In addition to growing to more than 10,000 US community members, a number of Zopa borrowers have actually achieved a negative effective rate on their loan.

"Our tremendous success in such a short period of time demonstrates the effectiveness of the Zopa social finance concept in the U.S.," said Doug Dolton, chief executive officer of Zopa. "We're finding that empowering borrowers to control the effective rate on their loan, while creating a safe, secure and fully compliant way for people to give and receive financial support makes Zopa a unique and powerful concept."

How Borrowers Can Achieve a Negative Effective Rate on a Zopa Loan

The effective rate on a Zopa Loan is reduced every time someone invests in a Zopa CD linked to that loan. Zopa provides borrowers with tools to create rich profiles and to encourage the people in their social networks to invest in Zopa CDs linked to their Zopa Loan. Because Zopa CDs have one of the highest rates of return in the country, and are federally insured up to $100,000, everyone wins. If borrowers get enough people to invest in a Zopa CD, the borrower's effective rate can actually be less than zero - meaning that the borrower will actually pay back less than they borrowed in the first place! That is why we say that Zopa is the only loan company in the world that gives borrowers the ability to reduce the effective rate on their loan.

"We've been very pleasantly surprised at how quickly our borrowers have been able to encourage others to invest in Zopa CDs in order to enjoy a negative effective rate on their Zopa Loan," added Dolton. "In today's challenging economic climate, seeing how Zopa has enabled borrowers to save significant amounts on their loan payments is very satisfying."

Zopa borrowers receive a loan from one of six partnering credit unions with an initial interest rate based on their credit profile. The borrower can then create a Zopa profile and use other online community-based tools to encourage otherers to invest in Zopa CDs. Visitors to the Zopa website will find a listing of all current borrowers including their loan amount, purpose for the loan, original interest rate, and their new Zopa effective rate reflecting the help they have received from linked Zopa CDs. Some of the Zopa members who are now enjoying a negative effective rate include:

• "TinaM" - After thirty years, "TinaM" decided to leave her corporate job and pursue her dream of a higher education. By maintaining her current negative effective rate, she will only need to pay back $2,082 of her original $5,000 loan.
• "Ruqsaq" - In December, "Rusaq" received a loan to fund the growth of his transportation business at an interest rate of 12.99 percent. If he maintains his current negative effective rate, he will pay back significantly less than the original amount he borrowed.
• "Anomie666" - a special education social researcher, "Anomie666" has achieved a negative effective rate that has allowed him to completely eliminate his monthly payment. He now plans to return the favor and help others by investing in Zopa CD's.