Your LOQBOX questions

How does LOQBOX work?

With LOQBOX, you build your credit history, improve your financial management and grow your savings – all at the same time… for free.

Here is a step-by-step explanation of how LOQBOX works with an example…

Firstly, you select how much money you want to save each month – your monthly savings payments. You are then allocated a LOQBOX, a digital voucher that costs one year of your monthly savings payments.

Your LOQBOX:

  • Is always worth its purchase price because we promise to redeem it in cash, for the same amount you bought it for, whenever you want
  • Gives you access to our financial educational programme
  • Gives you access to exclusive savings and credit offers

EXAMPLE: John Smith wants to save £100 per month for a year. This means he will save 12 x £100 = £1,200 over the full year. So we set up a LOQBOX worth £1,200.

Now you’ve selected the value of your LOQBOX, you can use 12-month interest-free finance from our sister finance company, DDC Financial Solutions, to buy it. This transforms your monthly savings payments into finance repayments which means that each payment builds your credit history, showing future lenders that you can responsibly manage finance.

EXAMPLE: DDC Financial Solutions provides John with finance of £1,200 to buy his LOQBOX. Just like buying a car, John does not receive the money from the finance into his bank account. This is paid by DDC Financial Solutions direct to us. As John chose to save £100 per month over the year, his finance repayments are £100 per month for 12 months.

Each monthly repayment reduces your finance balance. As your finance balance reduces, the amount you would receive from unlocking your LOQBOX increases by the same amount. We automatically transfer your LOQBOX Funds monthly into our ring fenced, independently verified, client account with Barclays Bank. Your LOQBOX funds in this account are protected by the Financial Services Compensation Scheme (“FSCS”) up to £85,000. Whenever you want, you can unlock your LOQBOX to redeem your savings. The first part of the redeemed funds is used to settle any outstanding balance on your finance before we return every penny of your savings to you.

EXAMPLE: John now owns his £1,200 LOQBOX which he can unlock at any time for the full value of £1,200. He also owes DDC Financial Solutions finance of £1,200 which he will repay at £100 per month. When he unlocks his LOQBOX, he gets back the full value of the LOQBOX, less any outstanding balance on the finance due to DDC Financial Solutions.

At the end of the year, or sooner if you choose, you can unlock or redeem your LOQBOX for its full value. If you unlock at the end of the year, your finance will have been fully repaid so the full amount of the LOQBOX is yours. If you unlock before a full year has passed, the outstanding balance on your finance is automatically settled and the remainder, equal to the total of all your payments so far, is yours. It’s all set up so that you always get back your savings when you unlock.

EXAMPLE: As John makes his monthly payments of £100 per month, the balance of his finance reduces by £100 each time. Each month, this data is reported to the credit reference agencies to help other lenders see that John is a responsible borrower who can manage monthly payments.

If John unlocks his LOQBOX after making all 12 finance repayments, he will receive the full £1,200 that he has saved.

If he unlocks his LOQBOX before a year has passed, he will receive £1,200 minus any outstanding balance on his finance from DDC Financial Solutions.

So, if he unlocked his LOQBOX after making 4 payments of £100:

His outstanding finance balance would be £1,200 less 4 monthly payments of £100 = £800

He would receive his LOQBOX proceeds of £1,200 less the outstanding finance balance of £800 = £400, exactly the same amount as he has paid.

We know that almost all savers are less likely to touch their savings if they keep them separate from their day-to-day funds. We also know that almost everyone would like to continue saving once they have started. For these reasons, when you unlock your LOQBOX, we help you to find a way to continue your saving habit. This might be by opening a free new bank account or it might be by taking an ISA or other savings solution. When you unlock your LOQBOX, we present a selection of these different ways for your redeemed LOQBOX proceeds to be paid back to you. When you select one of these options, we get paid by our partners which is why LOQBOX is free for you. Once you have selected the option that is right for you and your new account is open or your ISA has been set up, your money is transferred straight away.

EXAMPLE: After 12 months, John unlocks his LOQBOX. He chooses to open a new bank account with one of our partner banks. As soon as his account is open, we pay his LOQBOX proceeds of £1,200 into this account.

How much will my credit score increase?

We can’t tell you how much your credit score will increase as there are many factors that affect this. It’s important to remember that future lenders do not look at your credit score, they look at your credit history and by making the payments each month to your LOQBOX you are proving you can manage your money, making your more creditworthy.

Is LOQBOX really free?

There are no fees for using LOQBOX. LOQBOX is designed to work in conjunction with the opening of a new account.

When we were designing LOQBOX, our research told us that almost everyone would like to continue saving once they have started and would be less likely to touch their savings if they keep them separate from their day-to-day funds. So, opening a free new bank account or taking an ISA will help you to protect your LOQBOX savings and continue your saving habit. It’s also how we get paid.

When you open a free new bank account or take an ISA, we get paid by our partners. This is how we can make LOQBOX free for you. The accounts on offer range from simple current accounts to investment ISAs. They can be opened online and normally in only a few minutes. Once your LOQBOX funds are in your new account you can, of course, withdraw and spend them, although we hope you’ll carry on saving.

