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.
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.
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?
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
How do I get set up?
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.
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.
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.
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:
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.
Unlike a loan, a credit line is a flexible way to borrow money. It allows you to borrow amounts of your choosing as many times as you like, up to your approved amount. The initial minimum withdrawal is £50 and further withdrawals can be as little as £20. You pay interest only on the amount you borrow.
As long as your account is in good standing, you won’t need to reapply when you need additional funds. Simply log into your account and request a transfer of funds into your bank account. It’s there when you need it but you don’t have to use it. There is monthly repayment, which you must be sure you can comfortably make. You also have the option of making larger payments or repaying early, which will save you money overall.
A loan is a fixed amount that you borrow with a fixed payment schedule over a certain amount of time. While it doesn’t offer the same flexibility as a credit line, it can be easier to budget for and to understand how much you are paying back in total. When you take out a loan, you receive the cash in a lump sum. If you require additional cash in the future you must go through the application process again and will be subject to a new credit check.
Drafty prides itself on offering credit lines with no fees at all. This means there are no late fees, application fees, transaction fees or penalties for repaying your credit line off early.
The first time you apply for a Drafty credit line, you can request a credit limit of any amount between £200 and £3,000. Drafty will perform a fast, personalised review of your financial situation (not just your credit score) and provide you with an instant decision. This includes letting you know the full amount you are eligible to receive. Periodically, Drafty will review your credit limit. If your account is found to be in good standing and you meet the affordability requirements, your credit line may be increased to £5,000 with 30 days’ notice.
You can also ask Drafty to reduce your limit, if you’d rather not have the temptation to borrow.
If you have available cash in your credit line, simply log in to your Drafty online account or open the app on your smartphone to request funds. You have 24/7 access to your account so you can check your balance and draw additional funds from your credit line at any time. Drafty aims to send the cash to your bank in under 90 seconds. Remember to only draw amounts that you can comfortably afford to repay.
Chris Lilly is a publisher at finder.com. He's a specialist in credit-based products including business and personal loans, mortgages and credit cards, and is passionate about helping UK consumers make informed decisions about their borrowing. In his spare time Chris likes forcing his kids to exercise more.
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