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?

1 Like

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.

Do you know if this has any sort of negative effect on your credit record? It seems like a no-brainer to me, to switch my NatWest loan over to Monzo but borrow 7k to do it and immediately pay back 3.5k to take advantage of the lower interest rate.

Possibly worth adding that I’ll hopefully be applying for a mortgage in the next couple of years.

1 Like

It’ll have an effect for sure but it’s hard to say whether it’ll be good or bad.

Things that’ll be obvious from your credit file:

  • you’ve taken more unsecured lending (bad)
  • you’ve fully paid off an unsecured loan (good)
  • your balance on a loan (the Monzo one) has dropped considerably (good)
  • the average age of your accounts has dropped (bad)
  • a new hard search (bad for 6 months)

So where you stand afterwards is anyone’s guess. If lenders can see the interest rate of a loan, that’d likely be another positive because your loan will have a lower rate that’ll indicate another lender (Monzo) thought you were lower risk, but who knows? :man_shrugging:t2:

Each lender like your future mortgage lender will have their own assessments and risk profile anyway so they might care about parts of the above and maybe not care about others. It’s really hard to know for sure.


Same for me too!

Is there a way to increase the monthly payments?


No, but you can put additional money aside to pay it off early in full, or virtually pay more by making extra payments

1 Like

Same issue here — haven’t made an application but the facility has disappeared. I’ve raised it in Monzo chat, yet to hear back.

I think it is a bug, though — it’s still offering spread the cost but saying I’m eligible for £0 :thinking:


Thanks Dan - really appreciate the info and advice.

Can anyone who has taken out a Monzo loan confirm how overpayments work? If I borrowed 7k, paid back 3.5k almost immediately then is the term reduced or the monthly repayments? I’ve asked on Monzo chat but not yet had a response.


I would like the choice if I made a significant repayment (reduce term/reduce amount) but retain the same interest rate.

Why would your interest change? You’ve made a contractual agreement on the interest on the amount borrowed?

1 Like

It meant to say interest rate. :+1:t2:

That’s what I thought it meant, you wouldn’t have your interest rate change because you’ve paid back “more” than your CMP?

You will pay less interest as they charge interest from remaining amount

How do loans show in the app? Do they show as a pot?
Has any screenshots (with balance covered)

You’re still going to have the same interest rate though? Your CMP would likely only change if there was a recalculation.

You technically pay less interest the minute you make your first payment because that’s how percentages work, but your percentage (i.e. interest rate) will remain the same throughout the lifetime of the loan because that is what has been contractually agreed between the parties.


I took one out the other month and impressed how it works. It shows as another pot. Any additional payments you make reduce the future payment amounts and the interest is calculated on what’s remaining so the quicker you pay it off the less overall interest you pay. Payment period remains the same unless you pay off the full balance.


Sounds like you can game the system a bit. Smaller loans have higher interest rates, but you could easily just take out a large loan and pay most of it off right away. :ok_hand: