Txtloan provides instant short term loans through mobile phone

Mobile phone

A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...

 text messaging

Text messaging

Text messaging, or texting, refers to the exchange of brief written text messages between fixed-line phone or mobile phone and fixed or portable devices over a network...

. The service is marketed as a convenient alternative to payday loan

Payday loan

A payday loan is a small, short-term loan that is intended to cover a borrower's expenses until his or her next payday. The loans are also sometimes referred to as cash advances, though that term can also refer to cash provided against a prearranged line of credit such as a credit card...

s and to unauthorised bank overdrafts and associated penalty charges, although The Guardian

The Guardian

The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...

called it "a hi-tech version of the 'payday loan'".

How it works: Customers apply online. Once approved and registered (if meeting certain conditions, similar to many UK payday loans

Payday loans in the United Kingdom

Payday loans in the United Kingdom are a rapidly growing industry, with four times as many people using such loans in 2009 compared to 2006 - in 2009 1.2 million people took out 4.1 million loans, with total lending amounting to £1.2 billion. The average loan size is around £300, and two-thirds of...

), they are given a PIN

Personal identification number

A personal identification number is a secret numeric password shared between a user and a system that can be used to authenticate the user to the system. Typically, the user is required to provide a non-confidential user identifier or token and a confidential PIN to gain access to the system...

 which they can use to text the company to borrow money. The cash is then transferred into their bank account, typically within minutes.

Txtloan has been criticized in the mainstream media by the BBC

BBC

The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...

, The Guardian

The Guardian

The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...

, The Independent on Sunday, The Daily Telegraph

The Daily Telegraph

The Daily Telegraph is a daily morning broadsheet newspaper distributed throughout the United Kingdom and internationally. The newspaper was founded by Arthur B...

 and The Independent

The Independent

The Independent is a British national morning newspaper published in London by Independent Print Limited, owned by Alexander Lebedev since 2010. It is nicknamed the Indy, while the Sunday edition, The Independent on Sunday, is the Sindy. Launched in 1986, it is one of the youngest UK national daily...

. Their annual interest rate is 414% with representative APR% of 4474%, although the company states that use of representative APR in calculating the cost of short term loans is confusing and states it is a responsible lender and not a long term credit

Credit (finance)

Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...

provider. The company's £100 loans are intended for repayment after 15 days; failure to repay on time sends the amount due to £200 by day 45 prior it will be passed to debt collection.