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  • Credit
  • Innovation
  • United Kingdom

Starling Bank Introduces an Instant Credit Offer

The British neo-bank Starling Bank features a full-mobile instant credit offer. They rely on an increasingly transparent approach as their customers are provided a clear view of the amount they borrow and the term of their loan using Starling’s mobile app, which also connects with their overdraft service.

Starling Bank lets their customers apply for a loan from their mobile phone: an offer consistent with their existing mobile-only approach. They may subscribe unsecured loans instantly for amounts ranging from £500 to £5,000, over 12 to 60 months. They may choose the means and exact day for their repayments. No penalty fee applies for early repayments.

The application is instantly approved since the customer is actually granted pre-approval for a certain amount based on his financial behaviour: upon signing up with Starling, he agrees that the bank shall verify his credit history beforehand. Also, his loans and overdrafts are connected: anyone approved for a Starling overdraft can then apply for a loan. The approved loan includes the amount of his agreed upon overdraft.

Using the mobile app, customers can transparently view how his loan and overdraft are distributed, their monthly repayments and the overall amount to be repaid by the end of their agreed upon lending contract. They are then provided greater flexibility and better control over their budget.

Comments – Starling Bank accommodating “Banking as a Service”

From the start, Starling has been designed, from start, to integrate the Open-Banking ecosystem through, for instance, making their APIs available to third parties and creating a marketplace. With their mobile-only personal lending offer, they take an additional step towards building this concept, since third-party companies are also able to rely on it to propose personal loans to their customers: Starling’s licence and technology are available via their BaaS offer.

Their new service also helps them gain grounds on the fast-expanding UK FinTech market, especially when it comes to accommodating credit offers. Rival companies include Klarna and Revolut.

Just as well, they are triggering a one-of-a-kind mechanism as they set a link between the customer’s overdraft and personal loan. This might help this service become popular among customers: the associated conditions are more appealing with credit offers than with overdrafts. And again, Starling keep praising transparency, ensuring that their customers are satisfied. Among other British neo-banks, Monzo also opted for a relatively similar approach to dealing with overdraft issues in a transparent way.