Here’s an update on how we’re approaching Loans and lending at Monzo!
Someone beat you to it @bea 
1 Like
Whats a “normal overdraft limit”?
It wouldn’t let you select more than that?
I’ve always wondered when/how they will review the limits too! Especially now Monzo have salary, committed, (potentially savings) information now…
A bigger overdraft cushion and I can wave goodbye to HSBC. 
3 Likes
They’re just being extremely conservative at the moment with overdrafts. I imagine limits will increase and people not currently offered an overdraft may get one in the near future.
2 Likes
I got 150 overdraft… smallest I’ve had since I was 16 
I always thought it was because they don’t want you to use them so they make them too small to be useful.
1 Like
What exactly is a rerepayment?? (See designs)
I’ve always thought of overdraft as emergency cash and I’ve only ever used it once in my life. If I was having to use it every month I’d probably consider scaling back on things I could do without. But, then again, I appreciate some people are perfectly capable of using it all the time for various reasons and can pay it back.
3 Likes
But what is the point ? Offer overdraft and loan to people who will never use it?! As they have perfect credit rating and money?
Looking forward to seeing my notification! haha
Surely banks would love for people to be in their overdraft all the time, so they can charge all that lovely interest?
1 Like
Monzo wants to be different though.
1 Like
Is there a way to ask to be invited to test this?
I was looking to book a course the next few days and was going to put it on my credit card but if I can help test this instead i’d prefer that.
1 Like
I prefer to be in overdraft and pay fees.
I want to decide not someone for me
1 Like
So the question is…
If they have no money for overdrafts why they introduced loans…
Let’s find out what sort of overdrafts are being offered!
- I have been offered an overdraft of less than £100
- I have been offered an overdraft of £100-£500
- I have been offered an overdraft of £500-£1000
- I have been offered an overdraft of more than £1000
0 voters
And Monzo have told you the most they’re prepared to lend you based on their criteria and your circumstances. I’m sure in the future as the model matures they might well increase that.
This is one of the short-comings of a fixed 50p/day interest model, the incentives push everyone who is using their overdraft to borrow the most available and the incentives push Monzo to keep everyone in a very small overdraft.
1 Like
Good point! Too late for me to change it 
Would be great to get an explanation of why you have been offered a particular rate for a loan, I found it infuriating search on money supermarket or the meerkat one for a car loan. It kept listing banks offering 3% but when you start the application it would go up to 7%. It would be great if Monzo had an open and transparent system explaining how they work out what rate they offer different people.
I don’t know how banks work it out but in my head I’ve assumed it’s linked to your credit score. So it would be great if banks just said so and told you what rates they offered for the different credit score bands. I’d imagine all it would take is something like the below:
Loan interest rates based in experian credit score:
Very poor: 0-560 = loan not available
Poor: 561-720 = 8%
Fair: 721-880 = 6%
Good: 881-960 = 4.5%
Excellent: 961-999 = 3%
They could tell you your score and even offer advice on how to improve it.
If there are further things they check then these should also be explained.
4 Likes