Drafty review September 2019

Designed as an alternative to expensive payday loans and overdrafts, a Drafty credit line lets you access a pot of cash from £200 to £3,000 to use as and when you need it.

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Drafty

A a direct lender authorised and regulated by the Financial Conduct Authority (FCA), Drafty is the UK trading arm of Lending Stream LLC, a popular US-based payday loan provider. Launched in 2015, Drafty markets itself as an innovative and flexible alternative to a short term loan or unarranged overdraft.

What is a “line of credit”?

A line of credit is an ongoing credit facility, with agreed limits. Unlike a loan that’s issued as a lump sum and paid off over a fixed period, a line of credit can be accessed whenever you need it, and you can borrow as much or as little as you like (subject to an agreed maximum).

You then choose how much you want to repay each month (subject to a minimum amount), until the debt is cleared. And provided you’re below your credit limit, you can borrow more at any time. Unless you close your account, the facility is always there and available for you to dip into.

More traditional examples of lines of credit include credit cards and authorised overdrafts.

One of the main advantages of a line of credit is the flexibility – you only borrow what you need, when you need it, and you can pay it back over a timeframe that suits you and that can adapt to your changing circumstances. The flexibility of a line of credit is also one of its main disadvantages, however – presenting the risk that you might borrow when you otherwise wouldn’t have, or let debt drag on and on.

warning icon Warning: late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk.

warning icon Please note: high-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.

Tappily

Tappily line of credit up to £2,500 as and when you need it

  • Tappily uses read-only access to your current account to provide a flexible line of credit.
  • Avoid unauthorised overdraft fees by setting account balance triggers.
  • Once approved, transfer money into your account within 15 minutes.

Representative example: Borrow £1,200 for up to 75 days at a rate of 124% p.a. (variable). Representative APR 49.7%.

Promoted

Key features of a Drafty line of credit

If you’re approved for a Drafty line of credit, you’ll be given a credit limit and immediately be able to access the facility either on Drafty’s website or via the Drafty app.

  • Fast decision. Drafty will provide you with an instant decision on a credit line based on the details you submit in your application. Occasionally, you may be required to send some additional documents but this can be done by email to speed up the process.
  • Credit limit of up to £3,000. Get access to a pot of cash from £200 to £3,000 as and when you need it.
  • Request funds 24/7. Use your online account or the Drafty app to withdraw funds at any time.
  • Fast transfers. Drafty aims to have the cash in your bank account within 90 seconds of you making a request for a transfer of funds.
  • Interest charged daily. Your outstanding balance will be subject to a daily interest charge.
  • No other fees. You won’t be charged for the set-up or ongoing running of the facility, and Drafty does not charge late fees (although you’ll pay more in interest if you miss repayments, and could damage your credit score).
  • Flexible repayment terms. Pay back what you can afford, when you can afford it, subject to a set monthly minimum.
  • Repeat borrowing. Want to borrow cash again, or borrow more? You can use Drafty as much as you want within your agreed limit.
  • Credit limit reviews. After receiving your consent, Drafty will revise your limit every now and then. This means you may be able to access more cash in the future, depending on your account behaviour and affordability checks.

How do Drafty’s loans hold up against the competition?

Table: promoted deals, sorted by total payable

If you’ve been on the Drafty site and have estimated the cost of a loan, you’re probably going to want to shop around to see if you’re getting a good deal. You can use the table below to estimate the cost of the loan that you have in mind, from a range of popular short-term lenders.

warning icon Warning: late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk.

warning icon Please note: high-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.

How much money do you need to borrow?


How long do you need to borrow over?


