The Lending Well is the first peer to peer lending company to move into the payday loan market and we have already covered the moral and financial implications for potential investors thinking of adding their spare cash into the lending pot in a previous article here. In this Lending Well review we’ll be looking at the company from a borrowers point of view.
The Lending Well have a reponsible lending charter clearly displayed on their home page, presumably a preemptive measure for the upcoming changes the government are expected to recommend to the loan industry. One of the recommendations expected is that lenders display the total cost a payday loan is going to cost the customer so it’s a surprise that The Lending Well don’t mention on either the home page or their ‘borrow’ page that they charge a £6 fee if you want your loan paid into your account the same day.
As a payday loan by its nature is for a financial emergency most borrowers would be looking for their money today – which is why many of the payday lenders do pay out the same day without any additional charges.
You will pay £30 per 30 days for every £100 you borrow which equates to 1% interest per day and that’s assuming you are happy to wait 3 working days for the money to be transferred into your account.
A quick look at our table where we compare payday loans shows that £30 per £100 puts The Lending Well on a par with Pounds Till Payday, makes them cheaper than Wonga and Pounds2Day and at least a fiver dearer than 4 of our top 5 lenders and a massive double the cost of our number 1 option QuickQuid.
If that doesn’t put you off applying for your loan from this lender then you should also know that they will be contacting your employer although they say they do not “aim to tell them that you are taking out a loan with us” which is good of them although a better assurance than ‘aiming not to’ whould probably be required to put this writers mind at rest.
As well as using a credit reference agency to check your personal accounts and any joint or business accounts, they will also use a fraud prevention agency to check for any fraudulant activity from your home address and if you are a business owner, your business address.
As a peer to peer lending company it stands to reason that they have to carry out these checks to try and limit the amount of defaults. How long is an investor going to leave his money in the pot once he’s hit with a few defaults? My problem with The Lending Well is their high charges when clearly they are only accepting customers of better than average standing and ensuring that any money they lend out is well under what the borrower can afford to pay back on their next payday and so lowering the risk of default considerably.
One of the reasons given for the high charges within the payday loan industry is the amount of defaults they need to contend with but given the high level of qualification The Lending Well require from a potential borrower, what’s their excuse?
At £30 per £100 for 30 days plus a £6 fee for same day transfer there are far cheaper lenders on the market and besides, without a better guarantee that they won’t be divulging your loan application to your employer, we would not recommend you dip into The Lending Well.