We have created an optional premium add-on to LOQBOX. This is called Flexi Unlock and allows you to redeem your funds to an existing bank account at the end of your LOQBOX. This premium add-on costs £30. The reason there is a cost for this is because we don’t get paid by a partner bank if the user does not open a new savings, and therefore we charge to cover the costs we have incurred. This option is not required if the user opens a new savings account with our partner banks

How safe is the money in LOQBOX

LOQBOX funds are held in a ring-fenced client account with our bank – Barclays.

By holding the funds in a ring-fenced client account, the money there is protected in the event of our insolvency. This means that the funds could not be taken by our creditors.

Because the account is a designated client account, each individual LOQBOX users’ funds are individually protected under FSCS in the event of the bank’s insolvency.

How do I cancel/unlock?

If you want to close your LOQBOX you just need to unlock it.

Unlocking your LOQBOX is easy. Just sign into your LOQBOX members area at www.loqbox.co.uk and find the unlock tab on the left. From there you just follow the instructions.

If there are no funds available in the LOQBOX, your LOQBOX will be closed down and there is nothing more for you to do.

If you have funds in your LOQBOX you’ll be asked to open a new account from a list we provide. Just find the account you want to open and follow the link. It’s important that you complete the process in one go for tracking purposes.

Once you have opened a new account you can log back into LOQBOX and enter the new sort code and account number. We’ll match these with the partner bank and providing they match we’ll transfer 100% of your LOQBOX funds into your new account.

If the details don’t match we won’t be able to make the transfer which will delay your unlocking considerably.

If you don’t want to open a new account we can repay the LOQBOX funds into your existing account by adding Flexi Unlock, our premium add-on that costs £30.

Can I restart my LOQBOX?

I’m afraid the unlocking is final.  When you click to confirm you want to unlock (the second confirmation button) we redeem the voucher instantly and settle the finance with the finance company. Once that’s been done we can’t reverse it.

You’ll need to complete the unlocking process and then if you want to carry on with LOQBOX re-sign up for a new LOQBOX.

I’ve received an email saying my direct debit has been cancelled, why is this?

This email is automatically sent when your LOQBOX has been unlocked.  This may be when you reach the end of your 12 month LOQBOX term or it may be when the LOQBOX has been unlocked early.

Is LOQBOX a loan?

No.  LOQBOX is a digital, cash redeemable savings voucher.

The finance element is a loan that is provided by our sister finance company, DDC Financial Solutions Limited, to enable you to buy the lOQBOX.  The finance is transferred from the finance company to LOQBOX on your behalf when you buy the LOQBOX.

Which banks do you work with?

The banks we work with can change at anytime as new and better account options come on to the market.

At the moment if you unlocked you would be able to open a range of free accounts from the likes of TSB, RBS, NatWest, Shepherds Friendly, Pockit and more.

 

Which credit reference agencies do you report to?

Our data is reported to Experian, Equifax and CallCredit

 

Why is my last payment not showing when I redeem?

It usually takes three working days from when a payment is taken from your account to when it shows in your LOQBOX. If you unlock whilst this payment is still processing, this payment will be returned to the account it was taken from. Please allow up to 4 working days to receive this back as we have to wait for the payment to complete to us before we can return it.

What payment method do you accept?

At present we only accept Direct Debit.

How long does it take for a credit score to increase?

In terms of how long it takes for LOQBOX to improve your creditworthiness, we usually say you should be using LOQBOX for 6 months + to see a substantial increase. As there are many factors that impact your credit history and worthiness, LOQBOX will not be the only thing having an impact. Our LOQBOX Learn emails will help you manage other factors, so do take a minute to read through these.

Can I have more than one LOQBOX?

We don’t recommend you have more than one LOQBOX at a time.

Because a LOQBOX is financed, it can have a negative impact taking out more credit whilst trying to build a good credit history.

Does paying more have a different impact on my credit score?

How much you manage makes a difference to your credit history as future lenders will use this information as part of their assessment of your creditworthiness. This means that they will look at how well you have managed credit in the past as an indicator of your ability to manage credit going forward.

Depending on what sort of credit you are applying for the value of your past borrowings will have an impact. For example, demonstrating an ability to manage £20 per month is very different from demonstrating a history of managing £200 per month. Each lender will assess this information differently based on the credit product you are applying for at the time.

The most important factor though is that the repayments are affordable every month, even if you have a financial emergency. Missing a payment will have a negative impact on your credit history. therefore it’s important that you don’t overstretch yourself each month.

Do you have an app?

We don’t have an app at the moment, but we are working on it!

As soon as we have launched an app, we will let all our users know.

Information on my credit report is wrong

If you think information regarding your LOQBOX is wrong please get in touch with support.

My LOQBOX isn’t visible on my credit report?

The reporting of your loan data to the three credit reference agencies (Experian, Equifax and CallCredit) is always a little delayed at the start.

We report all data on the 18th of each month for activity in the previous month. So, a payment taken in January, for example, would be reported on the 18th February.

