Salad Vs Creditspring Vs Drafty - A Clear Comparison

With the ongoing cost-of-living crisis, many families are finding themselves living paycheck to paycheck. During these times, an unexpected expense when your payday is still a few weeks away can make it difficult to tide yourself over.

In such times, ethical short-term loans with set repayment terms can make it easier to handle unexpected expenses. When planned correctly, this short-term borrowing option can help you support your wider financial requirements.

It’s natural to feel hesitation when looking to borrow money from lenders, especially if you’re struggling with unsteady employment income or dealing with poor credit scores. It’s also perfectly normal to be worried about the additional pressure on your finances from the loan repayments. In response to these concerns, there are many financial providers willing to provide loans on simpler terms, subject to meeting their eligibility requirements. In the UK, the three lenders that come up often are Salad, Creditspring, and Drafty.

While all three options offer access to short-term funds, they operate in different ways. This article compares each of these providers, how their service works, and who may be best suited for your needs, helping you make an informed choice.

Lender Profiles

1. Salad

Salad is an ethical, regulated lender offering an alternative approach to assessing affordability and lending. It began operations in 2018, when it saw a gap in access to short-term credit options for those with lower credit scores. These scores are also impaired in people with a difficult financial past and thin credit files. To meet this gap, they designed a fairer solution with the help of Open Banking technology, changing the way lending applications are processed.

Unlike many mainstream lenders and loan providers, Salad uses Open Banking over credit scores in its initial assessment to assess the affordability and eligibility of its borrowers.

Salad has customers across the wider UK, who follow them on social media channels including Salad - YouTube and SALAD | LinkedIn.

2. Creditspring

Creditspring is an FCA-regulated lender offering short-term lending options. Once approved, users can take out a loan (advances) up to twice a year under a fixed fee subscription model over typically high APRs.

3. Drafty

Drafty is a lender offering loans and a flexible line of credit similar to a bank overdraft. Those approved for a defined credit limit are allowed to draw funds as required and repay them with flexible repayment terms. Their short-term loan options allow you to borrow between £1000 and £3000. Drafty typically charges a monthly membership fee for its services.

A Comparison Table

	Salad	Creditspring	Drafty
Type of lending product	Personal loans assessed on Open Banking data	Subscription-based loans with fixed fees	Credit lines and loans
Borrowing Amounts	£300 - £2000	£400 - £2400	Line of credit: £50 - £3000 Loans: £1000 - £3000
Credit Check	Not in the initial lending assessment	Initial soft search	Yes
Interest Charged	Yes	Yes, via lenders	Yes
Additional Fees	No	Membership fees	Monthly membership fees
Repayment	Set repayment terms	Fixed installments	Flexible options

Key Points to Consider

Application Process

Salad

Salad uses a full digital lending process where all users need to do is request loan amounts from £300 to £2000 on their loan builder page.

According to the amount chosen, you can choose between 6 and 24 months to repay the borrowed amount. They follow a clear application process where users can see the APR %, monthly repayments, and the total repayment amount over a representative example. You need to be employed for at least 6 months to apply.

Creditspring

Creditspring uses an online application process and a soft credit and affordability search. Applicants receive an initial offer with 14 days to decide if they want to continue the process. However, approvals are not assured even after paying the membership fees.

Drafty

Drafty has a completely online application process, by checking credit scores to assess affordability and creditworthiness. Under their Flex programme, applicants receive a credit limit to draw funds as needed without the need to reapply.

Approval Process

Salad

Salad is a financial provider that supports financial inclusion. Instead of conducting traditional credit score checks, their process uses Open Banking technology in line with regulatory expectations.

They secure your Open Banking data after your pre-authorisation and use it to assess your creditworthiness and repayment abilities. This technology allows them to look at your current income and assess that you are borrowing what you can afford and repay.

Once approved, the loan amount is deposited into your bank account on the same day, and may be within as little as two hours.

Creditspring

Creditspring’s approval process begins with an initial eligibility assessment, which includes a soft credit search. But this doesn't guarantee approval. Instead of charging interest, they charge a fixed membership fee spread over the course of your agreement. Once approved, members gain access to two loans per year. You need to clear the first loan to access the second.

Drafty

Drafty follows a formal approval process, where applicants undergo typical credit and affordability checks to determine eligibility. Once assessed, users may be assigned a credit limit and may increase over time depending on the repayments made.

Transparency

Salad

Salad’s terms are transparent and clear. Users can see the APR that they need to pay and the repayment schedule. All charges are disclosed during the application process.

Creditspring

Creditspring discloses membership fees and broker status, but the total cost depends on the borrowing amounts. This can make it harder to understand complete repayment obligations.

Drafty

Drafty has generally transparent terms, but it may need further careful review. They explain interest rates, monthly fees, and daily charges, but costs may escalate if borrowing continues over a long period.

In Summary

Understanding where you are borrowing your money and from whom is critical. Each of these providers serves different purposes. So, whether you apply for any lending option, either from Salad, Creditspring, or Drafty, it’s important to do your due diligence to assess which option may be right for you and your circumstances. This is even more crucial if you’re in a financially difficult situation.

That said, whether you borrow now or in the future, ensure you make your borrowing choices wisely.