How Do Repayments Work?

The One Stop Money Shop offers instalment loans, repaid over 6,9 or 12 months. Our repayment schedule is designed to be flexible, allowing customers to choose how long they want to borrow for and giving them the option to repay early at any point. Our guide below explains how our repayments work and for any further questions, please contact us at [email protected]

  • Select your repayment date
  • Repay in equal monthly instalment loans
  • Collected via continuous payment authority
  • Repay early with no added fees

Select your repayment date 

When applying, customers can choose which day of the month they would like to repay, with most choosing the last working day of the month because this is when they get paid from work and are likely to have money available in their account. Some other customers prefer to set their repayment date for the day just after their pay date, giving them some extra time to organise their finances and pay off other bills beforehand.

We can accommodate customers with all different repayment dates including the 15th or 25th of the month or those that get paid on a four-weekly cycle. Either way, it must be convenient and practical for you.

You may also change your repayment date at any time during the loan term, provided that you do not have several payments outstanding. Our customer care team will be able to assist you by emailing us or calling us on 01924 377771.

Repay in equal monthly instalments 

All repayments with The One Stop Money Shop are collected in equal monthly instalments. So whether your loan lasts 6 or 12 months, you will know exactly how much you are repaying each month and this information will be presented to you in writing and signed in your loan agreement.

As a regulated payday loans direct lender, we understand that our loans are best suited for emergency purposes. By providing a repayment solution that is straightforward and the same every month, it allows the customer to arrange their finances and budget effectively.

£500 loan repayable over 12 months £81.25 per month total amount payable £975.00
Representative 295.60% APR

Loan amount £500 over 12 Months:

Interest Repayment
Month 1 £81.25
Month 2 £81.25
Month 3 £81.25
Month 4 £81.25
Month 5 £81.25
Month 6 £81.25
Month 7 £81.25
Month 8 £81.25
Month 9 £81.25
Month 10 £81.25
Month 11 £81.25
Month 12 £81.25
Total Interest £475.00
Total Repay £975.00

Repayment reminders 

Our team will send you repayment reminders on the days leading up to each monthly instalment. You will receive a text message and/or email address confirming the amount we will be collecting and on what date. This aims to provide transparency and ensures that there are no surprises when money has been collected from your account.

repayments

Collected via continuous payment authority 

All repayments are collected by our system using a process called continuous payment authority. This is a system that sets up ‘recurring repayments’ similar to a direct debit. The idea is that we can collect the same amount from your debit or current account every month, at a scheduled time, and you do not have to lift a finger.

All you need to do is make sure that there are sufficient funds in your account available for collection. However, there is no need to call us up to make a manual repayment, go to the bank, make payment over the phone or send money via the post – as this is all taken care of via our system. For more information, read here about continuous payment authority.

Repay early and no early fees 

Although we offer 6 months, 9 month loans and 12 month products, if you find that you are in a position to repay your loan early, you can do so at any point. You simply need to call up our team or email us to confirm and we will be able to take the full repayment. We do not charge any early repayment fees or exit fees (unless your loan is only open for one month) – so overall you could save money on the interest accrued by repaying your loan early.

Other FAQs 

Can I repay by cash or cheque?  

All payments are taken via a debit or current account. In some cases, we may accept cheques as a form of repayment, but we do not accept cash.

Can I repay by credit card? 

No, we do not allow customers to repay their loans using a credit card. This is because it is like using one form of debt to repay another and can lead to a spiral of debt. 

What happens if I miss repayment? 

If you miss a repayment, you will be contacted by our customer care team who will try to assist you. If you are up to 3 days late, there will not be any added fees. However, if you are unable to repay there may a default fee that is applied but this will never exceed more than £15. Where possible, we will try assist you with forbearance, offering extended payment dates, flexible repayment plans and other ways to help you get your finances back on track. 

Can someone repay on my behalf? 

In very rare circumstances we may allow someone else to repay your loan off on your behalf. This is if you find that are in a position and cannot repay your loan and all other methods of payment plans have been exhausted. We offer a no guarantor product, so loans are not usually paid off by another individual.

What is APR and How Does It Work?

APR stands for the ‘Annual Percentage Rate’ and is the simplest way to measure the cost of financial products and compare them effectively. With all types of loans, credit cards and mortgages across the UK and the world using APR as their yardstick, one can determine the cost of the product and make informed decisions over its price.

As an ‘Annual’ Percentage Rate, it refers to how much the loan or product would cost if taken out for an entire year. So for loan that only last a few weeks, it is typically compounded until it reaches the APR figure.

