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Last updated on 10th December 2018

Unexpected expenses - the problem

Unexpected expenses are a huge problem for nearly half of us – approximately 40% of the country has under £100 in savings. This means they don't have a financial backup plan for when things go wrong.

Unexpected expenses are a huge problem for nearly half of us

We don’t think a broken washing machine, emergency trip to the dentist or a small car repair should be life-changing… But it can be. Without an emergency fund to fall back on, millions of us need to borrow to cover our unexpected expenses. Often, the ways we do that are expensive, confusing, complicated… or all three. Tens of thousands of people get trapped by the spiral of debt, needing to borrow to cover existing debts that stemmed from something small. How many people do you know trapped in their overdraft, stuck paying off the interest on their credit card, or forced to borrow expensively from a payday lender? By offering a brand new way of borrowing, we want to stop that before it can ever happen.

Facing unexpected expenses happens more often than you might think

You can’t predict unexpected expenses, which is what makes them so tricky. How do you prepare for something if you don’t even know what it’s going to look like or when it's going to happen? We spent a year and half listening to experts, reading research and talking to people from all walks of life about how unexpected expenses and how they can strike. We found that on average, people are faced with between one and three unexpected expenses each year. The average cost of one of these unexpected expenses is between £225-£275. We also found that people dramatically underestimate how likely they are to be hit by an unexpected expense. We know they happen, but we seem to treat them like one-offs and ignore the fact they happen again and again.

We think we have found a solution

If we can give our members a bit more financial flexibility, allowing them to stretch their budgets when they need to, we can make them less vulnerable. If we make people less vulnerable, we can help reduce their stress and increase their financial wellbeing and overall happiness. How? Simple.

Take the interest out of borrowing

People think in pounds, not percentages. So do we. We believe that interest rates make it really difficult to work out how much you’re credit will actually cost, so we don’t charge it. Less confusion, less financial stress, more peace of mind. Instead we charge a small, fixed monthly fee. There's no need to try to work out how much borrowing with us will cost you as the total amount is clear and easy to see.

Make advances available on-demand

No more panicking at the last minute about what you’re going to do when you're suddenly faced with unexpected expenses. Our advances are available as and when you need them, so when you do need borrow they’re waiting for you. You’ve got four months to repay each of your advances, and after you’ve borrowed, you pay them off in equal monthly instalments, along with your monthly fees. The second advance will be available after you repay the first one in full.

Helping people to plan for unexpected expenses

Some people have told us it’s a bit like ‘renting a safety net’ and others have said it's like ‘Netflix for finance’. Having a membership with us lets you relax knowing you’ve got a financial backup plan for unexpected expenses sorted, so you don’t have to make potentially over costly decisions at the last minute. If you would like to find out more about a Creditspring membership or check if you are eligible to be a member just click here