A London-based startup is on a mission to help the UK’s dependency of high cost loans. There are a number of loan options available for people who need a quick injection of funds, including logbook, payday and guarantor products which can yield interest rates from 50% to as much as 1,000% APR.

Fund Ourselves, was launched to help the 3 million Britons who depend on such high cost loans and can often find themselves in a worse financial position than when they started.

The company was founded by Nadeem Siam, a former NASA engineer who wanted to better understand the issues that consumers were having with expensive loan products, something that he calls ‘the lost wonga generation.’

Here, he refers to Wonga.com, the once very dominant short term lender that was on the verge of floating for £1 billion, before suffering the impact of regulation and a compensation bill worth over £4 billion which resulted in the company going into liquidation.

“With Fund Ourselves,” Siam explains, “We offer short term loans ranging from £100 to £1,500 for 4 to 6 months, but with no penalising structure. Of course, we have to run credit and affordability checks with each customer to ensure that they can repay their loan, but if they are struggling to repay, we will give them up to 12 months to clear their account, with no added fees or impact to their credit score.”

“The issue (with high cost loans) is that if you are struggling to repay, the fees are very high and you can get stuck into a cycle of debt which is very hard to get out of.”

“With our product, you have the flexibility to repay over time in monthly instalments, which makes it more affordable to begin with – and with no penalising, we offer an effective way to pay your debt and maintain a healthy financial position. Our goal is for customers to leave Fund Ourselves better off, not the other way around.”

Fund Ourselves is based in London Bridge, with a customer service team based in Woking, Surrey. The firm officially operates as a peer to peer lender, which matches an individual investor with a pool of their borrowers, to earn an interest rate from 5% to 15% per annum.

Investors can deposit as little as £100 and this is diversified across a number of borrowers who are looking for short term loans. The amount you can receive in interest will vary based on good credit customers (towards 5%) or bad credit customers (up to 15%). The FCSC does not cover your investment for any losses, but Fund Ourselves does include their own provision fund which puts capital aside for loan defaults and the customer service team works hard to recover any losses.

Fund Ourselves is another very promising startup which is looking to offer alternatives to high cost products. Another growing area is salary finance, which offers wages on demand for employees, directly from their employees as a free benefit in kind. It is currently popular for hospitality, food and healthcare workers, but could offer a very low-cost and effective way to help people get their money before payday and avoid being caught up in high cost loans.

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