7 Ethical UK Loan Providers that Support Borrowers
If you’re living paycheck to paycheck and need a way out to manage your finances better temporarily, you can always consider borrowing. However, it’s important to choose the right lender as much as it's important to choose the right type of credit.
This can make a huge difference in your borrowing experience, especially if you’re a low-income employee, have an unsteady source of income or poor credit. Your best bet is to find an ethical lender who can support your financial needs without compromising your future financial security.
So how do ethical lenders differ from traditional lenders? Ethical loan providers are led by principles of fairness and transparency and offer affordable credit. They’re committed to responsible lending practices that prioritise your financial well-being and offer loans to those who are often excluded by traditional lenders.
Why Choose an Ethical Lender
Choosing an ethical lender in the current economic climate comes with a variety of benefits. This includes competitive rates, affordability-focused lending, full transparency on terms and conditions, flexible repayment terms and more.
This allows borrowers to understand the true cost of their loan and avoid any unpleasant surprises. You know exactly what you’re signing up for, which helps you make an informed borrowing decision. It also allows you to budget wisely and plan for repayments, minimising your loan burden and potential debt.
Ethical lenders often go beyond standard lending algorithms and credit scores to offer you credit that is tailored to your financial needs. So even if you have bad credit, you’re more likely to find a suitable credit option with an ethical lender than with a traditional lending institution like a bank.
Borrowing from an ethical lender is particularly helpful if you’re looking for a short-term loan. Short-term loans typically come with high-interest rates, but ethical lenders offer safer, more affordable options.
Now that you know why ethical lenders are the go-to choice for borrowers, consider choosing an ethical lender when you need to borrow next. To make it easier for you, we present a curated list of ethical loan providers in the UK that offer loans designed to support borrowers.
Let’s dive in.
1. Salad
Ethical lenders like Salad are a great choice for those with less-than-ideal credit scores, a thin credit file or those with complex financial needs. They prioritise community welfare and offer small, affordable loans with flexible repayment terms.
Salad is committed to responsible lending practices and is one of the first FCA-authorised independent lenders to officially receive an open banking licence. They use open banking data to make their affordability assessments. This allows them to offer you credit based on your current financial situation and capacity rather than your past mistakes.
They go beyond credit scores and tailor their loans to meet your financial needs. Salad’s ethical loans and other short-term personal loans have lower interest rates compared to many other payday lenders. They offer transparent pricing and give you a calculation tool on their website so that you can see the true cost of your loan yourself. There are no hidden fees or charges for you to worry about.
Their loan amounts typically vary between £300 to £2,000, with clear, fixed repayment terms of 6 to 24 months. They have a quick and hassle-free application process, and if approved, you could receive your funds on the same day as you make your loan application. This makes them ideal for borrowing during a financial emergency like an urgent home repair, footing a vet bill or any other unforeseen expense.
Why Choose Salad
- FCA Regulated
- No hidden charges - fixed rates, transparent pricing
- Open banking data used for affordability assessments
- Quick and easy application process
- Inclusive credit options to suit your financial needs
- Focused on low-income earners and promotes financial inclusion
Here’s an amazing review of Salad from Bisola:
“The whole process was seamless and swift. I got approved in no time, and the money was in my account in no time. It felt like a dream. I had to pinch myself. I had a great experience and will definitely recommend them. They were definitely a lifeline to my deadline.“
2. QuidMarket
Based out of Nottingham, QuidMarket is an ethical loan provider of short-term loans. Since their founding in 2011, they’ve received over 9000 TrustPilot reviews, with the general feedback being largely positive. They offer loans based on affordability rather than on credit scores, making their credit options inclusive and accessible for those with bad credit.
They pride themselves on their humane approach and have all their applications reviewed manually and not by bots. This has helped them establish trustworthy relationships with borrowers, with lending decisions being led by empathy and the borrower’s financial welfare.
QuidMarket offers loans typically in the range of £300 to £1,500 and has flexible repayment periods from 3 to 6 months. They offer quick, same-day funding as soon as you’re approved, making them ideal for a financial emergency. For qualified borrowers, QuidMarket’s credit options offer unmatched transparency and flexibility compared to other high-cost loan options available on the market.
