Tappily

Tappily line of credit review July 2019

Tappily uses open banking to offer a revolving line of credit of up to £2,500 that you can dip into as and when you need it.

Tappily was launched in 2017 as a sister company to SafetyNet Credit (which also offers a revolving credit service). Compared to SafetyNet credit, Tappily offers higher credit limits and lower rates, but is marketed at customers with slightly better credit scores.

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%.

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What is a line of credit?

With a line of credit, a lender approves you to borrow amounts up to a specified limit, as and when it suits you. Unlike a fixed-term loan, the credit facility remains open and available indefinitely. Examples of lines of credit include overdrafts and credit cards.

Because you only borrow the amount that you need, you can minimise interest costs. If you need to “top-up” your borrowing, then provided you’re within your limit, you can. The size of each repayment is also flexible, but will be subject to a minimum.

One of the downsides of a line of credit is that since it’s never closed, you could end up borrowing more frequently or over longer terms that you otherwise might have.

How does Tappily work?

To apply for a Tappily credit line, you will need to share visibility of your bank account activity with Tappily. That doesn’t mean handing over your internet banking login details – instead you’ll be prompted to give your bank permission to share transactional information with Tappily. If you decide to do this, your bank will verify that Tappily is authorised, before securely sharing your data via an API (application programming interface). Tappily will use this transactional information for four reasons, listed below.

If you get approved, you’ll have quick and easy access to the credit facility. In fact, Tappily states that you’ll be able to transfer money into your account within 15 minutes.

You can borrow whenever you need to, or you can set a trigger for Tappily to automatically deposit money into your account when you get close to your overdraft limit – which could help you to avoid expensive fees. Tappily will also automatically take repayments when you have cash coming in.

Underlying Tappily’s unique approach are some relatively high rates – lower than short-term, payday-style lenders, but higher than most credit cards. You probably shouldn’t use Tappily for longer-term borrowing, but if your bank charges extortionate rates and fees on overdrafts, the credit facility could save you money.

How much does it cost?

Tappily charges daily interest when you borrow. At the time of writing, Tappily charges 0.34% per day – that’s £0.34 for every £100 borrowed. There are no other fees or charges.

Is it safe to share my transactional data with Tappily?

Tappily is a direct lender, authorised and regulated by the Financial Conduct Authority. When you apply for a credit facility with Tappily, you’ll be directed to your internet banking login page to authorise your bank to share your transaction data with Tappily. Tappily will then use “read-only” copies of your transactions for the following reasons:

How Tappily uses your account info:

  • To run affordability checks. Tappily will use information on your regular income and outgoings to assess affordability, and to set an appropriate credit limit.
  • To help you avoid unauthorised overdraft charges. If you choose to, you can set up a trigger so that credit is only issued if your bank balance drops to a specified point (typically just before you go overdrawn), preventing you from incurring unauthorised overdraft charges.
  • To monitor your transaction data before taking repayments. When Tappily sees money being deposited in your account that takes the balance to a level which “permits recovery in accordance with your agreement”, it will take a repayment. You can also make manual repayments.
  • To offer money management tools and a dashboard facility. Tappily displays and categorises your spending – giving you the tools and insight to budget better and gain better control of your finances.

Pros and cons of a Tappily credit facility

Pros

  • Quick and easy credit. Once the credit facility is in place, you can use the online dashboard to transfer credit (up to your agreed limit) whenever you need it, in just 15 minutes. You can also set up automatic deposits that trigger when you’re nearing the limit on your authorised overdraft.
  • Apply with less than perfect credit. Tappily may still approve you for a loan if you don’t have a great credit score. If you keep up with your repayments, this could help to build your credit rating back up.
  • No fees (other than the interest). Provided you keep up with your repayments, there are no additional costs other than the interest.
  • Money management tools. You can view interactive graphs on your personalised Tappily dashboard that track your spending habits and repayments over the past month.
  • Repayment caps. You can limit the amount taken by automatic repayments (subject to minimum repayments) so you don’t pay back more than you can afford.
  • Credit limit increases. Your account is reviewed every two weeks and if you have been managing your money well, you will be offered a credit increase, with no obligation to accept.

Cons:

  • Not cheap. Although interest is much less than the maximum set by the Financial Conduct Authority, this is still an expensive way to borrow money. Interest is added every day as a percentage of your loan balance.
  • Some may find it intrusive. You may feel uncomfortable that Tappily monitors your banking activity on a daily basis.
  • Too convenient. Convenience could be a downfall as well as a benefit. If you forget that you’ve set up automatic credit deposits, you could end up taking out a loan without meaning to. The ease of securing credit could also make it harder to resist unnecessary spending.

How do I apply for a Tappily line of credit?

You can apply for a Tappily credit facility through its website. As well as the usual expected contact details etc, you will need to provide your:

  • Bank account sort code and account number.
  • Debit card details.
  • Authorisation for your bank to share transactional data with Tappily.

Tappily will run a search of your credit history and will look at your current account activity to determine how much credit to offer you.

Am I eligible?

You should only borrow from Tappily if you are certain you can comfortably afford to. You must also need to meet the following criteria:

  • UK resident.
  • Aged 18 or over.
  • In employment.
  • Salary or other regular income of at least £1,000 a month after tax.
  • Minimum £200 worth of disposable income.
  • Must have a current account with internet banking.
  • Must not already be a SafetyNet Credit or Tappily customer.

Frequently asked questions

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