A London-based startup is on a mission to help the UK become dependent on high-cost loans. There are a number of loan options available for people who need a quick injection of funds, including logbook, payday, and guarantor products that can generate interest rates ranging from $ 50 % to 1000% APR.
Fund Ourselves, was started to help the 3 million Britons who depend on these high cost loans and can often find themselves in a worse financial situation than when they started.
The company was founded by Nadeem Siam, a former NASA engineer who wanted to better understand the problems consumers face with expensive loan products, what he calls “the lost wonga generation.”
Here he is referring to Wonga.com, the once very dominant short-term lender that was on the verge of floating for £ 1billion, before suffering the impact of regulation and a compensation bill. ‘worth over £ 4 billion, which has led the company to go into liquidation.
“With Fund Ourselves,” says Siam, “we offer short-term loans ranging from £ 100 to £ 1,500 for 4 to 6 months, but without a penalizing structure. Of course, we need to do credit and affordability checks with each client to make sure they can repay their loan, but if they are having trouble repaying, we will give them up to 12 months to clear their account. , at no additional cost or impact. to their credit rating.
“The problem (with high cost loans) is that if you are having trouble paying back the fees are very high and you can find yourself stuck in a cycle of debt that is very difficult to break out of.”
“With our product, you have the ability to repay over time in monthly installments, which makes it more affordable to start with – and without penalizing, we provide an efficient way to pay off your debt and maintain a healthy financial position. Our goal is for clients to leave Fund Ourselves in a better position, not the other way around.
Fund Ourselves is based in London Bridge, with a customer service team based in Woking, Surrey. The company officially operates as a peer to peer lender, which matches an individual investor with a pool of their borrowers, to earn an interest rate of 5% to 15% per annum.
Investors can deposit as little as £ 100 and this is diverse among a number of borrowers looking for short term loans. The amount you can receive in interest will vary depending on good credit customers (around 5%) or bad credit customers (up to 15%). FCSC does not cover your investment for losses, but Fund Ourselves includes its own reserve fund that sets aside capital for defaults and the customer service team works hard to recover losses.
Fund Ourselves is another very promising startup looking to provide alternatives to expensive products. Another growing area is salary funding, which provides on-demand salaries to employees, directly from their employees as a free in-kind benefit. It is currently popular with hospitality, food and healthcare workers, but could offer a very inexpensive and effective way to help people get their money back before payday and avoid paying ‘get caught up in high cost loans.