Risk Fund.

If you want to take out your money with Zopa’s Rapid Return system, expect a charge of 1%. Zopa will be seen releasing the Finance ISA alongside cash, stock and shares ISAsA to its customers. They expect to launch the ISA in the 2016/17 tax year.


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