As the online loans industry is regulated by the Financial Conduct Authority, it is essential that every lender, including The One Stop Money Shop, clearly presents the APR and cost of a loan to every customer that applies.

Why is the APR for payday loans so high? 

Payday loans and other high cost products are commonly criticised for having APRs of 1,000% or more. The reason for such a high number is because the average loan only lasts a few weeks or months and when compounded to become an annual rate, it will tend to run in the hundreds or thousands of percent.

apr

For this reason, it is worth using other cost indicators when comparing payday loans such as looking at the cost of borrowing £100, which is capped to £24 per £100 borrowed, and the daily interest rate, which is capped at 0.8% per day.

The One Stop Money Shop offers an alternative to payday loans, where customers can choose to borrow over 6 or 12 month loans and our representative APR is 295.60% APR.

What is representative APR? 

The representative APR is when the rate (or a lower rate) is given to at least 51% of successful candidates that are approved. You may see loan products are regularly advertised as ‘representative’ and this means that more often than not, this will be the rate that is provided.

However, every individual applicant is different and their loan will vary based on loan amount, duration, credit history and affordability, so even if they wish to borrow £1000, it is common that the representative APR will vary slightly. 

What is typical APR? 

The typical APR means that this is the rate given to at least 66% of successful loan candidates, whereby two out of three customers will get this rate.

Fixed vs variable APR  

APRs will come in the form of either fixed or variable. When fixed, it means that the rate charges will remain the same during the entire loan duration – so you know exactly how much you are paying each month and there are no changes. This is very common for personal and instalment loans.

fixed-variable

When the APR is variable, it means that it is subject to change and go up or down during the loan duration. So if you have the loan open for 12 months or 36 months, the rate you pay each month may go up or down depending on market changes. This is less common for short term finance, but very common for mortgages which are usually taken out at a fixed or variable rate.

For some people, they prefer knowing exactly what they are paying each month and can budget accordingly. Hence, the fixed option is a good fit. For others that accept a variable rate, they consider that the rates could go down and they could make a saving as a result.

Why was I not given the APR advertised? 

Every customer is different and there are various factors that could change the rate they receive, and therefore they do not get the rate advertised. As explained below:

Credit rating: Those with good credit ratings are typically able to receive better rates on their loans (and credit cards). This is because they are deemed a lower risk of default and the lender rewards this accordingly with a lower rate. However, for those with a bad credit rating or history of missed payment, there is a greater risk to the lender that the customer might default. With this in mind, the lender may charge a higher APR, different to the one advertised, to overcome this potential risk.

Loan term: As mentioned, APR is based on an annual calculation, so those with shorter loan terms might see higher APRs because the cost of the loan is compounded until it makes up one year. So if you opt for a shorter term product, you could expect a higher APR. 

Affordability: Some customers will have different monthly income and expenditure and to manage this effectively, some lenders may charge higher or lower rates to mitigate their risk.

How to Improve Your Credit Score

Your credit score is a numerical value (usually from 0 to 999) and is used by loan providers and credit companies to determine whether you will be eligible for credit. Your credit score is something that you get automatically in the UK when you turn 18 and is supposed to evaluate your ‘creditworthiness’ and likelihood of repayment.

When a lender is processing your loan application, they will typically run a credit check by accessing your score through one of the main credit reference agencies of Experian, Equifax and Call Credit. At The One Stop Money Shop, we work with Equifax to run our data checks.

How a credit score works 

A credit score is a number formulated on how well you have paid other forms of credit in the past such as credit cards, personal loans, payday loans and other factors too.

Credit scores from Experian can be broken down into five categories; very poor (0 – 560), poor (561 – 720), fair (721 – 880), good (881 – 960) and excellent (961 – 999).

The more loans that you repay on time, the higher your credit score will be. But if you fail to repay your loans and other debts on time, you will have a lower credit score.

Your score can constantly go up and down based on how well you repay your debts. So if you have a bad credit score, this can always improve. But if you have a good credit score, you will need to keep repaying on time to maintain your high score.

Credit score is key to approval

Those individuals with higher credit scores tend to have a better chance of approval for financial products, such as loans. This is because they are deemed a lower risk by the lender and there is a better probability of the customer paying on time. This is not always the case, however, since someone could have a good credit score but still have a lot of loans open or debt outstanding – and this is where good underwriting comes into place.

