Fintech lender, Creditspring, is currently saving its members £17m in UK borrowing costs by offering a no-interest alternative to high-cost credit options, providing a lifeline to borrowers in the cost of living crisis.

On average, Creditspring’s 150,000 members save £118 each year on borrowing costs as they do not have to seek credit from high-cost lenders. Many of Creditspring’s members are classed as near-prime who struggle to access affordable credit.

Creditspring’s subscription model is a fixed-cost, low-risk credit solution that offers customers access to two advances per year, with clear repayments, capped costs, and no hidden charges. By paying a fixed fee to access credit, it is far easier for people to evaluate the true cost of borrowing and since there is no interest rate attached to the loan, there is no risk of a debt spiral so it can be used as a solution to unexpected expenses.

As a result of the cost of living crisis, the number of Creditspring members has increased by 50% since the start of the year and the company expects to add another 200,000 members by the end of the year. Of these new members, more than a third (14,000) applied to join the Stability Hub - a free tool that provides personalised support and actionable tips to encourage more informed financial decision-making.

Recent research from the Joseph Rowntree Foundation shows that two-fifths (40%) of people are behind on one or more bills, with the average amount of arrears across all bills held by low-income households sitting at £1,600. The research also shows that nearly a fifth (19%) of low-income households owe money to high-cost lenders.

Over the course of 2022, Creditspring plans to lend £100 million to support its members through its fixed-cost subscription loan services, compared to a total of £25 million last year.

With energy bills and the cost of goods increasing, at the same time as the real value of wages declines and with inflation likely to hit 11% this year, people are in increasing need of financial support.

Creditspring recently announced a successful fundraise of £48 million to supercharge its mission of improving financial stability across the UK – taking the total amount raised since launch to £70 million.

The funds will be used to support more members to avoid high-cost, unscrupulous lenders and manage their finances through the cost of living crisis, which continues to tighten its grip across the UK. In addition, the funds will allow Creditspring to substantially grow the team, as the employee base is set to double over 2022 to help it deliver on its goals.

Since its launch, Creditspring has provided over 95,000 borrowers seeking financial support, helping members achieve financial stability, with a 99.9% satisfaction rate amongst members.

Neil Kadagathur, Co-Founder and CEO of Creditspring, comments: “The cost of living crisis is highlighting just how perilous people’s budgets are and the UK’s reliance on credit. However, too many are still left with no choice but to seek high-cost credit to survive. The lending industry needs to do much more to provide more affordable alternatives to those struggling.

“Unfortunately, there are still too many predatory lenders in the industry; turning the current financial crisis to their advantage and providing credit with extortionate repayment terms.

“We’ve seen a major jump in the number of borrowers approaching us for financial support over the past six months and with the cost of living increasing, demand will continue to rise. We must do all we can to help people reduce their chances of falling into unmanageable debt. Creditspring’s no-interest, subscription model provides affordable credit without risking borrowers falling into a debt spiral as well as enabling them to build their credit files to unlock access to mainstream credit in future.”