Zopa (zone of possible agreement) is something I came across about four months ago, I was looking to improve the return on my savings as the bank rates are shall we say diabolical at the moment. With my day to day savings account only attracting a measly 0.25% interest I needed somewhere to get the 5-6% I’d been used to in past years. What I found was Zopa it’s a bit like a bank they take money from people and lend it to others, however the lenders get to say how much interest they want to charge and the borrows get to ask for the rate they want.

It costs lenders 1% of what they have lent out over the year, so the return rate is 1% less than the loan rate. For borrowers the is an £118.50 arrangement fee.

Social Lending is a smarter, fairer and more human way of doing money. It's like borrowing and lending with your friends and family - except there are thousands of people you can lend and borrow with. Both lenders and borrowers get better rates, because Social Lending is more efficient than the traditional banking model. Banks have massive overheads, with thousands of employees to pay and hundreds of branches to maintain. So they have to take large margins on the money that passes through them. An online marketplace where people meet to lend and borrow has huge cost advantages – which is why Zopa members get a fairer deal when it comes to their money.