payday loan<\/a> or overdraft loans but focuses on lines of credit.<\/p>\nIt compares this to a pot of cash into which you can dip as many times as you need, and save money in the long run. To illustrate its uniqueness, it explains the concepts behind these popular types of loans.<\/p>\n
Payday loans are essentially short-term, high interest loans that you typically repay in a month. Drafty\u2019s line of credit claims to be much cheaper. At the same time, it emphasizes the fact that you do not have to apply again to borrow again. More of that in a little bit.<\/p>\n
An overdraft, on the other hand, is a financing option that lets you access more than you have from your bank account. It claims to offer lower rates than overdrafts as well. And it also highlights that it is not connected to your bank account.<\/p>\n
As a line of credit, Drafty requires that you apply only once and get access to a perpetual loan ranging from \u00a3200 to \u00a33,000. Unlike traditional loan options, you do not get it as a lump sum and then pay it off gradually. Rather, after you qualify for a line of credit and open it, you can access it again and again.<\/p>\n
Loan qualification terms<\/h3>\n
There are only two conditions. First, you have to operate within the limits of the line of credit and cannot exceed it. Second, you must pay the required minimum on a monthly basis. Any time you dip into the pot of cash, they send it to your account in approximately 90 seconds.<\/p>\n
And best of all, there are no fees applicable for accessing the service. Rather, it has a representative APR on 89.7% and a maximum APR of 91.2%. There is no limit on the period of time for which you can borrow the loan.<\/p>\n
Considering that there are no prepayment fees, you have the option of repaying your loan early so as to save on interests. Another advantage is that you can pay back any amount that your budget allows, at your own pace, for as long as it is equal to or higher than the required minimum.<\/p>\n
![\"A](\"https:\/\/learnbonds.com\/uk\/wp-content\/uploads\/sites\/2\/2020\/03\/Cu-MKyiXgAEml64.jpg\")
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Credit checks<\/h3>\n
In order to determine the amount for which you qualify, the platform makes use of a sophisticated method for credit scoring. The lender will also analyze your affordability so as to determine whether or not you can make repayments sustainably.<\/p>\n
And as a responsible lender, they also ensure that you can make repayments comfortably. Notably, you do not have to have a perfect credit score to qualify as they take multiple factors into consideration in addition to the score.<\/p>\n
If your application gets approved and you exercise good repayment habits, you can qualify for an increase to your credit limit if necessary. For first time applicants, once you complete the application process and get approved, you should be able to get the loan within an hour.<\/p>\n
Flexibility is the most outstanding aspect of this type of loan as you only need to borrow the amount you need, when you need it. Unless you close it, it is always accessible and you can set repayments that suit you.<\/p>\n
But in there lies its key downside \u2013 this type of loan can keep you in debt perpetually. You might also be tempted to borrow when you don\u2019t really need to, simply because you can.<\/p>\n
Interest rate and repayment<\/h3>\n
Your outstanding loan amount will be subject to a daily interest, which is yet another advantage. It means that you only need to pay interest on funds in your possession, which would not be the case with a monthly interest rate.<\/p>\n
But as always, late payments are discouraged. Even though there are no penalties for them, it will mean having to pay a higher interest for the extra days. Additionally, poor repayment habits will inevitably damage your credit score.<\/p>\n
Also, since the lender will review your performance, you might not qualify for higher limits if you have a habit of making late payments.<\/p>\n
As a responsible lender, the provider runs hard credit checks on all applicants in its affordability analysis. Fortunately though, you will not be subjected to any further hard credit checks after that for as long as the account remains open.<\/p>\n
They will, however, continuously monitor your credit rating without impacting your score. Thus, if your financial situation changes significantly, they will know about it.<\/p>\n
For repayments, the lender makes use of a continuous payment authority (CPA) to collect the agreed upon amount directly from your bank account.<\/p>\n
Drafty Loans Account Creation and Borrowing Process<\/h2>\n
Creating an account and borrowing from Drafty is simple and straight forward.<\/p>\n
1. To get started, you might want to try the fastcheck on the home page (https:\/\/www.drafty.co.uk\/) to check if you will get approved.<\/h4>\n
Under this section, select the loan limit you want to access and then provide additional details. These include your full name, date of birth and email address.<\/p>\n
2. You will also need to enter your residential details including the postcode, house number, time at residence and type of occupancy.<\/h4>\n
![\"Drafty](\"https:\/\/learnbonds.com\/wp-content\/uploads\/2019\/08\/Screenshot_809.jpg\")
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\u00a0<\/p>\n
![\"Drafty](\"https:\/\/learnbonds.com\/wp-content\/uploads\/2019\/08\/Screenshot_810.jpg\")
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Choose your employment status from the listed options and your monthly income amount and expenses.<\/p>\n
4. Once you are done with the details, read the privacy policy, accept the terms then click \u201cCheck my eligibility.\u201d<\/h4>\n
![\"Privacy](\"https:\/\/learnbonds.com\/wp-content\/uploads\/2019\/08\/Screenshot_811.jpg\")
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Following this process will ensure that your credit does not suffer from a hard check and you fail to get approval.<\/p>\n
5. After the fastcheck, you can now proceed to the actual application process.<\/h4>\n
You will not need to resubmit the details you have already entered.<\/p>\n
You might, however, need to verify some of the details. If that is the case, you will get a request to submit the required documents via email, fax or phone.<\/p>\n
Drafty gives a quick decision and if you get approved, you will immediately have access to your account on the platform and on an app.<\/p>\n
They will let you know how much you can borrow. So all you need to do is select the amount you want and you will have it in your account in 90 seconds. Note that for your first withdrawal, you must take a minimum of \u00a350 and afterwards, the minimum amount will go down to \u00a320.<\/p>\n
<\/i>It\u2019s essential to be cautious during the sign up process for these products. This is because you can end up owing two to three times what you borrow on the longer-term loans, and many have difficulty repaying the short-term loans without reborrowing.<\/em><\/div><\/div>\nEligibility Criteria for Drafty Loans Loan<\/h2>\n\n
There are a number of criteria you need to meet so as to qualify for a loan from the platform. These are:<\/p>\n
\n- <\/i> Be at least 18 years of age<\/li>\n
- <\/i> Be a UK resident<\/li>\n
- <\/i> Be in current employment<\/li>\n
- <\/i> Earn a minimum income of \u00a3750 per month<\/li>\n
- <\/i> Have a UK bank account with a valid debit card<\/li>\n
- <\/i> Have a working UK phone number<\/li>\n<\/ul>\n<\/div>\n
![\"Drafty](\"https:\/\/learnbonds.com\/wp-content\/uploads\/2019\/08\/drafty-logo-250-.png\"){kind=logo}
Do you have to get cash fast online in order to get out of a tricky spot? Well, you may have noticed that there are lots of lenders offering more or less the same thing.<\/p>\n