Loans

Was showing 3.2% for me from around 8.5-15k. Defo better than what HSBC gave me, hence I ported mine to Monzo … love the flexibility and repayment options I have to say.

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Are they? I haven’t seen any evidence of this, can you link to whatever it is I’ve missed?

It might do with some people. With others it won’t.

Please bear in mind you’ll only receive this offer if your credit score is sufficient. i.e, you don’t already have too much credit, your credit affordability is good etc. Monzo is very risk averse with their lending so this won’t be advertised with people that have a poor credit history.

Regardless. That wasn’t the point I was making. I was solely refuting your point that Monzo’s purpose was just for saving. It is not.

This is false. Credit is an excellent tool for anybody that can sensibly afford it. I’d love if you could provide me with any evidence or sources to back up your claim here.

All financial services companies sell financial services to make money. I’m not sure I’ve ever known a non-profit financial services company.

These loans can be as short as 3 months. 20.4% isn’t the cheapest for a short term loan and also not the worst - please lets keep this in perspective. Lending £1000 for 3 months will cost £34.19 in interest. Which is still cheaper than many overdrafts, including their own.

Monzo is sometimes* very expensive with borrowing. Their longer term loans such as their 60 month loans are extremely competitive. Also, I’m not sure how fast people will lose their savings on Monzo’s overdraft. Being overdrawn by more than £20 every single day of the year will cost £182.5. So “a few days time” like you say, is a bit unrealistic, unless were talking savings of £5 or so.

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Agree. For higher amounts Monzo’s offers are very competitive.


Barclaycard balance transfer offer for example… for £19 I can repay £1000 till Jan 2021 so I will never use Monzo for this type of loan.

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It’s great you have a low cost option, a lot of people don’t

Nationwide select credit card transfer offer for everyone…


I don’t think… who will sign for 20.4% loan will be able repay it for 3 months. Minimum 6 months…

Everyone? So they don’t do any checks and accept everyone for the card?

I think you misunderstand spread the cost. You buy and pay for the item first. Handy if you need to buy something expensive (like the washing machine breaks) but that’ll stretch you a bit thin for a while. Spread it over 3 months and it lessens the impact

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It’s worth bearing in mind that the use cases for a credit card balance transfer are very different to a loan.

In the “spread the cost” instance, you free up real cash. Cash you can withdraw at an ATM, cash you can transfer to friends, cash you can use to pay direct debits/bill.

A balance transfer is moving debt from one credit card to another and doesn’t give the same relief as a loan.

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That’s a fair point I didn’t know that. So I’ll concede that. :raised_hands:

My claim is based off the original wording: Stretched your budget? Spread the cost. My rebuttal would why not have a warning that is: Stretched your budget why not cut out (x). I would argue that the original sentence is there in order to encourage people. Not to stop them and make them think maybe I shouldn’t spend so much money this month.

This isn’t a credit card, its a loan and they’re very different financial products

All I’d say on that point is that the credit card in your pocket offers you credit regardless of how much money you have in the bank at the time, this offer only extends to cover items that you’ve already demonstrated an ability to be able to pay for by lending to you after the payment has been made.

The circumstances are subtly different between the two.

Not saying that I’d personally use either, of course, but there’s always the chance of getting caught by something sooner or later. When the car was written of it was touch and go for a few months so if something else big had happened…

(As things stand I’m not eligible for a Monzo loan anyway so I’d have to look elsewhere. I’d have thought I was a good risk, personally :man_shrugging: )

I’d like to know why I’m not eligible for a loan (I don’t need one), I was 1 week ago, without a HS monzo has decided that I cannot get one.

I understand it now!
But what about extra payments or early repayment fees?
I had a loan with Nationwide and they allowed extra payments and early settlement without any fees. So you can borrow >£5000 to get lower APR and next day repay £4000 for example if you need £1000 only…

There are no early repayment charges or extra fees

I’m not sure I’ve seen anyone make extra payments but I know some who paid it off in full

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Yep! You can make extra payments too. You can choose an arbitrary repayment amount or an early scheduled payment :tada:. (I’ve tested this, the flow is really good, it shows all of the interest saved on each subsequent month).

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If you take a loan, can you make extra payments any time you want in a month? And as many as you like?
Does it reduces the monthly payments or the term?

Yes, any time in the month and as many as you like. You could have the loan for 1 day if you like.

It depends how you repay. If you choose to make “an monthly prepayment early” it technically neither reduces the monthly payments or the length which I found very strange. It makes your next payment effectively paid. Your monthly payments only go down in interest saved. Example:

Loan taken out today with 1 year term. First payment on 1st August 2019, last payment 1st August 2020.
If you made an early monthly repayment, you’d have paid August 1st 2019 off. Not the last month. So you’re left with the same term length and therefore more interest.

It’d be nice if it gave you the option of either repaying the next or last payment or whether to reduce monthly payments, but sadly it doesn’t yet.

There is another repayment option to put an arbitrary amount toward it, but I haven’t tried that so I don’t know how it behaves.

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Thanks for replies guys! It makes loan more attractive :+1:t2:

if i needed a 5k loan would i not be better taking 7k for the lower interest rate than pay back 2k thats not needed?

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I held a £1,000 Monzo loan since February and I decided to repay the final balance of my loan (£500) last week as I had the cash. Whilst I could have instantly got another loan, a couple of days later, I seem to have been removed from this luxury and I now only have the placeholder “We’re offering loans gradually”. I am no longer special :upside_down_face: :cry: :sweat_smile: .

Yes, as you can always overpay whenever by whatever amount.