The UK is well past the height of the cost-of-living crisis, where inflation rates were 10%. However, this is not to say that lower inflation rates mean low prices. Rising prices continue to be a challenge for most households across the country but are especially hurting low-income families.
Borrowers, especially with poor credit scores, are finding themselves turning to high-cost credit options and risking financial exclusion.
This can prove burdensome and add to potential debt risk, hampering future financial security. Thankfully, with recent interest cuts and fintech innovations, there’s a new range of ethical lenders providing low-cost credit options to vulnerable borrowers. They’re looking to bridge the market gap between high-cost loans and accessible credit with fair loan options that limit borrower risks.
Open banking and digital lending platforms have transformed the lending landscape significantly, promoting the cause of financial inclusion. Ethical lenders are using these innovations to provide low-cost loans based on affordability to include those typically excluded by mainstream lenders.
What Ethical Loan Providers Offer
- Low-cost fair loans
- Transparent pricing
- Support for vulnerable borrowers
- Affordability-based assessments
- Improved borrower well-being
- Financial literacy
- Purpose-driven lending
- Flexible repayments
- No hidden charges
Now that you know the several benefits of choosing an ethical lender, we present you with a list of the top 9 low-cost ethical loan providers in the country.
1. Salad
Are you worried about finding a suitable credit option because you have a bad credit score or a thin credit file? In this economic climate, both scenarios are understandable, and the good news is that ethical loan providers like Salad can help.
Since its founding in 2018, it’s provided affordable credit to low-income earners and vulnerable borrowers. They’re committed to purposeful lending, supporting community welfare and prioritising accessible credit. As an FCA-authorised lender, they’re one of the first independent lenders to receive a licence to use open-banking data.
They’ve always believed in offering loans that go beyond credit scores, often emphasising loan affordability over standard lending algorithms. With the use of open banking data, they’ve taken this a step further by using real-time financial data to offer borrowers curated credit options.
You can borrow anywhere between £300 and £2,000, depending on your need. They offer clear, fixed repayment terms of 6 to 24 months. Salad carries out soft credit checks, which have no impact on your credit score. They’re known for reliable, accessible and quick lending options and have received over 13000 reviews on Trustpilot with a 4.9 rating.
Why Choose Salad
- FCA Regulated
- No hidden charges
- Fixed interest rates
- Transparent loan terms
- Open banking data used for affordability assessments
- Quick and easy application process
- Inclusive credit options to suit your financial needs
- Promotes financial inclusion
Here’s an amazing review of Salad from Grazina:
“I had an absolutely fantastic experience with Salad Money. Everything was smooth, simple, and completely hassle-free online. The process was straightforward, and the money was transferred quickly without any issues. Salad Money provides a truly reliable and top-notch service. If you want a fast, easy, and professional online experience, Salad Money is the way to go!“
2. Lendable
If you’re looking for a responsible lender and low-cost alternatives to high-cost payday loan options, then Lendable is the right lender for you. Founded in 2014, they’ve been at the forefront of using technology to streamline lending processes and offer borrowers a fully digitalised, paperless process.
They’re committed to transparency and are upfront about their loan costs. Lendable offers borrowers amounts ranging between £1,000 and £25,000, repayable over 1–5 years with APRs starting from 9.9 % to 49.9 %, depending on your credit profile. They’ve received over 87k reviews on Trustpilot for their quick and high-quality services.
3. 118 118 Money
118 118 Money is an ethical lender that is focused on helping borrowers achieve ‘financial fitness’. They offer a range of inclusive credit options that include non-guarantor loans, unsecured loans and fixed-rate loans. They aim to support vulnerable borrowers typically excluded by mainstream lenders.
They offer loan amounts between £1,000 and £8,000 with repayment periods between 1 and 5 years, with a 49.9% APR. 118 118 Money has helped thousands of borrowers with poor credit since its founding in 2013. Their inclusive credit options and quality services are backed by over 50k Trustpilot reviews and have a 4.8 rating.
4. Lending Stream
Lending Stream is a well-known responsible lender and offers borrowers loan amounts ranging from £50 to £800 for new customers and up to £1,500 for returning customers. They encourage responsible borrowing and, on their part, carry out robust affordability checks on all their loan offerings.
Loan repayment periods are typically between 6 months and a year, which allows you time to plan for repayments. Their representative APRs are on the higher side but are better than many payday loan rates on the market.
5. Creditspring
Creditspring is an innovative financial lender that offers a membership-based model of lending. Borrowers are required to pay a monthly membership fee, which allows them to borrow up to two loans per year. They have transparent pricing, so you don’t have to worry about any hidden fees.
They’re committed to your financial welfare and offer financial tools and resources to help you become financially stable. They also partner with other companies to offer their members exclusive discounts and special offers. Creditspring has been featured on leading media outlets for its inclusive yet innovative lending model.
6. Plend
Plend is an award-winning lending startup that was founded in 2020. Their credit products and services are tailored to help vulnerable borrowers achieve financial security. Their website states that a majority of their loans are used to consolidate debt.
They go beyond standard credit scores and use their own algorithm called the Plend score®. This allows them to offer tailored credit based on a borrower’s current financial circumstances, much like open banking data.
7. Reevo Money
As a fintech disruptor, Reevo Money is all about offering borrowers a genuine financial alternative to mainstream lending services. Since its inception in 2022, they’ve been offering borrowers fast, affordable and inclusive credit. Their APR rates are competitive and vary depending on your personal requirements and financial situation.
When you choose to apply with Reevo, you could receive a personalised quote in under 3 minutes. If you’re approved, you could receive funds in your account the same day, making them suitable in the event of a financial crisis.
8. Drafty
Drafty is an FCA-authorised lender that offers borrowers low-cost alternatives to high-cost payday loans. They offer a fixed and flexible line of credit, so you can choose the option that suits your financial situation best. Drafty believes in responsible lending and carries out affordability checks to limit borrower risks.
Borrowers can apply for up to £3,000 on both loan types with repayment periods ranging from 12 to 24 months. Their application process is relatively straightforward. If you’re approved, you could receive your funds within 90 seconds, making it a quick and easy way to borrow. They have a solid 4.8 rating on Trustpilot backed by over 87% positive reviews.
9. Quidmarket
Founded in 2011, Quidmarket offers borrowers a range of low-cost short-term loan options. They manually check all applications and provide borrowers with a humane approach. This has allowed them to forge trustworthy relationships with their customers, improving their borrowing experience.
They offer unmatched transparency and flexibility for all their products, and often come with same-day funding, making them a great option for financial emergencies. Quidmarket provides loan amounts ranging from £300 to £1,500 with flexible repayment periods between 3 and 6 months. With over 9k reviews on Trustpilot, they’ve received largely positive feedback for their inclusive credit options.
Choose an Ethical Loan Provider Today
If you want to have a safe and smooth borrowing experience while still accessing inclusive and fair credit options, look no further than ethical loan providers. They can offer you tailored, low-cost credit based on affordability and not your credit history. Combined with fintech innovation systems like open banking, these ethical lenders are making a difference in how people borrow and promote financial inclusion.
