Tappily

Tappily line of credit review 2021

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.

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Tappily

Get up to £2,500 when you need it with Tappily

  • Get ongoing access to a flexible line of credit
  • Helps you to avoid expensive overdraft fees
  • Receive your funds within 15 minutes of approval

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 Tappily?

Tappily gives you ongoing access to an agreed amount of credit that you can draw on at any time – by transferring money to your current account. Tappily only charges you when you borrow, so it’s a free facility when you’re not borrowing. Tappily was launched in 2017 as a sister company to SafetyNet Credit (which also offers a revolving credit service).

Compared to SafetyNet credit, Tappily initially offered higher credit limits and lower rates, but was marketed at customers with slightly better credit scores. More recently, the company behind both brands has begun to put the majority of its weight behind Tappily.

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.

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 much does Tappily cost?

Tappily charges daily interest when you borrow at a rate of 0.34% per day. That’s £0.34 for every £100 borrowed. There are no other fees or charges.

If you borrowed £500 for two weeks, you’d pay £1.70 per day, so £23.80 overall. This equates to an annual rate of 124%, and an APR of 49.7%.

Is Tappily safe?

Tappily is a direct lender, and a trading name of Indigo Michael Ltd., which is authorised and regulated by the Financial Conduct Authority (FCA). You can see what activities it’s allowed to get up to in the FCA’s Financial Service Register listing.

It’s also a regulated third party provider under the Open Banking Implementation Entity (OBIE). This means that banks and building societies are required to share your transaction data with third parties such as Tappily – but only if you request that they do so. Every 90 days you’ll be prompted to reject or allow Tappily’s ongoing visibility of your data.

Your data is securely handled in bank-level systems using 256-bit SSL encryption.

Why does Tappily want to access my bank account info?

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, using Open Banking. Tappily will then use “read-only” copies of your transactions for the following reasons:

  • 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.

As Tappily is a regulated third party provider under the FCA and the Open Banking Implementation Entity (OBIE), your bank must share your transaction data with Tappily if you request it to do so. Every 90 days you’ll be prompted to revoke or extend Tappily’s visibility of your data.

Tappily doesn’t lend without having access to this information, which forms part of its risk assessment process.

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 (you’ll need to log into your internet banking or open your banking app to do this).

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 for Tappily?

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.
  • Have a guaranteed income
  • Must have a current account with internet banking.
  • Must not already be a SafetyNet Credit or Tappily customer.

Meeting these criteria doesn’t guarantee that Tappily will say “yes” – it also runs credit and affordability checks.

Does Tappily run credit checks?

Yes. Like all responsible lenders, Tappily will check your credit file when weighing up your application. That doesn’t necessarily mean that low credit scores are ineligible however – in fact Tappily is designed with these customers in mind, and uses additional measures, such as open banking, to find ways to approve applicants that might be rejected on credit score alone.

Tappily also reports back to credit reference agencies – so making Tappily repayments on time and in full will benefit your credit score (and missing repayments will damage it).

How quickly can I get a Tappily loan?

Tappily says that setting up a credit facility for a new customer can take up to 24 hours. Initiating and receiving a transfer from the Tappily app (or from the site) should then be fairly instant, taking at most two hours, but more likely a couple of minutes.

Is Tappily any good?

Tappily is a good alternative to traditional payday loans – working out much cheaper. It’s still expensive compared to traditional personal loans, however, so it’s not advisable for frequent borrowing of larger sums or borrowing over longer periods. Technically you could borrow up to £2,500, but that would cost just under £60 per week in interest. For loans of that size, there are cheaper options on the market – provided you can get approved (use an eligibility checker to see).

Along with a handful of other strangely-named new companies, Tappily is using creative innovation to offer loans to “non-standard” credit profiles in a post-payday-loan world – which is commendable. Applicants may have to jump through a couple of extra hoops, but when this means a significantly cheaper loan, it’s worth it.

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