When money is tight and you have a poor credit score, the whole world might seem like it’s against you, as most traditional lenders may not offer you the loans you need. This makes credit both inaccessible and exclusive, leaving people with less-than-ideal credit scores in the lurch. On top of this, with many predatory lenders ready to take advantage of vulnerable borrowers, it’s difficult to find lending options.
Thankfully, with advancements in fintech like the open banking system and the rise of ethical lenders, you can now access safer borrowing options. Open banking, in particular, allows lenders to receive real-time information about your current financial situation.
This ensures loan assessments are fair and not based on your past credit history or financial mistakes. It allows lenders to offer you full transparency on loan terms and conditions and reasonable interest rates, making credit options more affordable.
Ethical lenders are committed to your financial welfare and reducing borrowing risks, upholding the values of responsible lending. So if you’re in the market for a safer, smarter borrowing experience, consider choosing an ethical lender.
Features of Ethical Loan Providers
Ethical loan providers are FCA-regulated lenders who’re committed to responsible lending practices, offering credible loan alternatives to high-cost loans. You don’t have to worry about hidden costs and fees with them, as they offer full transparency on your loan options. So you know exactly what you are signing up for when you borrow from an ethical lender.
They’re also likely to go beyond your credit score to offer you a loan that fits your budget and financial requirements. Many ethical lenders also offer flexible repayments, removing the stress of loan repayments. This way, you can take a loan without compromising your future security and avoiding the cycle of debt.
With that in mind, we bring you a list of the top 7 ethical loan providers in the UK for a stress-free loan borrowing experience.
7 Ethical Loan Providers in the UK That Offer Safer Borrowing Options
1. Salad
If you’re an employed individual with a poor credit score, you may already be familiar with the challenges of borrowing. This can be particularly stressful in the current economic climate, which is still dealing with rising prices, making everyday finances a pain point for many.
However, with Salad, you can leave these worries behind, as they offer you fair credit options. Their loans are designed to support people who would otherwise be overlooked by traditional lenders due to bad credit.
Salad believes in promoting the cause of financial inclusion and offers affordable, accessible credit for even those with poor credit scores. They also offer fast loans with upfront rates so that those who are financially vulnerable can borrow confidently during times of an emergency.
Salad’s Key Offerings
Salad uses open banking information to make quick and fair affordability assessments. They keep things simple, fast and easy. You can borrow any amount between £300 to £2000 over a period of 6-24 months.
There are no hidden fees, no marketing gimmicks or misleading information; you get your loan cost upfront, and applications are approved within 1 working day or less. Not just that, there are no additional hard credit checks involved, which means once approved, you get access to your funds within 2 hours flat.
Who They Help
Salad’s ethical loans have helped hundreds of employed individuals across the UK, including teachers, nurses, and other healthcare workers. They’re committed to providing people with various credit profiles, including those with bad credit, with fair and affordable loan options.
Loans that Go Beyond Credit Scores
As an independent lender that’s committed to financial inclusion, Salad is the first UK lender to receive a license to use open banking data. This has allowed them to offer inclusive credit options that go beyond credit scores.
Why Choose Salad
- FCA Regulated
- No hidden charges -fixed rates, transparent pricing
- Open banking data used for affordability assessments
- Quick and easy application process
- Inclusive credit options to suit your financial needs
- Focused on low-income earners and promotes financial inclusion
Here’s an amazing review of Salad from Rosa:
“This was my first loan, and I was surprised at how easy the whole process was. Everything was clear, and the customer service was excellent.”
2. Lending Stream
Lending Stream is an ethical lender authorised by the FCA since 2008. They pride themselves on offering quick and fast loans that are backed by high-satisfaction reviews on TrustPilot. Affordability assessments go beyond credit scores, have full transparency when it comes to loan terms, and emphasise responsible lending practices.
They do carry out initial soft credit checks on application and a hard credit check after an application has been made. You could transfer funds within mere minutes after approval, making this a quick option for those looking to borrow credit for an emergency expense.
