To open a credit line with Drafty, you just need to apply and be accepted. You can find out if you’ll be approved without affecting your credit score as well.
DRAFTY
CREDIT LINE
Apply for a credit line for up to £3,000
With a Drafty credit line, what
you see is what you get.
No fees under
any circumstances
Pay interest only
on the money used
Representative 96.2%APR
| Borrowing✝: | £300 for 3 months |
| Total Repayable: | £332.40 |
| Interest Rate: | 0.18% per day |
| Interest (amount): | £32.40 |
Representative Example:
Representative 96.2%APR. Based on drawing your full
approved credit limit of
£1200 and repaying in 12 monthly payments at an
Annual Interest Rate of 65.7%(Fixed).
Total repayable is
£1,601.40.
What is a credit line?
A credit line has some elements in common with a loan, an overdraft or a credit card. But it’s also different – some people might find a credit line more convenient, while others may prefer a more traditional type of credit.
Here’s how a credit line works:
If you’re approved, you’ll be given an account with a credit limit. You can then transfer money from your Drafty account to your bank account at any time (it usually only takes about 90 seconds to transfer to your bank).
You’ll only be charged for what you borrow, and you’ll have to make minimum monthly payments at least.
How is interest on a credit line calculated?
How much you pay on your credit line will depend on how much you borrow from it. If you haven’t borrowed anything, you don’t need to pay anything. There are no subscription fees or late fees or anything like that to worry about.
You will be sent a monthly statement which shows your total outstanding amount, and what your minimum monthly repayment is. Here’s how that’s calculated.
Your repayment amount will be whichever is larger out of:
6% of the amount you borrowed plus 0.18% daily interest
£50 (unless your outstanding balance and interest are under £50 in total).
If your line of credit was agreed before April 2021, your repayment amounts might be different. For more, please read this FAQ
Representative Example:Representative 96.2%APR. Based on drawing your full approved credit limit of £1200 and repaying in 12 monthly payments at an Annual Interest Rate of 65.7%(Fixed). Total repayable is £1,601.40.
Credit line vs Loan
A loan is usually for a defined amount of time – whether it’s a month or so (like a payday loan), a six- month loan (like our sister-brand, Lending Stream), or a multi-year loan. The rates are usually lower if you borrow for longer (although that doesn’t mean you can take out a one-month loan and just pay it back two years later for a lower rate).
A credit line is different because it’s more flexible, without that defined amount of time. A credit line is available for you to use whenever you want, and you repay as much as you want (along with minimum payments, of course).
Credit line vs Overdraft
The most similar point between a credit line and an overdraft is that they’re both somewhat flexible – they’re there for you to borrow from whenever you need, and you usually don’t pay anything if you don’t use them.
However, an overdraft is linked directly to your bank account, whereas a credit line isn’t. You can apply for a Drafty credit line no matter who you bank with. It might be worth taking a look at how much your overdraft costs you, especially if it’s unarranged. You might actually get a better deal with Drafty!
Why Drafty?
A Drafty credit line is a fast way to get cash whenever you need it. Just apply online and, if approved, you’ll be given a credit limit that you can use whenever you want*.
Credit line vs Credit card
A credit card is a physical card that you can use to make purchases. You have to make a minimum payment, but other than that, you can usually repay as and when suits you (within reason).
A credit line is different from this, as you can’t use it to make payments. Instead, you draw funds from your credit line, and they’re sent to your bank account – so you can then use your debit card to make purchases.
Depending on the credit card, it may be cheaper to use credit cards. Some people do prefer to use credit lines, as credit cards can sometimes feel a bit too tempting to use in the moment on large purchases!
How to apply for a credit line
To apply for a credit line with Drafty, just go to our Apply page. You’ll need to fill in some personal details, and information about your income and outgoings each month. This will let us conduct identity, fraud and affordability checks, as well as checks with a credit reference agency (although we won’t leave a mark on your credit record unless you actually take out a credit line).
How to use a credit line
It’s important to be responsible if you use a credit line, since the more of an outstanding balance you have, the more you’ll have to pay. We’ll review your usage of the credit line occasionally, to make sure your limit is appropriate and that you’re not struggling too much to repay.
Credit line repayments
We’ll set up minimum repayments, but you can make extra repayments at any time. The more you repay, the less interest you’ll have outstanding. All you need to do is log into your Drafty account and you can make a repayment from there whenever you want.
Reusing your credit line
You can borrow within your credit line whenever you want – so if you repay, whatever you repaid is available to borrow again. You just need to log in and draw money from your Drafty account to your bank account. We’ll send the money to your bank within just 90 seconds whenever you do.
FAQs
To be eligible to apply for a credit line, you’ll need to be at least 18 years old, a UK resident, employed with a UK bank account and debit card. You will also need to pass affordability, credit and fraud checks.
If you’re approved for a Drafty credit line, it’s easy to draw cash from it – just log in and go to your account. You can draw cash to your bank account from there.
If you borrow anything from your line of credit, you’ll have to make minimum monthly repayments at least. You can set these up automatically. The quickest way to make further repayments is to log into your account and make payments online from there.