Chime neobank offers instant loans
Mobile bank Chemen, an American financial technology company based in San Francisco and founded in 2013, has just presented a new offer in the form of instant loans. Simply called Instant Loans, these loans are presented as new levers to help bank customers deal with urgent financial situations.
FACTS
- Instant Loans is presented by Chime as a loan offer able to provide some of its customers with quick access to emergency funds with transparent and affordable conditions.
- Only some of its clients, since the offer is only available to those who have received pre-approval to access the service.
- Instant Loans allows them to unlock up to $500 instantly returned to their current account. These funds will then have to be repaid over three months. Chime states that no additional costs, such as delays in reimbursement, will be applied. The neobank has a fixed fee of $5 per $100 borrowed. For $100 borrowed, Chime customers will have to repay $35 per month for the next three months.
- Monthly repayments should not exceed 10% of the total cash inflows recorded monthly in the borrowers' Chime accounts.
ISSUES
- Enrich its offer To date, Chime customers had access to current accounts, savings accounts, Visa debit cards and peer-to-peer payment services via a mobile app. They could also, since 2020, use a Visa credit card, Chime's first alternative credit offer to help its customers increase their credit score. In addition to an authorized overdraft solution in 2024, Chime also presented MyPay, a salary advance offer.
- A new alternative on the market Chime puts forward a product that defends a great transparency, in its operation, its granting and its repayment conditions. The neo-bank states that repayments of these loans will be reported to rating agencies to help borrowers improve their credit score.
PERSPECTIVE
- Chime presents its new offer as a responsible emergency borrowing solution, and as a secure alternative to other popular solutions as proposed by BNPL players.
However, they are criticized for their sometimes controversial business practices. Jrecently, BNPL services were largely outside the scope of regulation. However, given their growing popularity and potential debt risks, the regulatory institutions are today considering the question of their supervision throughout the world (the CFPB in the United States, Finansinspektionen Sweden, United Kingdom Treasury United Kingdom).
In Europe, the European Commission has proposed a revision of the Consumer Credit Directive (DCC2). EU Member States have until November 2025 to transpose these new rules into their national legislation. In France, the Supervisory and Resolution Authority (ACPR) is already supervising BNPL practices, requiring in-depth solvency assessments to prevent over-indebtedness.
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