Responsible Lender Creditspring Sees Spike in Demand as Over Quarter of a Million Borrowers Seek Credit as Cost of Living Struggles Accelerate

  • Lending
  • 24.01.2023 04:55 pm

Responsible lender, Creditspring, has seen a spike in demand over the last 12 months with 260,000 members seeking credit as the cost of living crisis extends into 2023.

The lender’s membership base has spiked over the last 12 months – increasing from 100,000 at the start of 2022 to over a quarter of a million today. 

Many of Creditspring’s members are classed as near-prime who struggle to access affordable credit – research from PwC estimates that over 20m people are financially under-served with at least 1 in 3 adults experiencing difficulty accessing credit from mainstream lenders, a 50% increase in this group since 2016.

Since launch, Creditspring has lent over £100m to members, £67m of which was provided in support within the last 12 months alone.

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 members are saving £118 each year on borrowing costs as they do not have to seek credit from high-cost lenders.

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 or late fees attached to the loan, 

People are in increasing need of financial support as the cost of living crisis continues to stretch household budgets. Although inflation dipped slightly in December 2022 (to 10.5% from 10.7% in November), the declining value of real wages alongside surging prices on everyday essentials is causing huge concern. For example, the ONS estimate the cost of milk has increased by 50% in the last 12 months, whilst egg prices are up 30%.

Neil Kadagathur, Co-Founder and CEO of Creditspring, comments: “Given rising costs and falling value of wages, UK households have become hugely reliant on credit to get by. But they need an affordable option that protects them from debt and unscrupulous high-cost lenders.

“With the cost of borrowing rising at a time when people are increasingly forced to turn to credit, the lending industry needs to do much more to provide more affordable alternatives to those in need. Clearly, predatory lenders have no place in the industry and need to be stamped out but all lenders need to ensure they’re improving transparency so borrowers can evaluate the true cost of borrowing.

“We’ve seen a major jump in the number of borrowers approaching us for financial support over the last year and expect this growth to continue. As lenders, we have a responsibility to do all we can to help people reduce their chances of falling into unmanageable debt. Our 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.”

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