WELENDUS has hit out at “extortionate interest rates” in the short-term loans market.
The peer-to-peer lender, which is aiming to shake up the short-term loans market with lower interest rates and no fees for borrowers, shows that finance from rivals such as a Wonga can cost 166 per cent more than a Welendus option.
Analysis by Welendus found that a £300 loan over 30 days would cost £27 on its platform, but £72 on Wonga.
It even works out cheaper than not-for-profit community finance groups such as StreetUK and Scotcash, Welendus said.
For example, a StreetUK loan would cost £135.86 and can only be borrowed over a minimum of 12 months.
Unlike other providers, Welendus also charges zero interest if loans are repaid on the same day.
“People are currently unhappy with the lack of affordable options when it comes to emergency cash, whether this be high overdraft fees or payday loans with extortionate interest rates,” said Nadeem Siam, chief executive of Welendus.
“Welendus was founded specifically to tackle this issue, and provide an ethical, affordable option in the marketplace.
“The unique technology we use not only allows investors to lend money to those in need in local communities, it also drastically reduces our overheads, meaning that loans are cheaper for borrowers ultimately resulting in lower interest rates, and fairer, more flexible loans.”