Woo! So I’ve been invited to the loans.
For reference since the overdraft topic comes up - I’ve been approved for an overdraft of £1000 (not sure I can go higher?)
I get a notification in the feed “You can now get a loan from Monzo, head to the account tab for more info”.
On the account tab, it’s not overly obvious at first glance what I’m supposed to do:
With phone in hand, the intuitive behaviour is to Swipe Right through the pots, couldn’t see anything there. Thought there might be a “Loan” button but turns out I needed to swipe left to the lowish contrast thin yellow outlined box.
(Phone not at 100% brightness, this is hard to see, especially if you have any form of “night colour mode” on your phone! FYI).
I guess it’s not often you’ll apply for a loan - but the expected behaviour of where to find it could be more clear, I believe.
In the loan box itself, I’m eligible for a £1000 loan, up to 12 months. At the maximum value of £1000, I’m offered an interest rate of 20.4% APR.
Click the “I’m interested” box, and I get a summary of T’s and C’s - 14 days to cancel, impact if I have an overdraft, missed payments - interest is charged on missed payments, and they may take legal action - but no clarity if there’s a missed payment fee?
Next page gives you a Credit Agreement page, with full breakdown of Stuff - which explains no late payment fees - but does say “our rights if you miss a payment or we have other concerns” and outlines how they charge interest, and can recover the loan etc etc, plus other legal stuff.
Overall, it’s quite a pricey loan (for me at least). The £200 minimum would come with 18% interest. Quite high compared to the market in general, but I’m not sure if that’s the same APR that other people are seeing?
EDIT to add:
- It seems the market place, in general, is offering 1 year loans of £1000 for between 7% - 10%, so perhaps it’s better used for shorter term things
- Even so you are likely to get better 0% purchase deals on credit cards than this may offer - and given some feedback on the Overdraft, it seems like people who are unlikely to hit eligibility criteria for those offers, would be unlikely to hit them for the Monzo Loan product too (I suspect).
Overall - I’m not certain what space it would fill in my own finances.