Many banks probably targets needs for smaller loans with credit cards. My Halifax card has a seemingly permanent 4.9% money transfer offer.
Monzo probably can’t (and I don’t think they should either) jump on the whole 0% bonanza, but hopefully they can offer a slightly more competitive rate down the line.
Well, I remember bring very critical of Starling when they launched the loans feature, both in terms of how they were advertised and the rate. They still aren’t the most competitive but Monzo’s recent trial makes them look great value!
Coming late to this but I basically see this type of lending being relevant to the less well off and those who dont have good credit. I see it a bit like microfinancing in the developing world in that respect where access to borrowing can change lives. The same can be said in the western context: if your boiler or car suddenly breaks and you cant get credit anywhere else a product like this could be a life saver. The APR looks a bit high but if the alternatives are likely to be Wonga or loan sharks then it is a great option for Monzo to develop and quite competitive.
On the other hand, if it’s designed to be a main stream product to compete with credit cards I cant see it taking off without an initial 0% period or a much lower rate.
The loan to save thing is gob-smacking, cringe-worthy and a flagrant dereliction of duty. I’m flabbergasted, appalled and fearful for my investment.
Maybe the papers were right. Maybe Monzo did seruptiously promote the use of the overdraft facility to buy shares. This is no different, except it’s even more blatant.
On what planet is it acceptable to offer to lend someone money on the pretence it will help them save? The press will destroy them overnight if this ever makes it prime time.
Sorry, but I do know what happened. The article in question actually admitted that the basis of the article was a line in the investment prospectus stating that customers would need to have any funds they wish to invest in their account, including their overdraft. Based on that, the headline was over-the-top.
Over the top, for sure. Technically correct, certainly. Intended, most likely not.
Monzo mentioning that overdraft funds could be used to buy shares was a careless blunder that was always going to get pounced on. Whether it’s right or wrong is a difference of opinion. It made people think, and this is only a good thing.
Sadly, I see a clear case of history repeating itself here, but I am relieved it’s been removed.
My screen has just updated today with ‘Learn about loans and overdrafts’ option with the offer for loans. (Im assuming that bit as i’m not eligible) Looks like they are rolling this out as we speak.
I would like to see some kind credit building help, like me many years ago was stupid with money and have learnt from my mistakes. Now totally debt free but struggling to rebuild my credit.