UK telephone directory firm 118 118 has moved into the personal finance market, offering unsecured loans to people turned away by the banks.
Launching today, 118118Money.com will offer £1,000 to £5,000 unsecured personal loans with fixed repayments over 12 to 24 months at an APR of 35.9% and monthly repayments from £57.
The executive behind the move is Mark Mayhew, a non-executive director of 118 118, and former NatWest banker who was once chief operating officer of its cards and e-ventures business.
"Five years on from the credit crunch, lending remains less accessible than it should be for many hard working consumers. Our new business strives to address this by lending when the banks won't in the £1,000 to £5,000 range," he says. "The new team at 118 118 Money brings significant experience of consumer lending to develop a more human approach to credit risk assessment."
Paul Noble, chief operations officer, 118 118 Money, says one million people in the UK were rejected for unsecured personal loans between £1,000 to £5,000 in the last year.
He says the business will offer finance to those who might otherwise be rejected by automated credit scoring systems.
"In addition to verifying each applicant's identity and accessing thousands of data points, we then have a team of underwriters who talk to applicants and bring back the human approach to making lending decisions," he says.
The 118 118 Money team is available 24 hours a day, seven days a week on a freephone number to support people through the application process, to understand the lending decision and to provide ongoing support with their loan.
Mark Mayhew says that research conducted by the firm indicates that 28% of people don't understand why they are rejected for a loan and 88%t don't know their credit score.
"A really big part of our relationship with our customers is helping them understand the importance of how credit ratings work and what it means for managing their finances," he says. "That's why we also offer a simple credit questionnaire for useful guidance on the best option for their circumstances. That might include a loan from a high-street bank, one from us or to consider paying off existing debts first."