How to do so.
If you’re trying to think of ways in which you could be making money from your savings, then you might be wondering about something new that you could try. One of the bad things in the modern world is that the interest rates for savers aren’t that great, so that means that unless you actually invest in something, you’re not going to be able to make all that much money from your hard saved cash.
In addition to this, if you’re wanting to borrow money from the bank for whatever reason, it is very hard to get a loan. One of the reasons that the country is in so much trouble financially at the moment is because people are borrowing money that they cannot afford to pay back, and that deficit has to come from somewhere. So, both savers and borrowers have a problem, but now there is a way that they could work together.
An independent banking website called Zopa is one of many new websites which allows its users to give short and long term loans to each other at a rate decided by them. Most loans are around 8%, but they can be as low as 5% and as high as 12% if your credit rating isn’t very good as a borrower. This means that the savers would get a higher rate of interest than they would be able to get if their money was in the bank, and those who want to borrow money would be able to get it a lot more cheaply than if they went to their own bank. This method is as safe as putting your money into a bank, as the website is covered by the same debt laws as any other, meaning that your money could be collected if they didn’t pay it back to you for whatever reason. You split up your money into £10 chunks so that there is less chance of you being affected by somebody not paying their debt back to you, and this means that you soon make a good profit. You get payments every month, and have the option to have those payments fed straight back into the system if you wish to, so your interest would start earning for you right from the second you gave the money to your client.
If you’re thinking about doing this, then it would almost certainly be worth a go. With an option to get money out of the system quickly if you should want to (although you do have to forfeit a small amount of the interest that you would have earned), there is no reason to think that your money would be tied in if you should ever need it for any reason. Of course you should approach with caution with it being a website, and never put all of your money into one source. Ensure that you always have a back up plan with your finances so that you would be able to have money if there was ever an emergency.
Published in: Personal Finance