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Apr 06

Avoid the pirates – here’s a safe way to get credit fast

Reading Time: 3 mins

According to research, over ¼ of us Brits don’t have savings if we are hit by an emergency such as a broken washing machine.

Michael Sheen and others are leading a big campaign to end high cost credit in the UK, and there has been a lot of adverse press for some time now around the rent to own sector, doorstep lending, high cost credit sector, and even credit card and overdrafts.


Are there any UK wide affordable alternatives?  

MoneyMagpie_consumer credit awardsWe’ve found a rapidly growing not for profit personal credit company called Fair for You, that is affordable and really loved by its customers.

It is growing because it’s being shared by its customers through social media and is currently the highest rated personal lending organisation on Trustpilot.

Fair for You is a Community Interest Company, owned by a Charity and backed by nine social investors including Joseph Rowntree Foundation and Big Issue Invest.


A new way to buy kitchen appliances and furniture on credit

Fair for You has developed an online high street which customers can browse the categories on, including kitchen appliances, beds, sofas, cots, TVs, electrical items and furniture.  For customers with over six months good payment record, there are several more shops in the Good Payers Club including mobile phones, carpets, laptops, games consoles and bikes.

Customers browse at leisure, and when they find the product they need to buy, it’s added to a basket. Instead of paying by card, you are directed to apply for a loan to spread the cost in line with your income and budget.


How does Fair for You compare to Pay day loans and High Cost Short Term Credit?

MoneyMagpie_Fair For YouThere was recently a cap introduced to limit the cost of pay day loans, now usually called short term credit. Yet most pay day loans cost an eye watering 1557.7% APR! In real money that would mean £300 over 13 weeks costs £129 in interest.

Surprising, then, that Fair for You charges 3% per month, which means that if you can repay over three months, £300 for a washing machine would result in interest of £18.18.

There are no arrangement fees, no additional obligatory warranties or extra costs for delivery or removal of the old item. Installation if you need it can be added to the loan for £18.


Flexible credit solution – overpay when you can afford it to reduce the interest

One of the best features is being able to choose the repayment that works. If money feels tight, customers can spread payments over longer to keep the weekly payment down. £300 over 12 months would be £30.14 a month, with interest in total of £61.66.

Over 25% of Fair for You customers opt for a longer loan, and then regularly overpay their payments when they can afford it, to reduce the interest. The faster you pay it off, the less you pay overall.


Customers unable to access affordable credit are finding this works for them

Comments from customers are most impressive around service, and many of these customers have not been able to access affordable credit before.

Delivery on kitchen items is usually within three days, and it’s available to people with a wide range of circumstances.

Tracey, who works part time and is a single mum, was left with some credit issues after her partner ran up some debts. She said  ‘I was really struggling to save for a cooker after mine broke – we were without a cooker for 2 months and with children it was a nightmare. My credit hasn’t been great and Fair for You were able to help when I couldn’t get store credit.’

Kelly, who is having cancer treatment, also found she had few options when her washer broke, and with small children in the household was having to look at rent to own stores. Charlotte, who lives with her partner, adds ‘despite us both working we have had to use rent to own, and it’s a relief to be able to buy at a fair price without lots of added cost or being tied into a long term credit agreement.’

Customers have already voted for Fair for You to win Consumer Champion award at the Consumer Credit Awards, and as a new challenger to high cost credit, its one to watch.

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1 year ago

Useful advice on getting credit.

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