The peer-to-peer lender’s headline lending rates will decrease by 0.2% from 8th September 2016 with Zopa’s access product reducing to 3.3%, the classic option to 4.1%, while its plus offering will drop to 6.5%.
The announcement follows the recent Bank of England interest rate cut, which has seen the base rate fall to a record low 0.25%.
“We have seen [a] 0.1 to 0.3% reduction in headline rates from other loan providers across key loan categories since the interest rate cut,” said Andrew Lawson, chief product officer at Zopa.
“It’s important that we stay competitive, while maintaining our high standard of borrower.”
Andrew added that he had already seen banks cut their rates dramatically, in many cases by more than 0.25%.
“This lack of competitiveness for investors from the banks has led to a surge in new lenders at Zopa; meaning slower lending speeds and queues of, on average, 10 days [for the] classic.
“This is something we closely monitor and manage.
“As we are a marketplace, it’s essential that we maintain the balance between borrowing and lending.”
Last month, Zopa revealed that it had made a £8.9m loss despite seeing revenue increase to £20.6m.
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