What is responsible lending?

Smart-Pig was created to offer short term student loans responsibly. Read Our Story to learn more.

Responsible lending isn’t just a buzzword for us, it’s what our loans are founded on. After one of our founders got into trouble with a payday loan, we realised that students needed a responsible lender that provided short term loans for students, created by students, just for students.

As well all the things Smart-Pig does differently to make sure our loans for students are safe, affordable and fair for our customers (read more at How We’re Different), we think responsible lending is an attitude.

How does Smart-pig make responsible lending decisions?

Smart-Pig is a responsible lender because:

  • We make sure you don’t borrow too frequently. Smart-pig short term student loans aren’t meant for borrowing long term. If we notice you are using Smart-Pig too much, and your short-term loan is turning into a long-term loan, then we’ll get in touch and conduct extra checks on you. In some cases, we might even agree to gradually lower the limit you can borrow to help you use the product less.
  • We make sure your loan is affordable. We check every applicant’s income and expenditure and then double-check it using typical values to make sure that your Smart-Pig loan is affordable for you based on your circumstances.
  • We work with you when things don’t go to plan. When things don’t go to plan and you can’t repay your smart-pig student loan as originally promised, then no late payment fees, a grace period and a lower interest cap all help protect you. These only solve half the problem though –our UK based team are here to help and will work with you to arrange an alternative, affordable way to repay depending on your circumstances. It’s important that you make the effort to work with us too –the more you tell us and the better able you are to keep promises, the sooner we will be able to get you back on track.

How are Smart-Pig loans affordable?

We do checks on every Smart-Pig loan to make sure they are affordable for you. This is called loan affordability and is done in addition to checks on your credit file and your history of repaying other forms of credit such as personal loans and credit cards.

This means that you can afford to repay the loan, as well as all your regular costs and other creditors, leave some money left over for safety.

During the application we ask you for your student finance income and any other income you may receive from employment, which we check. We also ask you to tell us about your costs, and we check this against information we get from your credit file, public databases, and sometimes your bank statements.

How is the cost of a Smart-Pig loan responsible?

Smart-Pig loans cost 0.8% per day, capped at 50% per loan. To borrow £100, a loan costs 80p per day until the total interest reaches £50. After that, no more interest or fees will be applied, even If things don’t go to plan. The annual interest rate, ignoring our interest cap, is 292%.

Another way of looking at it is our loans for students cost from £2.00 to £5.60 per week per £100 borrowed. To borrow £100:

  • A one-week loan repaying £105.60 in total costs £5.60 per week
  • A 25-week loan repaying £150 in total costs £2.00 per week. The average cost per week is lower due to the interest cap.

Representative Example: £200 loan for 30 days. Interest 292% p.a. fixed. Total to repay £248.00. Representative 1270% APR

Some people might think that a loan with a high APR can never be responsible. However, Smart-Pig loans don’t really cost as much as the APR suggests. APR is a great way of comparing the cost of loans longer than a year, but on loans shorter than a year, APR is difficult to connect to the cost of the loan or even the annual interest rate. To learn more, read APR Explained.

Smart-Pig may not always be the cheapest way of borrowing, compared to a free student overdraft. However, our short-term loans for students are instant, with a quick application and money paid to you the same day within just a few minutes. Our loans are also short-term, open and shut solutions to short-term problems, meaning you’re not committed to a longer-term credit product like a credit card that may cost much more over time.

How is Smart-Pig authorised?

Smart-Pig is a trading name of FCL Consumer Finance Ltd, which is authorised and regulated by the Financial Conduct Authority. Smart-Pig loans were the first short loan product to be authorised by the FCA in 2015 – read Our Story to find out more.

The FCA is a principles-based regulator, meaning that as well as specific rules to follow, Smart-Pig loans has to adopt these principles as a business and use them when conducting ourselves and making decisions.

Smart-Pig is a member of the Consumer Finance Association (CFA) through our parent company SBTP Group.


Need help? Speak to our team

Our customer services team at our UK call centre are on hand to deal with any queries you may have. You can also access your account online 24-hours a day via desktop, mobile or your tablet device.

Visit our Contact Page for more information.

0203 5071 930

[email protected]

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