Lender in Focus 6.4: Lending Stream APR

Lending Stream APR

Lending Stream APR

Do you want to compare the potential costs of borrowing with Lending Stream, with the costs of borrowing from different loan providers? If so the Lending Stream APR is a good place to start.

Also important to understand how a lender’s repayments will work and whether they offer instalments loans, paid back over 2 or more repayments. Or, more traditional payday loans, with only one repayment on your next payday.

CashLady takes a closer look at the Lending Stream APR and their repayment schedule, to find out whether consumers are getting a good deal.

Payment schedule 

Lending Stream describes itself as a ‘payday loan alternative’.

A traditional payday loan is paid back in only one instalment, on your next payday.

Most payday lenders now actually offer their customers both payday loans and instalments loans. These, they are able to pay back in 2 or more instalments.

Lending Stream is a bit different, in that it makes sure its customers are set up with affordable repayments. Also, they give them up to 6 months to pay back their loan.

Although Lending Stream offers instalment loans with 6 repayments, customers are able to repay their loan early at no extra cost. In fact, Lending Stream borrowers could actually save money on interest, by repaying their loan early.

How are repayments taken?

Repayments are taken by Continuous Payment Authority (CPA).

When you apply for a loan with Lending Stream, you will be asked to agree that Lending Stream is able to take your loan repayments by CPA.

CPA is the permission you give Lending Stream to collect your loan repayments automatically. That is, from your bank account that is linked to your debit card, on a particular date. Many people can find it easier and more reliable to set up CPA when taking out a short-term loan. It can also help borrowers to avoid missing payments.

You do have the right to cancel Lending Stream’s permission to take automatic payments at any time. However, you will be required to arrange another way of making repayments, such as standing order or cheque. In order to cancel CPA, you will need to contact Lending Stream.

How much will my repayments be? 

Lending Stream will calculate your repayments as part of the application process.

How much your repayments will be, will depend upon how much you choose to borrow and the interest rate of your loan.

The 6 monthly repayments may not be equal. It is important to understand how much your repayments are each month so that you are better able to budget.

Will I be charged less if I repay my loan early?

Lending Stream does not charge any extra fees for repaying your loan early.

If you do choose to repay your loan early, this could result in you paying less in interest and therefore saving money. Especially compared to if you had paid your loan back as per your original agreement.

Can I change my repayment dates after I have taken out a loan with Lending Stream?

Borrowers are also able to request to change their loan repayments dates by email. The email address is payments@lendingstream.co.uk. Or by calling Lending Stream on 0203 564 7028.

Table of borrowing

Lending Stream doesn’t currently have a calculator on their website, to show what you could expect to pay back. Once this information is available, we will update the following table.

Lending Stream table of borrowing

What is the Lending Stream APR?

APR means Annual Percentage Rate.

The Lending Stream APR is a good way of comparing Lending Stream’s interest rate with interest rates of other lenders. This way, you can find out the total amount you could expect to pay back on your loan. (although you could pay back less interest if you choose to repay your loan early).

Lending Stream’s representative APR is 1272%.

It is worth noting, that not everybody who applies to a short-term lender for a loan will get the representative APR. Legally, at least 51% of people who take out a loan must get this representative rate. The other 49% could be offered a different APR to the representative APR that is advertised.

How does Lending Stream’s APR compare to the APR of other lenders?

CashLady has picked 3 other short term loan providers at random to compare the Lending Stream APR to:

The Money Shop

The representative APR of The Money Shop is 450%.

For example: If you took out a loan of £100 and paid it back over 3 instalments, you could expect to repay a total of £136.98.

Quickquid

QuickQuid’s representative APR is 1295%.

For example: If you borrowed £200 for 84 days, you could expect to repay a total of £334.40, including interest of £134.40.

Satsuma Loans

The representative APR of Satsuma Loans is 991%.

For example, you choose to take out a loan of £400, repayable over 6 months. You would pay back 6 monthly repayments of £126.40, making the total amount repayable £758.40.

Lending Stream daily cap

Lending Stream daily cap

Since January 2015, FCA rules have been in force that states the daily interest rate charged by any short term lender cannot be more than 0.8% per day of the amount borrowed.

Total loan value repayment cap

Lending Stream is an FCA-authorised and regulated firm. Therefore, it must meet these criteria:

•   Fees and interest per day must not exceed 0.8% of the amount borrowed

•   Default fees must not exceed £15, although interest can still be charged after default (but only at or below the initial rate)

•   Borrowers will never pay more in interest and fees than 100% of the total amount they borrowed.

This means that you should never pay back more than 100% of the amount you borrowed from Lending Stream.