Salary Finance is a lender with a social purpose: it partners with progressive employers in the public and private sectors to offer employees a range of salary-linked benefits designed to improve their financial wellbeing and to help them save and borrow sensibly.
Repayments on its low-interest, fixed-rate loan are taken directly from employees' salary, along with any savings deposits they wish to make. Since 2016, Salary Finance has disbursed more than £35 million in loans to 12,800+ employees and its unique repayment method has saved them £8.5 million in interest payments.
Payroll-Linked Loan Repayments
Rather than working with slow and complex legacy banking systems, Salary Finance wanted to deliver “on time, every time” payroll-linked loan repayments, which meant replacing batch payment processes with a more flexible and automated payment service so it could pay out loans whenever it wants, 24/7. It also wanted to replace manual and error-prone processes with a quicker more automated solution for reconciling loan repayments.
Faster Pay Outs and Easier Reconciliation
Modulr, a fast, reliable alternative to banks for corporate payments, enables Salary Finance to send and receive payments in real-time, 24/7. Its API platform plugs into Salary Finance’s existing systems, replacing manual batch payment file processes with automated pay outs via Faster Payments.
Modulr’s platform gives Salary Finance easy access to Faster Payments, which means it can disburse loans in seconds. Salary Finance can also automatically deduct interest repayments, reducing manual account intervention.
Salary Finance can instantly create an unlimited number of customer accounts, with their own unique sort code and account number, which can be issued to each client to make reconciling loan repayments quick and simple.
Simplicity, clarity and speed to market
Modulr plays a critical role in reducing administrative overheads, payment delays, high bank fees and errors for Salary Finance. The lender is also able to maintain better visibility of cash flows, while delivering automated real-time reconciliation and seamless onward payments.
Salary Finance can subsequently reduce costs, provide a low-friction experience and distribute more loans to more people at a lower rate.
Working with Modulr, Salary Finance saves employees £600 in interest payments on an average £3,100 loan. Its first-to-market payroll-linked Savings Solution (recognised as the 2018 Benefits Innovation of the Year), enabled by Modulr’s API, then allows individuals to start saving once they have paid off their loan.