Buy Now Pay Later provider Zilch has introduced a new cash advance feature allowing eligible customers to borrow up to £100 before payday. Consumer groups warn that repeated use could create financial pressure for people already struggling with everyday costs.
New Advance Feature Allows Early Access to Money
The new Zilch Advance service allows eligible users to receive up to £100 up to seven days before their salary arrives. The money is transferred directly to the customer’s bank account and must be repaid on payday. While no interest is charged, users pay a £3 transfer fee each time they use the service.
The feature differs from Zilch’s traditional Buy Now Pay Later model, which allows customers to spread payments for purchases through a virtual card. Advance is available only to customers who have Zilch Extra, a subscription service costing £2.99 per month, and who pass affordability checks.
Consumer Groups Raise Concerns Over Repeat Use
Financial experts have warned that short-term access to money before payday could become a recurring habit for some users. Debt adviser Sara Williams, known online as @debtcamel, said the service could be useful for customers facing a temporary cash shortage, but warned that some people may repeatedly borrow the same amount each month and struggle to break the cycle.
Consumer champion Martyn James said to The Sun that while interest-free access to money could appear helpful, it may only delay financial pressure rather than solve underlying difficulties. He argued that people facing long-term financial problems need support that helps them reduce debt rather than rely on repeated borrowing.
Zilch Says Customers Must Pass Affordability Checks
Zilch said customers can only use Advance if they have an available credit limit based on affordability assessments. The company said the feature allows users to access credit they have already been approved for and that income checks through open banking are used to assess whether customers can repay the amount on time.
The lender added that customers must be up to date with existing payments before they can access Advance and that missed repayments are handled through existing support processes. Zilch said it does not charge late fees or missed payment charges.
Experts Highlight Wider Debt Concerns
Debt charity StepChange said salary advance products can provide an alternative to more expensive forms of borrowing if they are designed responsibly. However, the organisation warned that these services may create risks if people experiencing financial difficulties begin depending on them regularly.
StepChange said financial pressure continues to affect many households, with 63% of its clients now in work, either full-time or part-time. The charity also identified the cost of living as one of the main causes of problem debt.
The launch of Zilch Advance reflects the growing development of short-term financial products designed to give consumers faster access to cash. The debate around the service highlights concerns over how these tools should balance convenience with the risk of increasing reliance on credit.
