Would Monzo think about creating a lending system like Drafty for the poor credit applicants.
For example you apply for a credit line and say your excepted for £500.
A new pot would appear in your account that you can draw from as and when needed. So if i had emergency bills i could draw £80 from the pot till im next paid and then transfer it back.
Intrest charges would be applied when borrowing but only from what you use.
I understand some will say its the same as an overdraft but not all are eligable for overdrafts.
When i firsts thought of this it seemed a good idea now with others views i think maybe a not so much as it inevitability ends the same way.
A credit builder card would be better as one day id like a mortgage.
If you don’t have the credit record for an overdraft why would you qualify for this? Monzo do want to help people with low credit ratings but haven’t announced anything yet
In the past i couldn’t get an overdraft but i was accepted by Drafty for a credit line. Granted intrest rates are higher. But when your in a pickle and everyone says no what can you do?
100% agree. The last loan I took out was 59.9% over 3 years,whole pile of fun paying that back
I’m not a fan of drafty and credit lines, I think the entire intention is to trap you into a debt and repayment cycle. You could argue the same about overdrafts but that’s a longer debate
I know the feeling i was trapped with stupid amounts of loans which i ended up going into a DMP, I ended up clearing in 6 months approx 14k. But the effect it has on credit scores has effected me to no end. im debt free but its impossible to rebuild as no lender will touch you. Catch 22. Maybe the credit line is a bad idea but thought id see peoples thoughts on this.
It works post purchase for some folks I think, so you could pay the interest over a few months for unexpected bills/ smaller bills maybe to pick up a better credit rating?
May cost you a few quid but its nice to be able to build up the credit score again.
(Only issue may be that Monzo only report to one CRA so youre credit building wont be as useful possibly??)
A credit builder card would be good idea for Monzo customers, again eligibility is the grey area. The reason i first got a Mondo card was to get a hold on my finances.
When they became a bank the prepaid card became a bank.
I know there are builder cards out there that cost approx £10 pm.
Maybe a builder card would be better than a credit line
I Love the now Monzo account as it keeps things in check and shows spending.
Thankyou for your participation in this discussion its always good to see other peoples views.
I think the nice thing about this, is that if you do have any financial crisis, your money isn’t unreachable as they can return it to you. Obviously not ideal if you have to withdraw early, but is an option if really needed.
