Just had an ad come up for them, interesting idea and financially good for alot or people
Free upto £100 overdraft per month & £2 per month for a 1k overdraft.
As they access your bank account , I assume they would have a limited amount of banks similar to Emma and Yolt.
What are your thoughts?
What’s the catch?
I imagine they gain by analysing your spending habits.
But it also says they plan on opening some sort of marketplace to make money.
Interesting proposition for sure! I’ve signed up - hope to hear more soon.
So looking at this, it says offer you up to £1000, for £2 per month.
If they offer most £200 as a starting amount for credit limit for example, and the monthly fee was hypercritically interest - it would be 10% APR, if it was £1000 limit it would be 4% APR. That is without actually even borrowing the money.
Or if you didn’t borrow any money all year, then borrowed £200 for a month at the end it would be like a payday lender rate? 140% (£200 borrow, for £24 fee over the year?)
It then also says If the money hasn’t been paid back after 3 months, “we have to convert the amount into a loan with an annual interest rate of 10%.”
This seems to be a bit of a trend at the moment, to put a monthly fee instead of interest, I guess to them, they get guaranteed income each month.
Correct me if my if my logic is way of there, but thats how it comes across to me.
Chip are planning on doing something interesting in this area.
Like Snowdrop, Chip will inject money into the users bank account to prevent going into overdraft and will charge a lower fee than the bank. But there is a peer-to-peer lending aspect to this, with the money coming from Chip savers who opt in to this community lending. The lenders will get a higher interest rate (but also take on default risk) https://www.getchip-community.uk/xplainer-3