Zopa has been around since 2005 and allows people with spare money to make money by lending it to those who are looking to borrow money. Zopa is an online money exchange and aims to offer a higher return for those lending money and a lower rate for those looking to borrow money by removing the middlemen.

According to Zopa lenders have made returns of over 9% over the last 12 months which is very attractive if you are looking to lend someone money given that the average UK bank savings account is paying less than 1% at the moment.

If you are interested in making money by lending money through Zopa there are a number of measures in place to protect your money. These include every borrower being risk assessed, credit checked and identity checked. To reduce your risk your lendings are spread across a number of borrowers so if you lend £500 your money is spread across at least 50 borrowers. Also if someone does miss a loan repayment collection agencies are used to recover the any outstanding monies.

Lending money is always carries an element of risk and while Zopa state that they have only experienced 0.18% of bad debts to date an economic downturn could lead to an increase in the number of people being unable to repay their loans.

If you are interested in making money by lending money then take a look at Zopa for more details.