Loan amounts range between £50–£800 for new borrowers, up to £1,500 for returning borrowers. Even though the representative APR is extremely high (around 1,271%–1,333%), they’re a highly trusted and reliable lender due to their commitment to transparency.
3. CashASAP
CashASAP is a direct, FCA-regulated, ethical lender that is a member of the Consumer Credit Trade Association. They offer borrowers inclusive credit options, offering them credit calculators and flexible loan terms. Their commitment to full transparency is one of the reasons why they’re well-known as an ethical lender.
They disclose rollover fees and also offer interest rebates on early loan settlement. They offer first-time borrowers £200–£400 credit and up to £750 for returning customers. They provide borrowers with same-day loans for emergencies as well as one-off payday loans that can be repaid in instalments over 3-6 months.
You could transfer funds in 15 minutes for same-day loans backed by a quick and clear application process. They use affordability checks and UK-based eligibility criteria for all their loan types.
4. CashFloat
Cashfloat is a direct lender that offers a wide range of loan products for people with all types of credit profiles. From payday loans to short-term loans and bad credit loans, CashFloat promises loan amounts of £250 – £2,500 with repayment periods ranging from 3-9 months.
Their APR rates range between a minimum of 295.58% APR and a maximum APR of 1294% with a representative APR of 611.74%. They also offer business loans of £1,000 – £100,000 for a period of 1-18 months for directors and business owners.
5. Drafty
Drafty offers both a flexible line of credit as well as a fixed line of credit. These allow them to offer borrowers with bad credit a wide range of credit options suited to their needs.
Their flex line of credit offers borrowers amounts ranging from £50 and £3,000 with a variable representative APR of 96.2%. Their fixed personal loans, on the other hand, offer borrowers amounts ranging from £1,000 and £3,000 with a 79.9% APR, which can be repaid over 12-24 months.
Their credit products have been rated as excellent by thousands of borrowers, backed by 10,000 reviews on TrustPilot. They’re available 24/7 and promise a quick and easy application with fund availability in less than 90 seconds once approved.
6. CreditSpring
CreditSpring is an ethical lender that provides flexible direct loans and markets itself as a viable alternative to high-cost loans for borrowers with poor credit scores. Their commitment to the welfare and financial inclusion of their customers has earned them great reviews and features in the media, including the BBC, FinTech and the Telegraph.
They have clear pricing and provide full transparency on their loan products so that you can borrow with trust and confidence. They offer two no-interest loans per year, offer you financial insight and help you with tools and resources that can boost your financial stability.
Borrowers who choose to become members of CreditSpring are required to pay a small monthly membership fee of £7-£26 flat instead of traditional interest paid on a loan. They have a human-centred approach to lending that boosts financial resilience and helps borrowers rebuild their finances with greater confidence.
7. 118 118 Money
118 118 Money is an FCA authorised lender since 2017. It markets itself as a no-catch, no gimmicks, fuss-free ethical lender that believes in keeping things simple and transparent. They offer loan amounts ranging from £1,000 – £8,000, with a representative APR rate of 49.9%. Repayment periods range anywhere between one year to 5 years.
You can check your eligibility for their loans without any impact on your credit score. If you meet their criteria, you could receive approval within an hour and access funds as early as the next day.
They’re also a member of the Finance & Leasing Association (FLA) and uphold responsible lending practices. They offer unsecured loans, personal no-guarantor loans and fixed-rate loans.
Borrow Responsibly by Choosing an Ethical Loan Provider
Borrowing responsibly can make for a stress-free loan experience. For this reason, it’s important to choose an ethical loan provider, and not just the right product. This can help you access credit that meets your financial requirements without burdening you or compromising your future financial obligations.
By choosing an ethical loan provider, you are better equipped to deal with your financial crisis and needs while building a future with greater financial resilience.
Fintech innovations like open banking are helping ethical lenders offer borrowers a path towards greater inclusion and quicker access to financial products and services.
