Loans

Id say aggressive selling of loans is a very ‘legacy bank’ way of doing things

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They’ve been using things like that for ages, it looks to be a home screen banner not an account tab banner.

A popup that shows once and is dismissable isn’t “aggressive” :roll_eyes:

There have been so many Mis-selling scandals that banks need to be so careful how they market loans or other products. If not, in 10 years time they’ll be refunding billions like the legacy banks have had to.

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no, but targeted advertising for high interest loans is, especially for a company that claims to help people manage money

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How dare Monzo promote a new service in a small scale test! :laughing: That loan might not be helpful to you but it may be to others :slight_smile:

Again. Using words like “aggressive” to describe a simple popup that could simply be moved somewhere else in the app is the reason companies are afraid to innovate these days. Someone somewhere over exaggerates or finds offence in the most simplest of things these days and it’s absurd.

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I meant that since pots in the new Account tab look similar to tranascations in the Home tab, the loan offer banners might also look similar in the future.

Aggressive selling is a pretty specific thing, singling out the word “aggressive” and claiming over reaction is distorting the context

Targeted advertising is aggressive selling, a loan may be helpful to others but encouraging people to take out high interest loans is aggressive selling no matter how you dress it up.

Again. The pop up isn’t what makes it aggressive selling, targeting people who might be susceptible to temptation is.

For products such as loans, passive advertising is responsible, a hard sell isn’t

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Targeted advertising is well placed advertising because you’re not shoving random things into peoples faces who have no intention of buying it. Monzo have explained their reasoning above and it is perfectly acceptable in those conditions. If I was struggling to hit my savings goal and there’s a chance I could save some money too I’d welcome an advert that could help me.

I also wouldn’t call 20% high either. Yes, it is above what some of the big banks charge but don’t forget Monzo are small fish so they need to iterate on this to be able to offer better and with that in mind it’s not a bad starting point. If you look around there are much higher APR loans and ones even ones that go into the thousands!

Ultimately, if this ever makes it live and you don’t like it. Simply close the popup and you’ll never see it again. It’s still better than being a permanent ad, an email or a spammy leaflet through your door :slight_smile:

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What are people using these 20% APR <£1000 loans for?

I’m inclined to agree that people shouldn’t be using these for holidays, and I’m pleased that the loans are no longer being targeted at this group.

I would’ve guessed that these loans would be for unexpected expenses, like car repairs/replacement, white goods etc?

Perhaps consolidating previous debts?

Which makes me wonder how to advertise these :thinking:

20% is not unusual for sub–£1000 loans, but they’re not particularly competitive.

People up the thread have mentioned around 2.8% but those rates only kick in for loans of £7,500+ over a number of years. They’re not comparing like with like.

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Zopa is probably one of the best in this area right? Usually about 12.5% for one year.

If you’re able I’d advise getting a 0% card instead of the loan.

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Starling’s loans are 11% for £500 and up.

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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.

Ah Starling wins the day then.

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!

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I do wonder who will use this feature, it feels a bit like a planned overdraft but more expensive?

I guess for the unexpected it’s good but surely using an overdraft for up to £0.5-1k would be more effective?

If you’ve used or in overdraft you wouldn’t have any other solution. I won’t be using it but glad they are moving into the space!

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.

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https://community.monzo.com/t/pushing-loans-on-notifications/62340

I thought I would shift this across, as I was a bit annoyed by getting a push for a loan in a payment notification

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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.

Just wow.

Tom. Tell me you didn’t sign this off?

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