Monzo starts offering loans to current account customers
App-only bank Monzo has started offering loans to all its current account customers following a trial with about 4,000 users over the past nine months.
Eligible Monzo accountholders can now borrow between £200 and £15,000 for up to 60 months.
The bank is offering rates from 3.7 per cent APR representative on loans of £7,500 to £15,000. Smaller loans up to £7,500 are charged at a higher interest rate – typically 20.4 per cent APR.
These rates are “representative” rates – the rate Monzo expects to offer to at least 51 per cent of successful applicants. Users can apply for a personalised quote which will show the interest rate and cost in pounds before making an application.
Monzo said: “We want to fix problems across the industry, like the general lack of transparency, confusing terms and pricing, and business models seemingly designed to catch customers out. Here’s how we’re trying to do things differently.
“We’ve built systems that check if you can borrow money from us, and how much we can responsibly lend you. Behind the scenes, we match our data with that from credit agencies to see if we can offer you a loan.
“So before you apply, you’ll get a personalised interest rate and see what that means in pounds, without leaving a mark on your credit file.”
Monzo said it won’t charge borrowers extra fees if they make extra repayments or pay off their loan early.
Monzo launched overdrafts to customers in April 2018, charging 50p per day on up to £1,000. It upped the rates on its “Savings Pots” earlier this month.