PEER-TO-PEER payday lender Welendus has launched its first product, offering borrowers an interest-free loan if the debt is repaid in one day.
Individuals can borrow up to £500 using the new facility, which is aimed at those faced with unexpected or emergency bills, Welendus said. The borrower does not have to pay any interest if they pay the loan back within 24 hours.
There are no early repayment fees and borrowers can get a decision within five minutes.
Investors will receive returns ranging between five and 15 per cent to fund the loans.
“The problem seemed clear to me: people are penalised 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,” Nadeem Siam, founder of Welendus, said.
“Welendus solves this, alongside giving local investors the opportunity to invest in their communities and gain value added returns that are unique to the P2P lending industry.
“A huge percentage of the UK population don’t have savings and we aim to provide a simple and ethical resource for emergency cash.”
Welendus – which aims to re-define the short-term lending market with cheaper rates and no hidden costs – received authorisation from the Financial Conduct Authority (FCA) in October and has previously raised money on Seedrs to build the platform.
The company has also trademarked the terms ‘AutoMatch’ and ‘AutoDiversify’ for use on its platform.
AutoMatch will be used to describe the process of automatically deploying investors’ funds, while the AutoDiversify feature will be used to spread investors’ money across a variety of loans.