Dot Dot Loans From £100 – £5,000

Updated: September 27, 2024 Author:

Dot Dot Loans was a well-known provider of short-term, instalment loans in the UK, offering credit options to individuals with less-than-perfect credit scores.

Dot Dot Loans ceased trading in 2023, leaving many borrowers wondering what this means for them.

Who Were Dot Dot Loans?

Dot Dot Loans was operated by Shelby Finance, a subsidiary of Morses Club. Launched in 2017, it positioned itself as a responsible lender, offering instalment loans of up to £4,000 over varying terms.

The company aimed to provide a flexible borrowing option for individuals who might struggle to get approval from mainstream lenders due to their credit history.

Unlike payday loans, which often needed to be repaid in a single lump sum, Dot Dot Loans offered customers the ability to repay in monthly instalments over periods ranging from 3 to 48 months.

This approach made the loans slightly more manageable for those looking to borrow relatively small amounts, particularly in emergencies.

Dot Dot Loans also emphasised transparency, claiming there were no hidden fees or charges, and it provided customers with clear repayment schedules from the start.

Despite these efforts, like many lenders in the high-cost short-term credit (HCSTC) market, the company faced increased scrutiny due to its high interest rates, which were common in this sector.

Why Did Dot Dot Loans Stop Trading?

Dot Dot Loans stopped trading in 2023, following years of financial difficulties and increased regulatory pressure on high-cost lenders.

The Financial Conduct Authority (FCA), which regulates the consumer credit industry in the UK, has been cracking down on lenders who fail to meet strict guidelines regarding affordability checks, treatment of customers, and interest rate caps.

The HCSTC market has seen a wave of closures in recent years, with many firms unable to keep up with compensation claims from customers who felt they had been mis-sold loans or subjected to unfair lending practices.

Dot Dot Loans, like many other lenders in this space, likely faced significant financial pressure as a result of these claims.

Though Dot Dot Loans had worked to maintain its reputation as a responsible lender, the broader economic challenges, coupled with regulatory scrutiny, contributed to its downfall.

Morses Club, the parent company, had also faced challenges in its home credit division, further compounding the financial strain.

What Happens if You Had a Loan With Dot Dot Loans?

If you were an existing customer of Dot Dot Loans, you might be concerned about what the closure means for your loan. Here’s what you need to know:

1. Existing Loans Must Still Be Repaid

Even though Dot Dot Loans is no longer lending, any outstanding loans must still be repaid according to the terms of your agreement.

When a lender ceases trading, the loans are typically managed by a third party, such as an administrator or another financial institution that takes over the loan book.

You should continue to make your repayments as usual, and failure to do so could impact your credit score or result in additional fees.

You should have received communication from Dot Dot Loans or the company handling their affairs, explaining how to continue making payments.

If you’re unsure, it’s crucial to get in touch with the lender or administrator as soon as possible.

2. You Can Still Complain

If you believe Dot Dot Loans mis-sold you a loan or failed to carry out proper affordability checks, you can still make a complaint.

Even though the company has stopped trading, they are still responsible for addressing customer complaints.

Start by contacting Dot Dot Loans or the administrator handling complaints.

If you’re not satisfied with their response, you can escalate your complaint to the Financial Ombudsman Service (FOS).

It’s important to note that you have six years from the date of the loan or three years from when you realised you had grounds for complaint to raise an issue.

3. You Might Be Eligible for Compensation

In some cases, customers may be entitled to compensation if they can prove that Dot Dot Loans did not follow proper lending practices.

This could include failing to carry out sufficient affordability checks or lending to someone in financial difficulty.

If you believe you were affected, it’s worth pursuing a complaint to see if you’re eligible for a refund or compensation.

Since Dot Dot Loans is no longer trading, the process of receiving compensation could be slower, especially if the company has entered administration.

What Should Borrowers Do Next?

If Dot Dot Loans’ closure has left you uncertain about your borrowing options or how to manage your existing loan, here are a few steps you can take:

1. Contact the Administrator

First, if you have any outstanding debt with Dot Dot Loans, it’s important to stay in contact with the administrator or the company that’s managing your loan.

They will be able to provide up-to-date information on your repayment schedule and how to manage your account going forward.

2. Seek Financial Advice

If you’re struggling with repayments or worried about your financial situation, it may be worth seeking advice from a debt charity or organisation.

Groups like StepChange, Citizens Advice, or the National Debtline can provide free and impartial advice on how to manage debt, negotiate with creditors, and explore other options such as debt consolidation.

3. Explore Other Lending Options

If you were planning to borrow from Dot Dot Loans but now find yourself without a lender, there are alternative options available, even if you have bad credit.

While it’s important to approach borrowing cautiously, especially if you have a poor credit history, some lenders specialise in offering credit to those who may not qualify for mainstream loans.

Here are a few options to consider:

  • Credit Unions: Credit unions are community-based organisations that offer loans at lower interest rates than most high-cost lenders. You may need to become a member first, but they are a good alternative for those with bad credit.
  • Bad Credit Personal Loans: Some lenders specialise in personal loans for people with poor credit. These loans tend to have higher interest rates, so it’s important to ensure you can afford the repayments.
  • Guarantor Loans: If your credit score prevents you from borrowing on your own, a guarantor loan allows a friend or family member to co-sign the loan with you, agreeing to cover payments if you’re unable to do so.
  • Secured Loans: If you own a property or another high-value asset, you may be able to secure a loan against it. However, this comes with the risk of losing your asset if you can’t make repayments.

4. Work on Improving Your Credit Score

If you find it difficult to get approved for loans due to your credit score, consider taking steps to improve it.

This could include making sure you’re on the electoral roll, paying your bills on time, and checking your credit report for any errors.

Conclusion

The closure of Dot Dot Loans is another sign of the challenges facing the high-cost lending sector.

While this may cause uncertainty for existing customers, it’s important to stay informed about your rights and obligations.

Whether you’re repaying an outstanding loan or looking for alternative borrowing options, taking the right steps now can help you manage your financial situation more effectively.

If in doubt, seek professional financial advice to ensure you’re on the right path.