3. Lending Stream
Founded in 2008, Lending Stream has been around for over 2 decades and has established itself as a reliable provider of ethical short-term loans. They’re known for being efficient, quick and flexible, catering to borrowers with a wide range of credit profiles, including those with less-than-ideal credit scores.
Their short-term loans are relatively costly when compared to credit unions and have a representative APR of 1,271%. Lending Stream advises its customers to only borrow what’s required and encourages responsible borrowing. For their part, they do carry out affordability assessments to limit borrowing risks.
They offer new customers loan amounts of £50–£800, whereas existing customers can borrow up to £1,500. Their repayment terms range from 6 months to a year. This allows borrowers to make repayments comfortably, unlike a one-time lump sum payment for a payday loan.
4. LoanPig
LoanPig is an FCA-authorised ethical direct lender that also sometimes functions as a credit broker, partnering borrowers with suitable lenders. They do not charge borrowers any upfront fees so that customers can borrow with confidence and ease. They offer short-term loans, payday loans and no-guarantor loans depending on your financial requirements.
They provide a hassle-free, quick service online where you can use their loan calculator on their website and make your application. If they’re unable to offer you a loan directly, they’ll partner you with an ethical lender who can.
LoanPig carries out thorough affordability and bad credit checks so that you can borrow and repay your loan comfortably. You can borrow up to £1,500 with 12-month terms. Their personalised service ensures you have a smooth borrowing experience from start to finish.
5. CashASAP
CashASAP is an FCA-authorised ethical direct lender that provides payday loans as well as instalment loans. They offer short-term loans with no hidden costs, and qualified borrowers can access funds once approved within a matter of minutes. Their services are available 24/7, including on bank holidays and weekends, which makes them suitable for emergencies.
They disclose rollover fees and ensure full transparency for their credit options. Borrowers can receive interest rebates on early loan settlements, too. For first-time borrowers, they offer loan amounts between £200 to £300, while returning customers can apply for up to £750.
CashASAP has received positive reviews on TrustPilot and is praised for its reliable credit options and round-the-clock support. Even though their representative APRs are high, approximately 1,265.8%, their transparency and 24/7 availability make them a popular choice with borrowers.
6. Drafty
Drafty is an ethical loan provider of payday loans, founded in 2016. They’re authorised by the FCA and offer a fixed as well as a flexible line of credit. With over 10,000 reviews on TrustPilot, borrowers have positive feedback on Drafty’s credit products and services.
Drafty uses soft credit checks as part of their affordability assessments, but this won’t impact your credit score. Their service is quick, fast and easy, where qualified borrowers can access funds within a matter of seconds.
You can borrow £1,000–£3,000 for a period of 12, 18, or 24 months, making their repayment plans flexible and simple. Their representative APR is typically around 79.9% (variable) for fixed personal loans, whereas their APR for their flex line of credit is around 96.2%.
7. Fair for You (CDFI)
Fair for You is a not‑for‑profit Community Development Financial Institution (CDFI) and social lender, owned by Fair Credit Charity. Founded and operating since 2015, they provide affordable credit for financially marginalised families to purchase household items. They offer fair terms and are led by their mission motto, “to change lives through better lending”.
As of 2024, they’ve helped over 100,000 people with loans for household essentials. They have proven themselves to be a reliable and ethical alternative to high-cost credit. First-time borrowers can apply for up to £600 and repay it in instalments weekly, fortnightly, monthly or four‑weekly.
With a mission-driven approach, Fair for You has received positive reviews on Trustpilot. Borrowers trust them for their compassionate and trustworthy credit services that are willing to help those in need.
Summing Up
Ethical loan providers are transforming the lending market with their humane approach. They endorse responsible lending practices to limit borrower risks and boost their financial resilience. This is expected to help individuals borrow with greater confidence and trust, especially those who have always struggled with finding the right credit due to poor credit scores.
We hope our guide on ethical loan providers in the UK is helpful on your borrowing journey.