Name Product Available Amounts Monthly repayment Total payable
£50 to £800
Representative example: Borrow £200 for 6 months at a rate of 292% p.a. (fixed). Representative 1,333% APR and total payable £386.61 in 6 monthly payments of £64.44.
£300 to £800
Representative example: Borrow £400 for 4 months at a rate of 255.5% p.a. (fixed). Representative APR 939.5% and total payable: £597.48 in 4 payments of £149.37.
£100 to £1,000
Representative example: Borrow £400 for 6 months at a rate of 229.95% p.a. (fixed). Representative APR 720% and total payable: £707.01 in 6 monthly payments of £117.83.
£50 to £1,000
Representative example: Borrow £250 for 74 days at a rate of 292% p.a. (fixed). Representative APR 1300.5% and total payable: £398.00, in 1 payment of £74.00 and 1 payment of £324.00.
£300 to £1,000
Representative example: Borrow £500 for 5 months at a rate of 292% p.a. (fixed). Representative APR 1,297% and total payable: £867.05 in 5 instalments of £173.41.
£100 to £1,000
Representative example: Borrow £480 for 9 months at a rate of 133.1% p.a. (fixed). Representative 535% APR and total payable £959.04 in 9 monthly payments of £106.56.
£100 to £2,500
Borrow £100 for 8 months at a rate of 204% p.a. (fixed). Representative APR 567% and total payable £199.33 in 8 monthly payments of £19.93. You can repay this loan early.
£250 to £1,000
Representative example: Borrow £500 for 6 weeks at a rate of 255.5% p.a. Representative APR 839.20% and total payable: £647 in 1 payment.

Compare up to 4 providers

Important information: You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.

We compare payday/short-term loans from

Lending Stream Instalment Loan
Moneyboat Short Term Loan
Peachy Loan
QuickQuid Short Term Loan
QuidMarket Short Term Loan
Satsuma Short Term Loan
Sunny Loan
The Money Platform Short Term Loan

How do I get set up?

  1. Complete the simple online application form by answering some basic questions about yourself and your employment. In some circumstances, you may be asked to verify some details or submit further documents by phone, email, or fax. Drafty will not tell your employer about your application.
  2. Drafty will give you a quick decision. If it’s a “yes”, you will have immediate access to your Drafty account through the website and app.
  3. You will be told how much is available for you to borrow. Choose how much you want and Drafty will send the money to your bank in under 60 seconds. Your first withdrawal must be a minimum of £50, and £20 after that.

Eligibility requirements

You should only apply for a Drafty credit line if you’re certain you can meet the repayment terms. You must also meet the following criteria:

  • UK resident
  • 18 or over
  • In current employment, earning minimum of £750 a month
  • Hold a UK bank account with a valid debit card
  • Have a UK phone number

What about credit checks?

As a responsible lender, Drafty will run a “hard” search of your credit file as part of its affordability analysis. However, it also states that it’s interested in more than just your credit history, and will review your unique situation in considering your application.

From then on, you won’t be subject to further “hard” credit checks, but as long as your account remains open, Drafty is able to monitor your credit situation without harming your credit file in any way. So if your financial circumstances change significantly, Drafty will probably know about it.

How do I pay back my credit line?

Like most short-term credit providers, Drafty uses a continuous payment authority (CPA) to collect a minimum monthly repayments from your bank account. You can also make additional payments, or pay off the credit line in full, at any time, without being charged a fee.

What is a continuous payment authority (CPA)?

With a CPA you give a company permission to withdraw money from your account on a regular basis.

CPAs differ from a direct debit because they give the company being paid the ability to withdraw money from your account whenever it wishes, and to take payments of different amounts without consulting you. Most payday/short-term lenders will use a CPA to collect your repayments. You can cancel this at any point by either consulting with your loan provider or your bank.

The bottom line

While a fixed-term loan can be easier to budget for, Drafty’s innovative credit line product offers the flexibility to borrow as much or as little as you need, as and when you need it. Provided you have the good self-discipline to only use the facility occasionally, for unexpected and unavoidable costs, and don’t let the debt drag on, it may well prove to be a cheaper option.

It’s not the only alternative to a payday loan, however. You may wish to consider a credit-builder credit card, an authorised overdraft, or any of the options outlined by the government’s Money Advice Service.

Frequently asked questions

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We exist to help you find better. The offers we've compared on this page are from a range of products whose details we can track; we don't cover every product on the market...yet. Unless we've indicated otherwise, products are shown in no particular order or ranking. The terms "best", "top", "cheap" (and variations of these) aren't product ratings, although we always explain what's great about a product when we highlight it; this is subject to our terms of use. When you make major financial decisions, it's wise to consider getting independent financial advice. Always consider your own financial circumstances when you compare products so you get what's right for you.

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