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New loan launches that's interest-free if you pay it back later that day

New online platform Welendus has come up with a solution for individuals hit with surprise or emergency bills.
By Editorial on Mar 22nd, 2018   @freelotteriesuk

Welendus, a new FCA-approved peer-to-peer short-term credit provider, has announced the launch of a one-day, interest-free loan.

For individuals or households that need a loan of up to £500 and can pay it back later that day, the company is offering this facility free of charge. This features alongside 'highly flexible, fair and reasonable repayment schemes', and is aimed at those faced with unexpected or emergency bills.

The company is also offering a discounted daily rate for a two-day loan, with the average £230 loan incurring just £1.84 in interest which is less than the average cup of coffee.

One quarter of UK households are unable to source the funds to pay an emergency bill costing £100 or more, according to the Aviva Family Finances Report. This issue has previously been addressed by payday loans with 'unaffordable rates and for-profit penalising structures for late repayments', and the 'very expensive unarranged over draft facilities offered by banks', Welendus says.

The company says that it offers ethical loans with no late repayment penalties.

A 'fairer source of short-term credit'

The community-sourced peer-to-peer lender believes it has created a fairer source of short-term credit, and the platform is serving over 350 people in need of some extra cash. One in two have borrowed due to unforeseen expenses, with an average loan value of £230, according to the company's own data.

Welendus also says that it is committed to helping rather than exploiting those in difficult financial situations. When a borrower is unable to repay a loan, rather than accruing penalties, large fees and marks against an individual's credit score, the loan transitions into a long-term loan with affordable interest rates, the business says.

The Welendus founder, former space engineer Nadeem Siam says, 'The problem seemed clear to me: people are penalised by the extremely high unarranged overdraft fees and for taking out short-term loans often when they are not responsible for the cause of their financial difficulties, for example if their boiler breaks. Welendus solves this problem, alongside giving local investors the opportunity to invest in their communities and gain value added returns.

'A huge percentage of the UK population don’t have savings and we aim to provide a simple and ethical resource for emergency cash.'