Why we’re lending


(Beatrice Borbon) #1

Here’s an update on how we’re approaching Loans and lending at Monzo!


Monzo Loans announcement?
((╯°□°)╯︵ ┻━┻) #2

Someone beat you to it @bea :wink:


(Micky) #4

Whats a “normal overdraft limit”?


(Micky) #6

:smile: It wouldn’t let you select more than that?


(connorianreilly) #8

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. :wave:


#9

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.


(Tony Hoyle) #12

I got 150 overdraft… smallest I’ve had since I was 16 :stuck_out_tongue:

I always thought it was because they don’t want you to use them so they make them too small to be useful.


(Richard Bartlett) #13

What exactly is a rerepayment?? (See designs)


#14

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.


#15

But what is the point ? Offer overdraft and loan to people who will never use it?! As they have perfect credit rating and money?


#16

Looking forward to seeing my notification! haha


(Tom) #17

Surely banks would love for people to be in their overdraft all the time, so they can charge all that lovely interest?


(Andre Borie) #18

Monzo wants to be different though.


(Johnny Ellwood) #19

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.


#20

Monzo won’t survive without covering costs though, things like loans and overdraft charging is just how banks make money.

Why attempt to justify that they “want to be different”? In the end they want a viable business that will come at some cost to the customer, in some cases costing more than my legacy bank. There’s nothing wrong with this, its just their choice of business model.

@bea can you specify how the loans from Monzo will be reported to the CRA’s? Short-term loans such as payday loans etc that are reported can end up reducing your creditworthiness and thus negatively impact you.


#21

I prefer to be in overdraft and pay fees.
I want to decide not someone for me


#22

They’re not holding as much money as the traditional banks at the moment, so they’re probably being more reserved as a business decision. It’s all well and good loaning money out, but when you’ve only got a finite amount and you have the potential to loan more than you have, it doesn’t work!


#23

I would put it on the credit card regardless, if the course last minute cancels under the consumer credit act any purchase between 100£-
30.000£ is covered if the place fails to deliver etc. I know its unlikely but, peace of mind is nice.


#24

So the question is…
If they have no money for overdrafts why they introduced loans…


#25

They will be controlling strictly who they give the loans to also, as I mentioned they’ve just not got the massive amount of deposited cash to be able to offer everyone an overdraft.