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.
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What is Smart Pig?
Smart-Pig specialises in short-term loans for university students who need financial help before their next student loan is paid.
The company was founded by Tom Parks and Shreiff Benaziza while they were studying at the University of Warwick and University of Hertfordshire respectively. The idea came after one of the founders got into trouble keeping up with payments on a traditional “payday” loan. The experience was so bad that the two friends decided to create their own lender to provide a more affordable deal for students.
If you are receiving a student loan, grant or bursary from Student Finance England or Wales, Student Awards Agency Scotland or the NHS, you could borrow £50-£350 from Smart-Pig over 7 to 180 days.
Smart-Pig aims to offer a fair deal for students, with no late fees and a 10-day grace period on your repayment dates. It also caps interest at 50%, so you will never pay back more than half of what you borrowed in interest – this is half the 100% cap allowed by the Financial Conduct Authority.
Smart-Pig is authorised and regulated by the Financial Conduct Authority.
Key features of a Smart-Pig loan:
How does a Smart-Pig loan work?
- First enter the day you expect to get your next student loan. This must be accurate and match the date you have been given by the loans company.
- Use the tool on the Smart-Pig homepage to choose how much money you need and for how long. Then click “Apply now” and follow the simple steps to create an account and complete your application. You don’t need to set the repayment date to the same day as your student loan payment – it can be earlier.
- Smart-Pig checks that your details are correct and that your student loan is genuine. It will also conduct checks for the loan’s affordability based on your current credit report. You should receive a decision on your loan within 90 minutes.
How do I pay back my loan?
Like most short-term loan providers, Smart-Pig uses a Continuous Payment Authority (CPA) to collect the repayments from your bank account on your chosen dates.
What is a Continuous Payment Authority (CPA)?
A CPA is a recurring payment in which you give a company permission to withdraw money from your account on a regular basis.
A CPA differs from a direct debit because it gives 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 loan companies will use a CPA to collect your repayments, although you can cancel this at any point by either consulting with your provider or your bank.
Is high-cost, short-term borrowing a good idea?
Short-term or “payday” loans can offer a temporary fix when you get into unexpected trouble with your finances, but they are a very expensive method of borrowing. Therefore, you should only consider this option as a last resort. Short-term loans are unlikely to solve your money problems in the long term, and are not suitable for borrowing over longer periods, or for people with serious debt problems.
Before you apply for a short-term loan, make sure you have considered all other options carefully. Is the expenditure that you’re planning a necessity? If you can put off a purchase even for a few months then you could save yourself money in the long run. Read more about alternatives to short-term loans at moneyadviceservice.org.uk.
What are the eligibility requirements?
You should only apply for a Smart-Pig loan if you are certain you can meet the repayment terms. You must also:
- Have a valid UK bank account and debit card
- Be studying at a UK university
- Receive a student loan, grant or bursary from Student Finance England/Wales, SAAS or the NHS
- Be a UK resident
- Be at least 18 years of age
Did you know?
In 2015 the Financial Conduct authority (FCA) capped interest and fees on all high-cost short-term credit loans at 0.8% per day.
It also capped all default charges at £15 and the total cost (interest, fees) of loans at 100% of the original sum. This means you’ll never have to pay more than double the amount borrowed.
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