Misleading loan amount left to pay

UK Feedback & Ideas
1

Monzo personal loans accrue interest daily and allow extra repayments and full early repayment without penalty. I have confirmed with the AI assistant that this does reduce the total amount of interest to pay on the loan.

However, when you look at your loan within the app, it shows the amount left to pay as the loan amount plus the total indicative amount of interest that would be paid if you stick to the payment schedule. It should instead show the current loan balance (i.e. settlement amount).

It’s very misleading to show the amount left to pay including interest that is not yet accrued. I strongly suggest that instead it should just show the current loan balance.

When I first saw this in my app I thought the loan had been mis-sold to me and I almost cancelled it!

2

It’s not misleading, it would be misleading to show you a lower figure than you’d pay if you let it run, as that’s what most people do.

You have it the wrong way around.

2 Likes
3

Ok. I completely disagree. They can still show that amount somewhere, but it shouldn’t be the top level number. If I pay everything now, that isn’t the amount I have to pay.

4

The balance shown will be driven by requirements under the Consumer Credit Act, they have to follow this or the debt (or at least the interest) could become unenforceable.

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5

So you think the app should say..

“You borrowed £5,000 - You owe £5,009”

So what happens when you check tomorrow and it says ÂŁ5011?

It shows the total/most amount you’ll have to pay, as it has to by law. If you pay it early, you get a settlement figure. This is how the entire finance industry works.

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6

Loans need to be displayed as the agreed total amount (principle plus interest) at the time of your agreement.

You won’t find it any different anywhere else because it’s a regulated industry.

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7

It would cause huge uproar if it was the other way round :grimacing:

You said I only owe £4,500, I’ve paid that, and you’re now asking for more money!

Seeing the full amount of what you owe, balance + interest, regardless of law, is absolutely the best and clearest approach.

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8

To be clear to everyone, my concern is that it looks like my current balance, but it isn’t. My partner and I both work in lending, so I know the regulation. I also have had other loans and mortgages with major banks and they don’t do this.

If I were to pay off now, it wouldn’t show more to pay tomorrow because no more interest would accrue.

Anyway, I left feedback here for the product team at monzo. Won’t be debating further!

1 Like
9

The topic you’ve created allows people to vote on the idea so show Monzo how much interest there is in the suggestion. It’s a community, so we discuss things, share opinions, give feedback and so on.

If you dont want to engage that’s fine, but you’re not going to help your cause by doing so.

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10

I disagree, most banks only give settlement figures on request.

Your view can make sense, but people would then wonder why the amount is showing higher a few days later and it’ll cause many complaints.

The alternative is to have both interest amounts showing.

Loan + interest for the full terms

Loan + interest if repaid today

But again, most lenders don’t do this automatically and can charge up to X days interest for setting early.

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11

Do you really? Or are you just saying that because you think it makes your opinion sound better?

If that’s really your job, I wouldn’t have expected this topic in the first place.

5 Likes
12

Simply click “Pay Extra” when in the loan and the “Pay in Full Amount” gives exactly what you are looking for.

13

Which banks? My first direct loan worked the same as this when I had one.

2 Likes
14

And given that the OP hasn’t voted
.

2 Likes