Borrowers pitch for a loan online
Internet lending site Zopa has launched a service enabling consumers to advertise how much they want to borrow and at what rate.
The so-called social lending website already enables people to borrow money from or lend money to each other, side-stepping the banks.
But the group, dubbed the eBay of money, has expanded its service to enable people to pitch for the loan they want.
Under Zopa Listings people will be able to give details of how much they want to borrow, what they want the money for, what interest rate they want to pay and how long it will take them to repay their debt.
The listings can include a photograph and eventually also a video, as well as any information the borrower wants to give on their personal circumstances to help lenders decide whether or not they want to advance them the cash.
Individuals who decide they want to lend money to a particular consumer can bid on the listing, stating how much they would be prepared to lend and at what rate. If the full amount is reached the loan will go ahead, with the borrower charged interest based on the different rates people are prepared to lend at.
Currently people lending money through Zopa do not get a say in who their money is lent to. They are only able to choose what risk category they are prepared to lend to and how much interest they want to charge.
The group claimed the move would introduce an openness, transparency and market effectiveness that had not previously applied to people looking to borrow money.
Zopa will continue to vet all would-be borrowers to ensure they are credit-worthy and have good repayment histories.
Giles Andrews, managing director of Zopa UK, said: “The launch of Zopa Listings is an exciting new avenue for our members, bringing new levels of individuality and personal control to social lending.