Fairbanking Foundation’s latest ratings report – “Fairbanking Ratings: Reaching for the Stars” – has reviewed five key product types offered by banks. For the first time ever, one of those products was personal loans.
Two of the UK’s premier peer-to-peer lenders – Zopa and Ratesetter – were factored into the review, and both topped the four star mark. Although Ratesetter narrowly bested Zopa’s overall rating, the latter was particularly commended for its efforts to enable the borrower to easily make repayment on loans. Zopa scored the maximum rating in this category, outdoing all major banks. Where other lending institutions have focused on ensuring customers understand the consequences of getting into difficultly, Zopa appear to be more focused on preventing difficulty from arising at all.
The ratings devised by the report were based upon a survey completed by 58% of the 55 financial institutions to which it was sent. That questionnaire focused upon three main areas: borrowers making a good decision, easily making repayments, and providing help early if a customer is having difficulties or their circumstances change.
A few specific features of Zopa were praised by the report. The platform distinguished itself through rigorous background checks. The report states that: “Checking into the companies of the self-employed and reviewing bank statements may not reduce bad debt significantly, but it does set a tone of expecting customers to take the provision of information seriously”. Zopa also allows borrowers to repay loans ahead of schedule at no extra cost, with the innovative “Make Extra Payment” button.
The results of Fairbanking Foundation’s survey can be viewed below.