Callcredit seals deal with new market lender

Leeds-based Callcredit will supply PiggyBank with its credit assessment and identity and verification products to prevent fraud and establish whether an applicant can pay back the loan.

Callcredit said its tools, which include CallValidate and CallReport, will ensure that responsible lending practices are upheld.

PiggyBank is one of a number of new peer to peer lenders that promise to undercut market leaders such as Wonga.

Its online service offers borrowers short-term loans at an APR of 1355 per cent for a one-month loan. This compares with Wonga’s 4214 per cent.

Someone borrowing £500 for 31 days would pay £129.67 in interest and fees of £6.95 making a total of £636.62 to repay.

Customers usually pay less than this as they borrow for a week or two before pay day. A typical customer might borrow £265 for seven days, which would cost £22.59 in interest and £6.95 in fees giving a total of £294.54 to repay.

The fees include £1.75 to prove who you are, £1.20 to make sure you can afford your loan and £4.00 to get the cash,

Callcredit will be helping out with the first two.

PiggyBank said its model makes the most of lenders’ savings and gives borrowers a responsible short-term loan.

The company claims that peer-to-peer lending is a fairer and more human way of managing money.

PiggyBank’s chief executive Dan Ware said: “It’s like borrowing and lending with your friends and family – except there are thousands of people you can lend and borrow with. Both lenders and borrowers get fairer rates, because peer-to-peer lending is more efficient than the traditional banking model and large corporates in the short-term sector.

“There’s no smoke and mirrors with PiggyBank. People who have spare money lend it directly to people who want to borrow.”

PiggyBank uses lenders one-off deposits of £100 to £25,000 to lend out to borrowers in the form of short-term loans.

Customers are able to borrow between £50 and £1,000 for up to 42 days, and pay it back on the borrower’s next payday or a chosen payback date.

If accepted for a loan, PiggyBank aim to send the money to the borrowers’ bank in an hour.

The system for borrowers and lenders is 100 per cent online and uses secure software.

CallValidate will enable PiggyBank to undertake real time, effective and reliable identity verification checks against bank account and credit card providers’ records on each applicant.

Callcredit’s CallReport will provide PiggyBank with quick and cost-effective confirmation of an applicant’s name, address and presence or absence of adverse data, as well as assessing the applicant’s likelihood of credit risk.

James Blake, Callcredit’s head of sales, said: “By drawing on our expertise and the depth of our comprehensive datasets, Callcredit has been able to meet PiggyBank’s requirements and will enable a more accurate risk decision and help to reduce bad debts costs.”

Mr Ware said: “Callcredit fully understood our requirements and responded quickly to our needs. As a new company we needed expertise and support from a respected credit data provider and they were able to provide personal tailored advice.”