This refers to the new ‘loans’ product. If you take out a loan then you will be charged interest regardless of your overall balance. Overdrafts continue to be offset by any money held in ‘Goals’.
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No it’s not correct 
The loan is an option for people, and whilst it’s linked to the overdraft (and the potential overall borrowing is linked), it’s still a different product.
So if you aren’t using a loan, it’s business as usual.
If you take out a loan, you’ll be charged interest - Even if you have £100,000 in goals (which is fair enough).
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Cool. I get that it’s a different product. Practically speaking though, they are both borrowed money, just that people view overdrafts and loans in a different light (and I guess you commit to a specific re-payment plan in advance?)
When you dip into your overdraft to re-pay the loan though… that’s where it gets confusing 
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So this is correct -
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Which begs a question I hadn’t even considered. If you do have say £10,000 in your Goals, and and overdraft of £5000, will they let you know a loan is a terrible idea as you’d never be charged interest on your overdraft?
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There is a nuance, though, where Starling’s loans are only authorised up to your overdraft limit, though? So if you have a £1000 overdraft, some of this can be a proper overdraft (including offsetting overdraft interest with savings in goals/spaces) and some of it can be a loan (where there’s no offsetting). And you can’t get a loan that’s in excess of 90pc (?) of your overdraft limit?
It’s confusing.
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I am thoroughly confused lol.
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Yeah, absolutely this.
People’s complaints about the way Monzo did it was that it didn’t take “Pots” into account.
It always seemed strange that people would have money in Pots, but still go into their OD anyway - But that’s an entirely different conversation about how people view/use OD’s.
A loan is a loan - Whether you have £10,000 or nothing - You’ll end up paying interest.
But it’s a pre determined plan (or it should be lol) - Whereas the OD can be used in emergencies.
Edit - The confusion comes from people writing comments, which are then taken out of context and not fully explained.
It’s a pretty simple “loan” proposition (although Starling are working on the communication around it!).
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So this is correct -
This, it is basically an overdraft with an agreed payment plan over a fixed term. In return you can get a 4% better interest rate, if you have great credit. The rate could also be the same or higher, in which case you’d be worse off.
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But they’ve ‘linked’ it to the overdraft, so essentially they’re conflating to two. It makes more sense to view it as converting a portion of your overdraft to a fixed-term loan you can repay early.
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Yeah - The wording was a little confusing, and the way they’ve linked it needs clearing up.
It’s not perfect by any means - But it’s only just rolled out, so I’m sure they’ll clear it up as time goes on.
The point remains though, if you have money in Goals greater than your potential overdraft, the loans product will never be beneficial to you.
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Yes - 100%.
I don’t know how long you’ve followed Monzo for, but the reason for the chatter about “can be charged interest even if you have money put away”, is down to how Monzo deal with Pots (which I personally find fine!).
People complained that if you had £5,000 in your Monzo Pots, but went into your overdraft, you’d still be charged 50p per day (basically, Monzo don’t look at your pots balance when calculating OD fees).
I think the comparison was trying to be made over on the Starling forum that it was a similar thing.
Apologies if you already knew all that!
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This goes some way to explaining why Monzo wanted to keep it simple (it was never about additional revenue generation)…
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It’s a financial product of up to £5000 which has the risk of causing financial problems if they do not fully understand it when they take it out. The it’s only new excuse doesn’t hold water here, this is something that needs to be perfect when it’s released
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I wasn’t aware of this, but I figured as much. It’s nice that Starling use deposits in Goals to offset any overdraft and I’d like to see that expanded, but I figured Monzo worked like any other bank. As it is neither overdraft interests me, especially not at 50p a day, but the £20 buffer is welcome.
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OK.
So let’s say I have a £0 balance right now. I’ve got £500 in a goal that I don’t want to touch. But I also need to spend £500 on something urgent and I don’t exactly know how or when I can pay that back without removing money from the goal. Might be a month, might be more.
Do I take a £500 loan or do I go into my overdraft by £500? What’s the best option for me?
I’m not sure any feature from any fintech I’ve looked at has had a perfect feature upon release.
What’s not correct here sorry - was this a lie?