Launched by US financial services platform provider Think Finance, the “new way to borrow” promises to promote lower rates, offer greater repayment flexibility than rivals and charge no fees other than interest.
Representative APR, the rate lenders must display to show the cost to borrowers if their debt is outstanding for a year, is 1,971 per cent compared with 5,853 per cent charged by market leader Wonga, for example.
The launch is being backed by a TV and online campaign that uses the strapline “good today, better tomorrow”. It shows a grey animated call centre operative at a nameless payday loan company stunned when a caller requests a fee-free flexible loan before switching to a real-life satisfied customer bathed in primary colours.
John-Paul Savant, CEO of Think Finance UK, told Marketing Week the ad and brand name intends to convey a proposition that is “different and optimistic, candid and helpful’.
The payday loan sector has come under-fire from politicians, consumer groups and the Archbishop of Canterbury recently, who described Wonga as an “unacceptable” business last month. The sector was also the subject of an Office of Fair Trading probe that found widespread irresponsible lending.
Responding to the criticism, Savant says: “[Payday loans] are not appropriate for everyone but they are for people without alternative [credit options] where the only other alternative is a loan shark.”