Until a couple of days ago the maximum loan amount I was eligible for was 15,000 (5 years) but yesterday when I checked the maximum I’m now offered is 5,500
Nothing about my financial circumstances has changed - still in same job, not furloughed or anything, no spending (not left the house in two weeks!), can’t think of anything that could’ve so drastically affected my scoring.
Are Monzo scaling back loan offers? If not, something very odd has happened. Anyone seen similar and know any details?
Essentially, banks have to hold a percentage of collateral for any lending they do, to reduce the risk of customer defaults leading to bank collapse. During the banking crisis in 2008, the majority of banks reduced their customers’ unused overdraft facility as well, so they’d have more available funds to lend, and a bigger cushion to protect against what they saw as a likely surge in defaults.
I therefore don’t find Monzo’s move here surprising.
It does look alarming. However, for context, in 2008, my (admittedly unused) overdraft facility went from 10k to £1,500, so you’re doing pretty well in comparison!
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phildawson
(Sorry, I will have to escalate this.)
7
This isn’t a new issue at all. I’ve probably made close to 50 posts on various threads tracking how inconsistent it is.
Loans have been all over the place since day 1, it’s slightly improved but not by much.
I’ve had the same financial status, same report and score for years. A slightly decreasing mortgage debt and an increase in time at my address are the only changing factors.
Sometimes I get an offer, sometimes I dont, it even changes during the month even based off one report from the previous month, it’s basically based on which way the wind is blowing.
or maybe just how much Monzo feel comfortable lending from their limited pot , if you don’t take up the offer we will change it / reduce it / withdraw it and offer it to someone that does ??? maybe
https://www.bbc.co.uk/news/business-52132329 might have an impact, FCA is expecting 3 month freezes on loans a fee free overdraft up to £500 for 3 month, I would certainly be looking not to grant new credit just now
edoi it might be that Monzo already offer this on a case by case basis, but the fact that its in news and coming from the FCA will likey mean more ask for it and expect it
I’ve never been offered a loan by Monzo but up until recently, was preapproved for a 2.9% loan through Zopa. When I logged in today, despite my so called “borrowing power” remaining at 10/10 the rate offered is 7.9%.
Just thought I’d update this as the last couple of days have been ‘hilarious’
Two days ago I happened to check the loan section of the app (just because the app was updated and I wanted to see what had changed). Somehow my maximum loan amount had shot up to £13500!!
Logged in today to show my disbelieving wife and I get the message “Sorry we cannot offer you a loan.”
WTF?
Now the loan itself is not a real issue but I was planning later this year to close my ‘regular’ Natwest current account and start using Monzo as my main account. I could be overreacting but this kind of thing (the rollercoaster of loan offers) has me a bit twitchy. I know, Monzo are taking precautions in the current climate but
It’s transparent only so far as you can press a button at any time on the app and spin the wheels of the Loan Fruit Machine.
Like I said, the loan isn’t primarily the issue. It’s the fact that Monzo’s ability and/or willingness to offer financial products ebbs and flows in quite an alarming way. It was the fact that the offer skyrocketed to 13.5K and then completely disappeared in two days. Say I needed a loan and was trying to do some financial planning - “Well at least I can get a loan from Monzo if I nee-… oh hang on!”
Im really annoyed , I put in 100K into earnings , homeowner with no mortgage , and I didn’t get a loan offer ,my credit score is crap though because I dont use credit so have no history , I didnt need it anyway , but quite annoyed about it , maybe Monzo think I don’t need the loan … but it would have been nice to have the facility , just in case
I think it might be more the fact that the offers go up and down so rapidly which would indicate that Monzo has very little available funds to lend which causes the concern. I don’t think the concern is ‘I can’t get a loan’ per se.
You’re annoyed because you have a bad credit rating and this means you can’t get a loan you don’t need?
Monzo don’t care if you need the loan. All they care about is your ability to pay it back and in the current climate, so are reducing what they are willing to offer.
Maybe you should be happy that the CEO you’re related to is running a smart business.
Actually I did need one around the time I originally made this thread and sort of got shafted by Monzo as I was all ready to pull the trigger and they reduced my loan amount by 66% overnight making it no longer viable. I found cash through other means in the meantime and then magically my available Monzo loan goes up over 6K over what I originally wanted to borrow. None of my circumstances have changed (really, they haven’t). Then my loan viability goes crashing down to ‘you can’t have one at all’. It’s the schizophrenic nature of the whole thing that leaves me sort of not trusting Monzo (there’s probably a better phrase but it’ll do).
So, if that was aimed at me, and I’m sure it was, I wasn’t showing off at the amount they offered me and I wasn’t complaining that they won’t offer me a loan even though I don’t need one. I’m complaining that you literally don’t know where you stand from one day to the next and in these uncertain times it’s difficult to formulate financial mitigation (which is what we’ve had to do since my wife is a freelance worker) when the future with Monzo is about 48 hour before it could all change again.
