Why we’re lending

What problems are we setting out to solve?

Applying for a loan

Applying for credit can be confusing and time-consuming

• The application process can be unnecessarily long and complex – whether you’re filling in a load of forms online or taking meetings at your local bank branch, applying usually takes a lot of time and effort

• How much interest you’ll pay and how much borrowing will cost you isn’t always clear – important details like the interest rate and cost are often hidden among heaps of other information, and it can be difficult to translate percentages into how much you’ll actually pay

• Some lenders advertise different rates to the one you’ll get – lenders often advertise interest rates, without making clear that only a percentage of people will qualify to get them

• Lenders’ checks can impact your credit report, with no guarantee you’ll get credit – depending on how lenders do credit checks, you can sometimes end up in situations where you haven’t been offered credit but your report’s been affected anyway

• It can take a while for lenders to decide – after you apply for credit, you might be asked to provide extra documents, or wait days for a decision

We want to bring transparency, clarity and certainty to the application process

• We want to make sure you can apply for credit quickly, through a process that’s simple and easy to understand

• We’ll make interest rates and costs transparent, and communicate in plain English so everything’s clear

• We’ll make decisions quickly, and instantly wherever we can

• We’ll make sure we know you’re eligible and you can afford the loan before giving you the option to borrow money from Monzo, without affecting your credit report

Managing your loan

It isn’t always easy to manage your loan once you’ve got it

• You don’t have much choice over how your loan repayments work, and you usually can’t manage this yourself – you often have to go with the option your lender gives you, and when you do want to make changes you’ll typically have to call up customer support

• You sometimes have to remember to make repayments manually – the onus is on you to remember when to repay

• You’re penalised for doing positive things without explanation – lenders often charge a flat fee for paying back what you’ve borrowed early, with no explanation why

Once you’ve borrowed money, we want to put you in control

• We want to let you control when, how often, and how much you’ll repay. For example, when you take out your loan we’ll let you choose the day of the month you’d like us to take your repayments

• To make it easy to keep track, we want to make sure you can always access and easily understand how much you have left to pay and how much it’s costing you

• Rather than asking you to remember to repay manually, we’ll take repayments automatically instead

• And to make sure you’re not caught out by the repayments we take, we want to send timely reminders so you can factor them into your budget and make sure you have enough money in your account

• If you miss a repayment, we’ll make it super clear how you can get back on track, and explain how this will affect the amount you need to pay

• We’ll help you make early repayments in app. And if we charge, we’ll make that clear and explain why

Supporting people in financial difficulty

Lenders are usually supportive when you have problems repaying, but not everyone knows that’s the case

• Banks can help, but not everyone knows – Some lenders do a great job of supporting people who can’t repay what they’ve borrowed. But this isn’t always made clear to customers so lots of people don’t know

• The way lenders communicate can seem scary – Once you’ve missed repayments, this fear or reluctance to reach out is made worse by the way many lenders actually contact you. The cycle of phone calls, texts and angry letters can be intimidating and stressful

• Processes get in the way of people – Sometimes rigid rules processes mean that the solutions lenders suggest aren’t always designed to meet customers’ needs

• The lack of digital channels makes communication harder – Communicating through letters and calls can be slow, and people often find it easier to address their debt if they can speak more anonymously

If you can’t repay what you’ve borrowed, we’ll do everything we can to support you, and make it easy for you to reach out

• Through our customer service and tools like Share with us, we want to make sure anyone who borrows money from Monzo feels comfortable enough to tell us when something’s wrong (whether that’s losing a job, struggling with mental health, or something totally different)

• When someone does get in touch, they should be able to expect an informed, compassionate response

• We’ll give you the option to take a break from repayments when it’s appropriate, and work with you to come up with a reasonable repayment plan

What we’re doing