It's basically a loan site that cuts out the banks. People who want to borrow cash (buyers) do so from other people using the site that wish to put their own money up to be borrowed (sellers), and they get it back with interest on top. It's a sound idea, and has won loads of business and innovation awards etc.
The only snag is your money is tied up for a minimum of 3 years as a seller, as that's the lowest borrowing term. With interest rates so low at the moment in banks and building societies etc, you can get a fair bit more here. You can even decide who to lend to....lend to A credit rated people and you'll get lower interest, but much more likely a 100% payment return....or higher risk category C or young borrowers who borrow at a higher rate....which makes you more interest, but some risk that they might miss a payment, which means some chasing to be done on Zopa's behalf. You of course get your money back, just no return on it like you would from a responsible person who pays on time.
It's also cheaper to borrow from Zopa than a bank, as their fees are much lower. They only accept people with a half decent credit score too, so you should be quite safe either way.
I'm in no position to do this at the moment for a worthwhile amount, but anyone who has got the cash, you could literally get yourself some freebie money for a rainy day in a few years.