We have seen it take up to 90 days for the first record to be created on a credit report, although it often happens much faster than that.

Please make sure you are checking for DDC Financial Solutions Limited and not LOQBOX on your credit report. This is because the data is reported by the finance company DDC and not LOQBOX.

When will first payment be reported?

The reporting of your loan data to the three credit reference agencies (Experian, Equifax and CallCredit) is always a little delayed at the start.

Let me explain how it works.

We report all data on the 18th of each month for activity in the previous month. So, a payment taken in January, for example, would be reported on the 18th of February.

Because of this delay, it can often take a while for the first payment to be reported.

When we report the first payment, this establishes the loan record on your credit report.

Once we have submitted the data in a report to each CRA, it usually takes them about 20 days to validate the report and add the data to the relevant credit records for all of our users.

Once the record is on your report it should be visible the next time your credit report refreshes. This is important. When you check your credit report you are often not looking at a live copy of your report. Instead, you are viewing a snapshot that is usually collected once a month. If you check the report you should see the ‘report date’, this will tell you when the report was created.

When will I receive my payment?

We make LOQBOX payments on working days.

Once a user has entered the details for their redemption payment we add the details to a payment sheet. This is then processed on the next working day. Payments can take 1 – 3 days to arrive in your bank account.

I can’t make this months payment?

If you miss a payment you will be able to pay it at any point during the remaining months of your LOQBOX, however, if we don’t receive the payment before the 15th of the month following the month the payment was due it will be reported as missed. The only way to avoid the missed payment being reported if you can’t pay before this date is to unlock your LOQBOX.

How do I pay arrears? How do I pay a missed payment?

We automatically attempt the payment twice. Once both payment attempts by Direct Debit have failed, you can log into your LOQBOX and authorise us to collect the payment. Once you have logged in, you will see a button at the bottom of your payment history saying “Make arrears payment”. Please click this to authorise us to collect your missed payment. Once you’ve clicked this, the status on your missed payment will change to “Awaiting arrears payment”.

Can I pay weekly or four weekly?

No. Payment must be taken on the same date each month. This date can be any date between 1 – 28th of each month and is set when you sign up to LOQBOX.

What is my payment date?

You can find your payment date at anytime within your members area. Just log in at www.loqbox.co.uk and within your payment history table you will see your payment date.

Please note, at present this date can not be changed.

A payment has been taken after I unlocked my LOQBOX

This can occasionally happen when you unlock your LOQBOX very close to the payment due date.

Because of the way Direct Debit works we need to request the payment three working days prior to the payment date. We do this by sending an instruction to your bank to collect the payment from you and pay us. However, once we have done this we can’t stop the bank from making the payment, even if you unlock. We do send a note to the bank but more often than not they make the payment anyway.

If they have collected the payment from your account they will confirm and pay it to us is three working days. We will then transfer the funds back to you.

Can I pay extra into my LOQBOX?

Unfortunately, we can’t accept any additional payments towards the LOQBOX. You see, LOQBOX is a digital savings voucher, not a transactional account. Because we aren’t a bank we can’t allow transactions coming and going into the account above and beyond the original value of your specific LOQBOX.

Can I change my payment amount?

I’m afraid we can’t change the amount of the LOQBOX once it’s been started. The value is fixed at the point of sign up.

The only way to achieve this would be to close the existing LOQBOX, using the standard unlock process. Once you’ve done this you could sign up for a new LOQBOX with the new payment amount and any other changes you want to make. Please note you will need to open a new bank account with one of our partner banks to redeem your savings for free, as you would at the end of your 12-month LOQBOX. If you have not yet made your first payment, you will not need to open a new account.

Can I delay a payment?

It’s not possible to delay a LOQBOX payment as the collection of payments by Direct Debit is automated, so we can’t request that the payments are taken on any other specific day other than the one you selected when you set up your LOQBOX.

Once the payment schedule has been set the payments are fixed.

The only way to stop a payment is to unlock the LOQBOX.

Can I change my monthly payment date?

Unfortunately, it isn’t possible to change the payment date once the direct debit mandate has been set up.
We’re working on a solution at the moment that would allow you to change the payment date but at present, the direct debit system doesn’t allow it.

The only way to do this would be to do a full unlock, using the normal unlock process and then rebuy a new LOQBOX and select a different payment date. Please note you will need to open a new bank account with one of our partner banks to redeem your savings for free, as you would at the end of your 12-month LOQBOX. If you have not yet made your first payment, you will not need to open a new account.

Can I change my first payment date?

Unfortunately, it isn’t possible to change the payment date once the direct debit mandate has been set up.

We’re working on a solution at the moment that would allow you to change the payment date but at present, the direct debit system doesn’t allow it.

The only way to do this would be to do a full unlock, using the normal unlock process and then rebuy a new LOQBOX and select a different payment date. Please note you will need to open a new bank account with one of our partner banks to redeem your savings for free, as you would at the end of your 12-month LOQBOX. If you have not yet made your first payment, you will not need to open a new account.

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