Guarantor lender George Banco has launched into the short-term loan market catering for borrowers with poor credit scores.
The alternative lender provides personal loans between £1,500 and £5,000 at 46.8%% APR and requires the support of a guarantor such as a close family member.
The average George Banco loan is £3,300 over three years, with funds being issued through an online process.
Currently only Amigo Loans supplies similar short-term guarantor loans in the UK.
Marc Howells, managing director of George Banco, said: “We are very excited to be launching our platform at a time when the sector is at an early stage and therefore presents significant opportunity.
“There is undoubtedly real demand for this type of finance from the millions of consumers who are currently deprived of credit.
“George Banco offers the finance for practical necessities that are not currently available in the market place without having to pay very high rates of APR.”
The loans aim to rebuild consumers’ credit profiles by consolidating existing debt, as the majority of borrowers state they require finance to consolidate existing short-term loans such as payday.
Howells added: “These financial products only serve to reinforce the debt cycles of millions of UK consumers and worsen their credit rating.
“Through our board’s strength and proven experience within financial services, banking and consumer finance; we strongly believe we are offering a truly unique product.”
The product has a fixed interest rate calculated on a monthly basis over the fixed term of the loan.
George Banco is accredited by the Consumer Credit Association and is regulated by the Financial Conduct Authority.