If you have a bad credit rating, you are less likely to be approved for mainstreams loans and financial products. Your eligibility will usually require additional security such as having a guarantor, putting down something as collateral or paying a significantly higher interest rate to mitigate the risk of default. Since your credit score is so important, we explain how you can improve it below and why it is relevant to applying for loans too.

Check your credit file 

Firstly, let’s understand what your current score is and what scope there is for improvement. To access your score, there are 14-day free trials available from the likes of Experian, ClearScore and Noddle so that you can log in, see your score and see what factors are impacting it. The Government also offer a £2 statutory credit report, that allows you to see your current credit file and score.

Beyond this, if you are passionate about improving your credit score, you should continue to check it regularly. Each time you make a repayment on time or pay off a credit card debt, you should monitor your score closely to see how you are improving.

Join the electoral roll 

By registering to vote with your local authorities, you are confirming your name, age and address and this is considering a good trust signal. For potential creditors, it gives peace of mind knowing that you are a real person and with a real residence. You do not necessary have to vote in the upcoming elections if you do not want to, but it is a good place to start building your score. You can join the electoral register here.

What is the effect of this? 

Joining the electoral roll will not magically turn a bad credit score into a good one. However, it is a good thing to have if you are serious about your financial prospects and particularly for young people who are starting fresh with no credit score, it can be a good starting point.

Avoid making too many loan applications 

For those actively looking for short term loans, they might consider making numerous application online with different lenders, in an attempt to improve their chances of approval. However, this comes with caution, since making too many applications in a short space of time can send a warning to potential lenders of someone that is financially stretched and desperate for finance. This is shown on your credit file by ‘search footprints’ which are recorded every time a lender or provider runs a credit check on you. So having too many search footprints in short space of time, is not advisable.

What is the effect of this?

By having too many search footprints, you can seem unattractive to most lenders. It is normal to have around 12 search footprints at any time, but any more is deemed excessive. You should try avoid using online loan brokers because this could trigger multiple searches at once. Either way, credit searches will disappear from your file will after 12 months.

Remove any credit cards and store cards you do not use 

It is very easy to sign up to new credit cards and store cards from our favourite retailers and supermarket chains. However, having too many credit cards means that you potentially have access to thousands of pounds, which you may or may not use. For most lenders, they are likely to be more cautious if you have numerous cards open, because the repayment of these cards could be prioritised over their loan instead – and someone who has access to an extra £10,000 could have too many outgoings to repay their short term loan on time.

What is the effect of this?

Removing any unused credit cards or store cards will have a positive effect on your credit rating. However, you must not just cut up the card, you will need to contact the provider and physically close the account.

Disassociate from people with bad credit

We may regularly set up joint accounts with parents, siblings or spouses – whether it is current accounts or mortgages. But having a joint account with someone with bad credit, does not look favourably on you. The notion of a joint account assumes that you share financial responsibility or are willing to help your partner if they fall behind on repayments. This can achieve to lower your credit score or impact your chances of approval for mainstream finance.

What effect does this have?

Being associated with someone with a very bad credit history, IVAs or CCJs can have a negative impact on your own credit rating by being guilty of association. Removing yourself from any joint financial obligations will achieve to better your score and financial position significantly.

Rebuilder credit cards and products 

For this with bad credit histories, you can use rebuilder cards to improve your score. This is where you use a credit card and borrow a small amount, at a high interest rate, and get into the rhythm of paying it off on time. Every time you make a payment as scheduled, the information is fed back to one of the credit reference agencies and updates that you are good at making payments.

What effect does it have?  

Using rebuilder credit cards can successfully build up your credit score. Over time, you will need to keep making payments on time for other financial products. But this approach can effectively take a bad credit rating and make it an average or good credit score over several months or years.

Pay bills on time 

Leaving the most important until last, individuals are encouraged to repay any outstanding bills on time. This includes credit card repayments, loans, mobile phone bills, utility bills and more. Every time you are repaying a debt on-time, you are either improving or maintaining your credit score and also saving money too, but not paying any late fees, default charges or having to pay more for credit in the future.

If you are ever behind on your payments, try speak to the provider beforehand and explain your situation. If you are a good customer, they will be able to assist with lower payments, payment holidays or reduce any late fees.

What effect does this have?

Making repayments on time is the most important thing you can do to boost your credit score. It demonstrates trust and an ability to make payments on time, and this is exactly what your credit score aims to determine.

To conclude, if you can follow the tips outlined by The One Stop Money Shop and prioritise regularly checking your credit file and keeping up with repayments, you will be on track to having a strong credit rating and a life of sound financial freedom.