Tappily line of credit review

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

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Important: Tappily has ceased lending until further notice because of recent changes in customer behaviour and engagement with the regulator, the FCA. This is to ensure all lending remains affordable despite the current cost of living crisis. Alternatives are available here.

What was Tappily?

Tappily gave you ongoing access to an agreed amount of credit you could draw on at any time – by transferring money to your current account. Tappily only charged you when you borrowed, so it was a free facility when you were not borrowing. Tappily was launched in 2017 as a sister company to SafetyNet Credit (which also offered 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. The company behind both brands began to put the majority of its weight behind Tappily.

How did Tappily work?

To apply for a Tappily credit line, you needed to share visibility of your bank account activity with Tappily. That didn’t mean handing over your Internet banking login details. Instead, you’d be prompted to give your bank permission to share transactional information with Tappily. If you decided to do this, your bank would verify that Tappily was authorised before securely sharing your data via an API (application programming interface). Tappily would use this transactional information for four reasons, listed below.

If you got approved, you’d have quick and easy access to the credit facility.

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

Underlying Tappily’s unique approach were 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 charged 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 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 than you otherwise might have.

How much did Tappily cost?

Tappily charged daily interest when you borrowed at a rate of 0.34% per day. That was £0.34 for every £100 borrowed. There were no other fees or charges.

For example, if you borrowed £150 for 4 days, the interest per day would be £0.51 and the total interest would be £2.04 representing 4 days at £0.51 per day.

Was Tappily safe?

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

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

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

Why did Tappily want to access my bank account info?

When you applied for a credit facility with Tappily, you’d be directed to your Internet banking login page to authorise your bank to share your transaction data with Tappily using Open Banking. Tappily would then use “read-only” copies of your transactions for the following reasons:

  • To run affordability checks. Tappily would 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 chose to, you could set up a trigger so that credit was only issued if your bank balance dropped 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 saw money being deposited in your account that took the balance to a level that “permits recovery in accordance with your agreement”, it would take a repayment. You could also make manual repayments.
  • To offer money management tools and a dashboard facility. Tappily displayed and categorised your spending – giving you the tools and insight to budget better and gain better control of your finances.

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

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

Pros and cons of a Tappily credit facility

Pros

  • Easy credit. Once the credit facility was in place, you could use the online dashboard to transfer credit (up to your agreed limit) whenever you needed it. You could also set up automatic deposits that triggered when you were nearing the limit on your authorised overdraft.
  • Apply with less-than-perfect credit. Tappily could still approve you for a loan if you didn’t have a great credit score. If you kept up with your repayments, this could help to build your credit rating back up.
  • No fees (other than the interest). Provided you kept up with your repayments, there were no additional costs other than the interest.
  • Money management tools. You could view interactive graphs on your personalised Tappily dashboard that tracked your spending habits and repayments over the past month.
  • Repayment caps. You could limit the amount taken by automatic repayments (subject to minimum repayments) so you didn’t pay back more than you could afford.
  • Credit limit increases. Your account was reviewed every 2 weeks, and if you’d been managing your money well, you’d be offered a credit increase, with no obligation to accept.

Cons:

  • Not cheap. Although interest was much less than the maximum set by the Financial Conduct Authority, this was still an expensive way to borrow money. Interest was added every day as a percentage of your loan balance. If you let the debt run on for a while by only paying the minimum required amount each month, then the costs would soon mount up.
  • Some may find it intrusive. You may have felt uncomfortable that Tappily monitored your banking activity on a daily basis.
  • Auto repayments may take you by surprise. When you owed Tappily money, it’d attempt to take the monthly minimum repayment if it saw sufficient funds had been paid into your bank account. That was great, provided you were expecting it!
  • Too convenient. Convenience could be a downfall as well as a benefit. If you forgot that you’d 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.

Tappily customer reviews

Tappily had received positive reviews from customers, according to review platform Trustpilot. It had an “excellent” rating of 4.8 out of 5, based on more than 3,400 reviews (updated June 2022). Many customers praised their helpful customer service and easy loan process.

How could I apply for a Tappily line of credit?

You could apply for a Tappily credit facility through its website. As well as the usual expected contact details, you’d 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 in to your Internet banking or open your banking app to do this).

Tappily would search your credit history and look at your current account activity to determine how much credit to offer you.

Was I eligible for Tappily?

You should’ve only borrowed from Tappily if you were certain you could comfortably afford to. You also needed to meet the following criteria:

  • UK resident.
  • Aged 18 or over.
  • In employment.
  • Have a guaranteed income of at least £1,000 per month.
  • Must have a current account with Internet banking.
  • Must not already be a SafetyNet Credit or Tappily customer.

Meeting these criteria didn’t guarantee that Tappily would say “yes” – it also ran credit and affordability checks. You can get to know your credit score and report through Finder to get a better idea of how prospective lenders see you.

Did Tappily run credit checks?

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

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

How quickly could I get a Tappily loan?

Tappily said that setting up a credit facility for a new customer could 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 2 hours.

Was Tappily any good?

Tappily was a good alternative to traditional payday loans, working out much cheaper. It was still expensive compared to traditional personal loans, however, so it was 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 was using creative innovation to offer loans to “non-standard” credit profiles in a post-payday-loan world, which was commendable. Applicants may have had to jump through a couple of extra hoops, but when this meant a significantly cheaper loan, it was worth it.

Frequently asked questions

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Written by

Chris Lilly

Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full profile

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