Zopa

Obi167

What happens to your money if you invest in Zopa and the borrower doesn't pay?

talana

http://uk.zopa.com/ZopaWeb/public/help/help-faqs-lending.html#defaults

If a borrower defaults, Zopa and/or a collections agency will chase them for the money, just as would happen with any other lender.

Ultimately though, you have to be prepared for bad debt that won't be recovered. So you should take an estimated bad debt rate into consideration when putting together your lending strategy.

darich

Bad debts are minimised though because zopa splits all lent money into blocks of £10 so if someone defaults on your money, it's only on £10 of it.
Effectively borrowers borrow £10 from as many people as required to make up their loan so the risk is reduced and spread amongst all the lenders.