I was thinking of ways to help people get out of debt and was wondering if there was any way for the Monzo app to monitor direct debit / standing orders and any recurring payments that were for credit card/loans or other finance products, the customer could (if they wanted to) add a note to each payment with the interest rate and the remaining balance of each one.
The Monzo app could then prioritise payments using the Debt Snowball method to pay off the smallest to largest debt or use the Debt Avalanche method to pay the most expensive off first.
I think there’s a lot of variables and a lot of products out there that help do that already so it might be a bit much for them to build anything too specific for the target audience any time soon.
I would have thought from their business hat it would make sense to get people to consolidate and go you have a loan here at X% and loan here at Y%, take our Monzo loan at a lower Z% and pay those higher loans off with it to save £ each month.
Good point, well made. I’m not a fan of paying off debt with debt, but you make a valid point that as a bank, Monzo would offer their own product at a lower rate.
I think the key issue at the moment Monzo are being very cautious (and random) with lending. So it’s unlikely those with existing debt can do this consolidation. I’ve seen a few people here that have saved hundreds by doing so with the rate offered to them by Monzo.