LONDON, November 30, 2018 /PRNewswire/ --
World first loan where rate falls as borrowers improve their credit score
Designed to reflect the risk of the borrower in real time, rather than the start date of the loan
LiveLend has no fees - not for opening the loan, paying it back early or missing a payment
A new hi-tech loan launches today that actually rewards borrowers with better rates as they improve their credit score.
The LiveLend Reward Loan - a world first - uses technology that monitors the customer's credit score and reduces the rate on their loan as they improve their score.
Rate cuts will be delivered every three months, with 2% shaved off the rate for every 25 points of improvement in credit score. This means that borrowers who improve their credit score will see their monthly payments fall.
Crucially, the rate customers pay can never go up, even if their score worsens for any reason, giving LiveLend customers peace of mind, combined with the potential to save significant sums if they meet their repayments and improve their credit strength.
Using data provided by ClearScore, who supported LiveLend with the development of the Reward Loan, the lender estimates that one in four (25%) will unlock a reward within the first three months and almost half can expect to have their rate slashed after twelve months. Those with lower credit scores will benefit the most, with 90% estimated to receive a reward over the life of their loan. Of those who secure improved rates, three-quarters should see reductions of between 2% and 4% APR, with others securing cuts of up to 18% from their starting APR.
This is on top of already competitive pricing to reflect the current credit score of the applicant - using "real rates" rather than headline grabbing "rep APRs" that few qualify for.
In a similar vein, the lender has further committed to never charge fees - not for taking out the loan, closing it early or even missing payments.
Rates vary from 9.9% to 36.7%, with this range indicating the potential for those with less healthy credit scores to quickly improve their rate and save money, compared to a typical loan that sets a repayment rate for the lifetime of the loan.
The people at LiveLend also hope it will help further incentivise people to both pay back their loans and nudge them to improve their credit scores more generally - which they say unlocks a range of financial benefits in life.
To qualify, customers can visit LiveLend.co and apply in less than two minutes, with no impact on their credit file, the money is sent immediately and normally received within four hours. If accepted, all users will be offered a "real rate," which won't change.
Julia McColl, Head of Customer at LiveLend, said: "Many ordinary borrowers don't qualify for the headline rates that are plastered in bank windows. You'll either be offered a far worse rate or be rejected outright. And when you're accepted for a loan you're viewed as the same person for the entire term, often over many years. Our tech changes this, improving your rate as you improve your score, across the lifetime of your loan.
"This is not only a fairer product, but is designed to help people further improve their financial position through positive nudges and clear incentives."
Justin Basini, CEO and founder of ClearScore, said: "We are really excited to bring this fairer form of credit to our users. Our mission has always been to help everyone, no matter what their circumstances, achieve greater financial wellbeing and this innovation will give even more people access to cost-effective credit. This isn't just about rewarding people who have an excellent credit score, but also helping those who are working hard to improve their financial position."
For more information visit http://www.LiveLend.co. LiveLend is a company from Chetwood Financial.
Notes to Editors
1. Based on their Equifax credit score
2. This estimate is based on behaviour of those taking out standard LiveLend loans this year.